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Scott Galloway@profgalloway

Published on February 28, 2020

4-min read

The worst thing about a cataclysmic weather event, or a single-stranded-RNA virus that wipes out the species is … it might impact the economy. Take my eyes, but don’t let the NASDAQ breach 8,000!

That’s how it feels, no? In a capitalist society, good or bad, the first words out of Lester Holt’s mouth tonight will be about the market plunge. The last 3 minutes of the show will be a touching story about a dog that helps wounded warriors make breakfast. National sacrifice and devastating injury are meaningful, but Apple dipping below $180 is profound. On Thursday, the markets registered their largest recorded one-day drop, plunging to levels not seen since … 4 months ago. 

So, as I too opt to ignore the non-carbonated plague inspiring mayors of major cities to declare a state of emergency, I’m planning on visiting several hot zones tonight. I’ll have dinner at Indochine, then hit The Blond (a lounge where I feel old), and then another lounge called Casablanca, where I should feel really old, but will be 4 Maker’s & Gingers deep and will feel like I belong … right there, right now. In-between acts of arrested adolescence and suppressing the sum of all my fears, I distract myself by thinking about the markets. 

Bright Side

Let’s be clear, the NASDAQ dropping is a bummer for old people, who own most of the market. But it’s an opportunity for young people, who would also someday like the chance to buy a home for less than $2,000/sq ft or shares in Amazon below 50x earnings. So where is the opportunity? Two ways to play it — defense and offense. I’ll talk about offense next week. 

Defense: Find great companies on sale whose business, short term, may be significantly impacted, but whose fundamental value proposition is largely unchanged and will enjoy a disco-like recovery. 

Example: Carnival Cruises. 

I’ve never been on a cruise, and I’m planning on not taking a cruise every year for the rest of my life. But despite stories of cruisers being quarantined on a docked ship and images of people being removed on stretchers, I don’t see anything getting in the way of cruising. Btw, 3,700 people trapped in a contaminated box for 39 days (4 deaths so far) is terrifying. But it seems oddly normal that in the US we have half a million people in prison due to nonviolent drug offenses and another half million who haven’t been convicted or sentenced but just couldn’t make bail. But I digress.

There are neighborhoods in every city (the Marina District in SF, the Upper West Side in NYC, the Buckhead in Atlanta) where you live in the city, but don’t really live in the city. These are all one affluent neighborhood, divided among several cities. Cruises offer a similar opportunity to travel without really having to travel. Most cruise ships are the Radisson Chicago, minus the charm, roaming the Earth at a jogger’s pace. 

The cruise industry is the fastest-growing segment in the leisure travel market with demand increasing 62% between 2005 and 2015. And cruisers just want to keep on cruising. 92% of cruisers will book a cruise as their next vacation.

Carnival has reported accelerating revenue growth for the last four years and 40% gross margins.

Demographic Shift

Sound travels 4 times faster through water than air. In general, cruise lines offer a similar ROI relative to other transportation firms. Peter Drucker said that all great businesses are powered by a demographic shift. The Queen Elizabeth 2 has two huge variable-pitch propellers, each with a diameter of 22 feet and weighing 43 tons. The propellers of the cruise industry are an aging population and consumers’ desire for less choice and frictionless leisure. 

Rookie marketers make the mistake of thinking choice is a good thing. Choice is a tax on your time and attention. Consumers don’t want more choice, but more confidence in the choices presented. Customers want someone else to do the research and curate the options for them. You could try to merchandise a better itinerary on a boat through Southeast Asia (hotels, meals, activities, planes, trains, cars), or you could let someone else figure it out for you.

In addition, the largest transfer payment in the history of mankind has become one of the biggest corporate subsidies in history. Social Security is a transfer of wealth from the young to the old that costs more than the defense budgets of the US and Europe combined. 

The $1 trillion we spend on Social Security each year takes senior poverty rates from 38% to 10% percent. So, is Social Security the most successful program in history, reflecting well on our society, or the meteor heading for our economy? The answer is yes. Social Security lifts 7% of Americans (28% of the elderly) out of poverty. Put another way, we spend $50,000 a year per person to lift 20 million people above the poverty line. 

