Five weeks in a row of selling across U.S. equity markets, and it was about as rocky as it gets. History says there could be more selling ahead, and investor sentiment is at multi-year lows. But this is usually where the dip buyers come in, right? Right, but the last time they did back in March of 2020, the Fed dropped interest rates to zero and the government flooded U.S. households with cash to stem the economic impact of the pandemic.
And the time before that? The Great Financial Crisis was upon us, and the Fed dropped interest rates and flooded U.S. households with money. That's not what's happening now. The Fed will likely raise interest rates this week and may very well announce that the tapering program is complete. Still, the uncertainty around the war in Ukraine and the extreme spike in oil and gas prices leading inflation that clock in at 7.9%, a 40-year high, by the way, may force the Fed to change its tune or at least lighten it up a little bit.
This is a huge week for investors, so let's put our recent losses in perspective. March 11, 2020, was the day the World Health Organization called COVID-19 a pandemic. U.S. markets tumbled 35% at their bottom, and since then, the Dow Jones Industrials are up 41%. The S&P 500: 55%. The Nasdaq: up 64%. Oil prices up 215%. And there are signs that the bottom feeders are buying stocks. In the week up to March 9, investors poured $8.8 billion into U.S.-focused equity funds, according to EPFR, the most in a month, and individual investors purchased a net $1.7 billion of stocks in the week ended Thursday. Are they trying to catch falling knives, are they falling into bear traps, or are they the few brave investors who listen to Warren Buffett and are greedy when others are fearful?
Meet Laurie Segall
Laurie Segall is the founder and executive producer of Dot Dot Dot, a media company focused on exploring the intersection of tech and humanity. She is also an award-winning journalist, having been a technology correspondent for CNNMoney for over nine years. Additionally, Ms. Segall has produced numerous original series and documentaries, including Mostly Human with Laurie Segall, a six-part investigative docuseries that explored technology's impact on humanity. She has spoken at industry conferences, including Internet Week New York and SXSW, where she led CNN’s technology coverage.
What's in This Episode?
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Every era has its barons, and today's barons are the billionaire tech elite founders, CEOs, and entrepreneurs who have created the platforms, the software, and the products that have become core to the way we live our lives. You know who they are. Zuckerberg, Bezos, Dorsey, Spiegel, Systrom, Kalanick. If their names don't ring a bell, their products will. Facebook, Instagram, Amazon, Twitter, Snapchat, Uber. You know who I'm talking about. But once upon a time, they were just dreamers, programmers, EMT workers, kids with a vision for the future and how they would shape it.
No one has covered them more closely or watch their rises and falls more intimately than my good friend Laurie Segall. She's a former senior tech correspondent at CNN, where we work together, and at 60 Minutes+. She's also the founder of Dot Dot Dot Media, and she's out with a new book, Special Characters: My Adventures with Tech Titans and Misfits. Congrats on the book, Lori, and welcome to the Express.
"Thank you. Thanks for having me. It's so exciting to be on with you because I feel like you helped shape my future, so I love it."
"Well, I'm blushing just hearing you say that. We'll get into our past in a bit. But this book, Laurie, is as much about these tech titans as it is about you coming of age in the tech era and as a human being and a journalist at the same time. I got to watch a lot of that happen. But what made you want to write the book?"
"Well I felt like... just like you were talking about in your intro, right? It's like this was such an extraordinary decade of innovation... over a decade of innovation. These programmers and nobodies, I call them misfits in my book, that people weren't paying attention to, they created these products that at the same time, right when I started covering it, people still weren't really paying too much attention to them. And these products went on to just change everything. And it wasn't just the cool app or this or that. This is... they transformed and disrupted industries. And things obviously got complicated, like when you looked at the the other side of the algorithms."
"But I think part of why I decided to write the book was I just had a front row seat to history, right? I was talking to these folks, so whenever we're all jamming in bars in downtown New York and talking about ideas. It was very cool to honor that and to have an idea of where things went wrong, of how things went. And so, it was just interesting to be able to write that story and kind of put my stake in the ground as someone who is also asking a lot of these folks human questions and ethical questions about the impact of their product because, and you probably know this because we knew each other right when I just started, I wasn't just like some really geeky tech person. I was really interested in the culture of what was happening. And so, it felt really nice to be able to... I mean, 'hard' because writing a book, you probably know, was horrible in the creative process, but it felt really rewarding to put it into words."
"And you've had years and years of covering them. And I remember many conversations, some arguments, in my office about, 'Who are these people? Why do we care? Why do we want to spend any time? Why do we want to send you out to Silicon Valley to do it?' But I'm glad we did it because it's produced this, but it's also produced a great corpus of work that you've been putting together over the last 15 years or so since I've known you. Did the success of any of these people shock you in any way? You knew Zuckerberg early in his days. You knew the Twitter founders early in their days. Any of these folks just shock you in the fact that they've become these mega-billionaire titans?"
