Scott Galloway, the entrepreneur and NYU Stern marketing professor, issued a stark warning about the economy over the weekend on his Prof G Markets podcast, co-hosted with Ed Elson. But one of his colleagues, NYU Finance Professor Aswath Damodaran, offered up an even bleaker view. The market isn’t pricing in something “potentially catastrophic,” Damadoran said, so taking your money out of stocks and moving it into baseball cards isn’t a crazy idea.
Top financial commentator Robert Armstrong, of the Financial Times‘ Unhedged blog, took notice (Armstrong famously coined the term “TACO” trade, for “Trump always chickens out”). Damadoran is unusual, Armstrong wrote, because he’s not a perma bear like, say, Michael Burry of “The Big Short” fame, who has warned of a bubble and cryptically closed his hedge fund. Damadoran is “a true enthusiast” who “likes investing, believes in markets, and has a strong risk appetite.”
Armstrong argued the view is worth considering, even if you believe, as Armstrong does, that a growing U.S. economy and strong cash flow and less-wild valuations elsewhere in the Magnificent 7 aren’t at bubble levels. He said he can only offer “a mild level of disagreement” with Damadoran’s statement that there’s “nowhere to hide in stocks” amid the AI boom/bubble situation. Galloway has been saying there’s nowhere to hide somewhat often recently, as he and Elson found Sam Altman’s recent statements to be an “emperor has no clothes” kind of moment.