Twice that — 37.2 million people, including 18% of the nation’s children — live in food-insecure homes. Home instability in turn leads to double the cortisol levels of children in secure homes, which leads to poor academic performance, which leads to lower professional success. In contrast to Social Security, we don’t leave $400 of groceries every week on the porch of every household that has children. Why? Because kids don’t vote.

Why are we stealing time and work (i.e., money) from future generations? Because mostly old, mostly white people, mostly in Iowa, New Hampshire, and other predominantly white and old states, determine who is elected president and write the script for politicians’ narrative. The greatest threat facing our society is not income inequality or climate change, but generational inequality. We have legislated theft from young people, which leads to loss of faith in democracy, the rise of fascists and socialists, and defunds governments, who are our best hope to counter climate change and income inequality.

So in the spirit of CNBC displacing the front page of the NYT (money trumps humanity), let’s return to the all-important topic of how we make cabbage from this pandemic. For 70% of seniors Social Security isn’t the hand lifting them from poverty, but upgrading Nana and PopPop from Carnival to Princess. One of two people on a cruise are on a Carnival Inc. boat (they own Princess, Cunard, Aida, Costa, Holland America Line, P&O, and Seabourn). The stock has been understandably hit hard by fears about COVID-19. The firm trades at a single-digit p/e ratio and offers a 6% dividend. 

The deepest pocket in the world has more people every day reaching into it and spending the Bisquick on cruises, including truffle hunting in Croatia (SeaDream Yacht Club), snorkeling with Sea Dragons (Holland America), or Braving the Elements with Penguins (Silversea Cruises). People believe that cruising is the domain of the old, as they have different preferences. No, it’s because people sub-40 don’t have the money to pay someone to carry their backpack up the Inca Trail.

Unregulated monopolies and firms subsidized by the deepest pocket in history — the US government — are the only companies young people should invest in. Millennials, celebrate tonight and hope the markets continue their rational decline. This might offer you a shadow of the opportunity that people swimming with sharks have enjoyed the last 50 years.

Life is so rich,

P.S. I’m launching a new podcast March 19th called The Prof G Show. It’s Howard Stern meets CNBC, minus the genius and sleeveless dresses. Subscribe on Spotify and Apple.



  1. Ara says:

    Nailed it

  2. christopher quirk says:

    Usually I agree with Prof G- this time NO-cruises are dead ducks- maybe only for 5 years -probably for a lot longer-Let’s sea (sic)

  3. Maricella says:

    I think you are confusing social security recipients with retired east coast public servants

  4. Eyosolo says:

    I’d recommend a formal apology to all Pivot listeners that may have heeded your advice. Pivot should cease giving investment advise. This not Mad Money with Jim Cramer. At minimum have a legal disclaimer at the beginning and end of podcast.

  5. ednazperry says:

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  6. Perry T says:

    You are one of two things: autistic or a Down’s syndrome patient. Either way your head is full of lard (and you are probably bald, to boot). Anyhow, this is some of the worst rationale I’ve ever seen from a self-annointed “PROFESSOR” who couldn’t find his toothbrush in a cabinet full of finasteride (“PROPECIA”). This post has not aged well, maybe you can pull it down to save some of your pizza stained face. SAD!

    • Aaron Banschick says:

      No wonder Scott thinks there are people orchestrating attacks on his content 😂. His analysis has aged very well and your comment is an incoherent mess. Also – “probably” bald? No one is as honest about anything as he is about this.

  7. Stephen says:

    am I missing something ? I’ve read this twice , doubting my ability to understand written word. The tangents drawn between various points are tenuous if that. Eg . Segue from QE2 propellers to link ships to …. something or other to …vague … re focus ; America’s wealth gap , money ; social security …. After checking in with others , we agree this article has poor structure. With lots and lots of digressing .

  8. Padma says:

    I see your point but disagree because Social Security is an insurance I paid into. Remember when it was actually called SSI in our paychecks? What about expecting to be paid back on my investment in my Social Security & Medicare payments is distasteful? After all I’ve paid a good portion of my earnings for 30 years.

    • Smart Bob says:

      This is not factually accurate. It would be “insurance” if at the time you were buying it, you knew that the money you were putting in was secured in some way. But, with social security, the government has been spending that tax money as general revenue, and borrowing more, with the approval of officials you elected. You knew at the time that you were paying social security that those funds were simply being used as general revenue, so the only source of getting a return on that money would be to steal from a younger generation, and you always knew this was happening while it was happening. It was never a surprise, so you can’t claim “I did not know.” The plan has always been to spend all social security revenue now, and steal from they next generation later. That is not insurance.