"Well, I always had this joke that if I thought you were kind of crazy and your product was really super weird and probably wasn't going to succeed, then it was definitely going to succeed and you should invest. I remember meeting Jack Dorsey when he... I knew him from Twitter, but when he had first launched Square... I think you sent me on the shoot, right? I was interviewing him at a coffee shop in downtown New York, and he held up this little plastic square and he was like, 'Yeah, this is going to be the future of mobile payments. And people are going to accept credit card payments on their phone, and you just plug this in.' I was looking at him, and I was like, 'OK, so you think people are going to plug in a square to their mobile phones and they are going to accept payment?' Even just saying it out loud sounded absurd. I think I was one of his first on camera interviews about it. He showed up with no PR people. There was no entourage. He wasn't nervous about saying anything. It wasn't that complicated. And I was like, 'Well, how are you going to get out these squares, Jack?' And he was like, 'I'll hand him out on the street if I have to. You can get him on our website.' Fast forward, you see this in the book, I'm interviewing him when they're going public at Wall Street. And so, it was really fascinating."
"I don't know if it 100% surprised me because I think there's... certain entrepreneurs have a tell, and the fact that he said, 'I'll hand them out on the street if I have to.' This is a guy had already founded a very successful company, Twitter, and he was so obsessed to the point where he would hand out tiny squares to strangers—he's probably a multimillionaire by this point, now he's a billionaire—shows that you wouldn't bet against him. And the same was with Uber. I remember at the time, everyone was like, 'This is so crazy. No one's going to get in someone's car.' Or Airbnb... I think I wrote an article when I went abroad, and I decided to stay at an Airbnb when it was still kind of sketchy, the idea of it. So, I don't know if it was necessarily like it shocked me as much as I think I was curious early on and seeing it all play out was really fascinating and seeing that like, 'Yeah, we were on to something.'"
"Yeah, absolutely. And I think a lot of those bets paid off for them. But you know, these entrepreneurs and founders, they'll try 100 ideas before the right one sticks. Instagram was a completely different concept before it started. Jack Dorsey was an EMT, an ambulance driver, before he even got started with the idea for Twitter. So you never know where these are going to come from. You had unusual access to a lot of these people early in their careers and as they developed their platforms into these multibillion-dollar companies, many of them public today. How did you establish that access? Was it the fact that you were there early or was it the fact that they wanted to talk and you were there ready to listen?"
"I think it's a bit of both. I liked the band before the band got cool. So, it was that I got to know a lot of these folks and I would try to convince people at CNN to put them on camera and myself too. It was like a lot of scheming going on behind the scenes to get these people on right before people are paying attention. And so, I think I was part of this small group of journalists that was paying attention to this. And so, I became a go-to, at least for CNN, of if you had a product and you wanted to get it on a mainstream news outlet, you would come to me. And so, then there was that comfort of folks coming to me or knowing that I was in there early. I know what they're talking about. I'm not just some person coming out and being like, 'What's Twitter?'"
"And so, I think it started to grow like that, and I also did develop relationships with folks. You interviewed people through the beginning of their companies. And so, this is the launch of Instagram or this is what Instagram is. Then when things get more complicated, they're going to want to talk to you because they don't just go with someone random. And I think I saw that as... and then, by the way, that didn't always work. Like Travis Kalanick, the founder of Uber. God, I remember coming into your office after this, but I remember I had asked him about women's safety in his... I interviewed him early on, and then he came back to talk with us at CNN Money about Uber's partnership with American Express. And I remember him being in the newsroom; me interviewing him; Erica, my producer, at the time, was behind the camera; and I had said because Uber had an issue with women's safety. Two women had been attacked or something in their vehicles over the last month. They now have a multibillion-dollar valuation, worth more than many Fortune 500 companies."
"And I asked him about women's safety in their cars, and he started taking off his mic. He was so angry that I had asked him a challenging question, which, by the way, in retrospect, that's not that challenging. Anyone should have a company line for treating women safety seriously. But I remember him taking off that mic and saying, 'You know, Laurie...' He just kept repeating my name. He's like, 'Laurie, Laurie.' And he was like, 'You know, I didn't know this was that kind of interview.' I was like, 'What kind of interviews?' He's like, 'A gotcha interview.' And I was never just a gotcha journalist, as much as I was always asking some of these questions. And I think that for me was a moment of... I mean, I think I came to talk to you afterward."
"I remember that well, I remember that well. And that access is important when they want to talk about something, but when we, the press, want to talk about something, they have to be there. There's this growing drumbeat, you alluded to it with Uber, but it's out there with a lot of the other platforms, against a lot of them on the antitrust front, from the government all the way to consumer watchdogs who say they're responsible for depression, elevated suicide rates among teens, spreading false political information. Did any of them expect that kind of backlash at the time that they were growing these multibillion dollar companies?"
