Why International Stocks Are Beating the S&P + How Scott Invests his Money

Key takeaways

International markets are currently outperforming the US, and diversifying globally can be advantageous.
Scott invests in a mix of public stocks, private deals with strategic benefits, and real estate, prioritizing stability and long-term growth.
Teachers are underpaid relative to the importance of their work, and technology like AI can support educational equity, especially for underfunded schools.
US stock market concentration is high among the top 10 stocks, which poses risks; diversification and cautious investment are recommended.
Policy reforms and targeted support are needed to address educational inequalities and improve outcomes for low-income students.

Summary

The Resilience of International Markets and Investment Strategies

Scott discusses his prediction from the previous year that emerging and international markets would outperform the US stock market, a contrarian view at the time. He highlights data showing strong year-to-date gains in developed and emerging markets, with international stocks beating US stocks despite geopolitical shocks like the Iran situation. Scott emphasizes that the US dollar has weakened due to fiscal concerns and eroding confidence, making international investments more attractive. He argues that many US-focused investors are overly concentrated in the top US stocks, which are now expensive, and advocates for diversified global allocations. He also notes that while international markets currently offer great value, they come with risks, especially if the US dollar slides further.

Scott Galloway's Personal Investment Approach

Scott shares insights into how he invests his money, focusing on public stocks, private deals where he has an edge, and real estate. He prefers straightforward, long-term investments like Apple and Amazon, but also seeks private opportunities with strategic benefits, such as board participation or favorable terms. He discusses his approach to diversifying investments to avoid risks, especially in angel investing, which he views as low probability but high engagement. Scott also owns rental properties in major cities, betting on rising real estate values among the ultra-wealthy, and values real estate for its stability and low daily market fluctuation. He acknowledges his privilege in having these assets but appreciates the lack of daily market volatility in real estate.

The Future of Education and the Impact of Technology and Inequality

Scott addresses the rapid change in education, emphasizing that teachers are underpaid and overworked, despite the critical importance of their role. He presents data showing US teachers work longer hours for less pay compared to other countries, and discusses the influence of AI and phones in classrooms. Scott supports banning phones and integrating AI as tutors, especially for underfunded schools, to bridge the inequality gap. He critiques the high costs of private education and advocates for targeted income-based support to improve educational equity. Scott also highlights the disparities in education spending and outcomes based on income, emphasizing the need for policy reforms to address economic inequities and provide more resources for public schools and low-income students.

Show notes

Scott Galloway answers audience questions from this year’s SXSW – breaking down why his prediction that international stocks would beat the S&P played out, how he personally invests his money, and why America's education system is failing the kids who need it most.

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