What’s the Right Investment Strategy for 2026?
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
Scott Galloway and Ed Elson synthesize diverse expert perspectives on what 2025 holds for investors and explore strategies for navigating market uncertainties. The hosts analyze the ongoing battle for Warner Bros. Discovery, examining how testosterone-driven bidding wars between Paramount and Netflix may create shareholder value destruction. (05:00)
- Main themes include investment strategy formulation amid market volatility, the AI bubble debate, and corporate acquisition dynamics in streaming media
Speakers
Scott Galloway
Professor of Marketing at NYU Stern School of Business and serial entrepreneur who has founded multiple companies including L2 and Section. He is a bestselling author and sought-after speaker on business strategy, technology, and market dynamics, known for his contrarian takes on major corporations and economic trends.
Ed Elson
Co-host of Prof G Markets and business analyst who contributes research and market commentary. He works closely with Scott Galloway to analyze financial markets, corporate strategies, and investment opportunities for the show's audience of professionals and investors.
Key Takeaways
Diversification is Critical Due to Big Tech Concentration
The top 10 stocks in the S&P 500 now make up 40% of the entire index, with companies like Microsoft, Apple, Amazon, Google, and Nvidia contributing to half of all market returns since 2023. (39:42) This concentration means most investors are dangerously overexposed to big tech without realizing it. Ed recommends buying equal-weight S&P 500 funds, diversifying into underperforming sectors like consumer staples and healthcare, and considering emerging markets exposure. This rebalancing becomes essential when a handful of companies drive the majority of market performance.
Invest in Yourself When Market Returns Look Uncertain
When facing uncertain market conditions and expensive valuations, the best investment might be yourself. (43:38) This could include coursework, certifications, education, health improvements, or even starting/expanding businesses you control. Scott exemplifies this by investing heavily in his own companies Section and Professor G, where he has influence and control over outcomes. Rather than trying to time markets or chase collectibles, directing capital toward skill development and self-improvement provides more predictable returns.
Emotional Decision-Making Destroys Wealth
Scott reveals he sold all his stocks when Trump was elected in 2016, incurring huge tax liabilities and buying back at higher prices six months later, likely destroying 10% of his net worth. (26:45) He emphasizes never being able to successfully time markets despite decades of investing experience. The key lesson is maintaining market exposure while adjusting leverage and diversification rather than making wholesale emotional moves. Successful investing requires removing personal biases and political views from financial decisions.
Stay Always Invested But Manage Risk Through Diversification
Scott cites Tony Robbins' analysis showing that bull markets typically have 12 days of enormous upside, and missing any of those days causes underperformance. (31:35) The only way to capture these days is to always be in the market. However, this doesn't mean being reckless - Scott manages risk by paying down debt, diversifying across asset classes (real estate, private companies, art), and avoiding concentration risk. The strategy is staying invested while building multiple wealth baskets so if markets crash, you're down 30% rather than 120%.
Testosterone-Driven Acquisitions Destroy Shareholder Value
The Warner Bros. Discovery bidding war exemplifies how male executives turn acquisitions into personal competitions rather than financial decisions. (55:54) Scott points out that all bidders likely had maximum numbers they told bankers 90 days ago, but have blown past those limits due to competitive dynamics. When Ruth Porat became Google's CFO, she imposed financial discipline and stopped wasteful spending on pet projects, likely the most value-creating move at Google in a decade. The lesson is that acquisitions driven by ego rather than economic logic typically fail to create shareholder value.
Statistics & Facts
- The average credit score decreases by 12 points after a state legalizes online sports gambling, illustrating unexpected consequences of policy changes on personal finance. (02:34)
- AI capital expenditures reached $350 billion in 2025, up from $200 billion in 2024, with major tech companies raising over $100 billion in debt - more than three times the average of the previous nine years. (12:18)
- The top 10 stocks in the S&P 500 now represent 40% of the entire index and have delivered 65% of total returns since 2023, creating dangerous concentration risk for most investors. (39:01)