  9. Vince says:

    If you haven’t already, you should read David Foster Wallace’s essay “A Supposedly Fun Thing I’ll Never Do Again” – his hilarious take(-down) of the cruise experience. It’s riotously funny but also exposes many truths that should resonate.

  10. Mario says:

    Mostly spot on, but I have a contrarian view on Social Security: if you contribute to the program you should expect to receive your SS payments. It is not our fault that the US government has “borrowed” that money never paid it back, and decided to run what was once a sensible social program as a pyramid scheme. I’ve been contributing to the system for 30 years, so I expect my money back, adjusted for inflation, when I can’t work any more. Likewise, if Nana and PopPop contributed to SS all their life, they’re entitled to their money and to spend it however they want, including upgrading from Carnival to Princess.

    • Smart Bob says:

      You did not pay into social security and are not entitled to get that money back. The money you paid into social security was simply spent at that time by the elected officials you elected, who then went out and borrowed even more money in excess of all tax revenue to spend on you and your friends who elected them. You could have voted for fiscally prudent politicians, but you did not. You should have no reasonable expectations of receiving any return on dollars you contributed to social security, because your elected officials already spend that money on other things, and borrowed to spend more, with your approval. You simply want to steal from a younger generation because you failed to elect fiscally prudent politicians. That is your fault, not your kids’ or grandkids’ fault.

    • Clare says:

      @Smart Bob

    • Clare says:

      @Clare tbf – I don’t think people knowingly voted for those over-spenders

  11. jose araujo says:

    Social security contributions shouldn’t be looked upon like taxes, they are forced savings so you can live after you can’t work anymore. And yes old people are earning more than you people, but mostly because wages haven’t moved.

  12. Santosh Srinivas says:

    dude .. Kara is cool .. but old Scott is awesome …I’ve got a lot of catching up to do I guess … WTF is Pivot?

    • CalmDown says:

      Pivot is (twice a week) podcast hosted by Kara Swisher (recode) and Scott Galloway (NYU stern).

  13. ML says:

    Did Apple go down below $180, or was that a typo?

  14. Brendan says:

    Trying to figure out if prof G actually goes to the blond and casablanca

  15. Gary Helminski says:

    Thank goodness you are creating your own PodCast. I listen to Pivot to hear you. Kara condescending attitude towards you on the PodCast is hard to take. She talks to you like a child. You need to move on.

    • Jason says:

      Kara’s narcissism is 100% out of control. She used to be quite good journalistically and she is smart. When Walt moss berg was her partner it was more in check. Now she is just a flat out egomaniac narcissistic. EVERYTHING is about her and her criticizing tech. Unfortunately Scott gets caught up in that because he needs her validation. Also Scott is way too smug and holier than thou as he ages. Trump has thrown him into mostly emotional state and less logical. C’mon bring old Scott back…

    • Emily says:

      @Jason would you say the same about a man?

    • Mel says:

      @Emily Scott is a man.

  16. Nas says:


  17. Mark Alan Effinger says:

    Scott, in all my life I never thought you’d lean into Gilligan’s Island as a future investment bet. (And I thank you for that tip…;-)

  18. Kelly says:

    I’d love to read your analysis of the insufficiency of the oft-referred to poverty line. To understand the reference we need to understand the reference, right. I also want to thank you (Scott and team) for your sublimely engaging work.

  19. Walter Sparke says:

    Yes it very unfortunate about the people in prison, blahblah, but hey! let’s make some huge returns on Carnival cruises! 🙂

  20. Gary says:

    Thanks to your advice in the Algebra of Happiness I’m 90% in cash! Mattress time! Thanks!!

  21. Erobes says:

    I can’t tell if I’m supposed to buy CCL or just laugh at old white people? Either way I want my social security money back

  22. Tee says:

    Thank you for being the voice of reason in this current shit show we call Earth. Feeling better already after another sleepless night.

  23. Jack says:

    Spot on again. As an older rich white man who likes to travel (no cruises so far) I like to think that some of that social security money is making its way into the pockets of low income people in the destination countries, as well as providing some incentive for natural preservation.

  24. Dec says:

    Did anyone else listen to the Pivot podcast on their lunch and come back to the article?

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