"No. Absolutely none. You could argue if they had had more of a diverse group of people building out these products, that maybe there would have been more of an understanding of humanity and where things could go wrong. But the Facebook move fast and break things motto that used to be up all over the campus is no longer up anymore. They wouldn't be caught dead with it. It was really telling. I think someone once said to me, I think it was the former head of security at Facebook, that they used to have a bigger building for growth engineers than they did for security. This is before the misinformation, the election, and learning about the extent of Russian disinformation."
"And so, I think they didn't expect it, but maybe they should have. Or you could argue they didn't expect it, and who knows... when you put out technology, all the bad actors are going to get involved in some capacity, but they didn't move fast enough or really pick up on those cues. And I think when we looked at the political implications, what it's done for mental health, it's not like this came out of nowhere. We were asking these questions for so long. I was joking with someone about the social dilemma and the Netflix doc that got all this attention and was really... folks love this, and they thought it was such a great thing that this is finally out there. I think the part of me that kind of killed me a little bit about the social dilemma was we were having this conversation for the last decade. Just because a lot of these founders took that moment to have their come-to-Jesus moment with Netflix, that doesn't mean we weren't asking them these questions way before. This isn't, you know, you turn the corner and all of a sudden it's used for bad."
"Right. And Zuckerberg is famous, but he's not the only one, for saying that 'Facebook and Instagram are just the platforms, not the messenger, not the megaphone for its content.' Where do you weigh in on this? You've studied this so closely."
"I just remember the argument, 'We're just the pipes. We just let the information flow through us.' Everyone from the Twitter folks, Facebook, all these channels of content used to say that. And I remember asking Mark Zuckerberg for a doc we were filming, 'How does it feel to be editor-in-chief of the Internet?' And he did not like that question."
"I think now tech companies have finally caught up to this. They are not just the pipes because the pipes don't have algorithms that push us towards one thing or the other that amplify certain things or that make decisions on their own to do certain things or can be weaponized by trolls with varying motives. That doesn't feel like just a pipe to me. That feels like a crazy place that needs a lot of moderation, a lot of regulation, a lot of different types of things in order to not get out of hand. So, that argument that, 'We are just the pipes and that we let the content flow through us,' is an old argument. And I think all of these companies had that come-to-Jesus moment of having to understand that, 'No, not only are we not just a content platform, but we help shape content too. And so, there has to be... whether it's regulation moderation, we need to build around that.'"
"They say they're starting to, but we'll see. Time will tell on that. You created, Laurie, the Almost Human docuseries and franchise for CNN. You've always cared about and covered the human impact of these platforms. Are they helping us be better people or are they hurting us? Where are we going with this?"
"It's a good question and a hard question because I think they're both. It's like one of the ways the technology is neutral. Not sure how much I believe that technology is completely neutral, but it can be used for good and bad. I think they have helped us in so many ways, and I think they have harmed us in so many ways. And I think we're actually sitting on the cusp of a new era of the Internet, which is super exciting. You had this last... and I'm sure people who listen probably... I don't want to be overly whatever, but I'm sure they have this understanding of one: the democratization of information and websites coming up in the dotcom boom. We have Web2, which where I started, right? Which was mobile and social and this idea of a more two-way relationship, not just reading information. But in that in that world, Twitter owns all of you. And Instagram, if you spent your whole life putting out your Instagram stuff and if Instagram disappeared, so would your information. And so, there is a lot more power over the user and technology."
During the dotcom bubble, the Nasdaq peaked at 5,048.62 on March 10, 2000.
"And so, now we're entering this new era of the Internet, which is Web3, which is this idea that we have digital ownership. And NFTs are just the beginning, I think, of what it will actually be. And this idea of a more decentralized Internet, which is a utopian version of like, 'How do we make this next era of the Internet better than the last?' Now you have to look at that. A lot of this is kind of running on crypto, this idea of the metaverse, NFTs. So, there's a huge barrier to entry. And I like this idea... kind of reset of the Internet and an Internet where we have more control over our digital selves, which is super interesting when you talk about living in these immersive worlds and avatars and whatnot. Maybe it's not all about just our carefully curated images."
"All that to say, all the things I've learned over the last decade of covering technology, of listening to utopian, baby-faced entrepreneurs tell me that we're going to change the world for the better, tells me that we are entering an era where you have virtual real estate boom happening and all these people buying up virtual real estate. And the people who can afford it are all generally like White men, and they're building out that infrastructure. You have a lot of these investments happening, and they're also investing in a lot of men. And there's much more of an understanding of crypto from a certain demographic. And so, if we don't onboard more people into this area, we're already going to screw it up."
"And one other example, there's this idea of a decentralized autonomous network, which is a DAO that everyone's kind of talking about. I think the best known example is the Constitution DAO, where all these people gathered together, created a DAO, which is like a group chat with a balance sheet, to try to purchase the Constitution from a Sotheby's auction. They did not succeed, but it showed the power of the next iteration of Kickstarter-type funding through like blockchain, which is fascinating. And it could have such implications for politics and business, and that's where I get so excited."
"And then I think about when I embedded with QAnon a year and a half ago for 60 Minutes, and they didn't like the piece that came out, and I became a Q-Drop on their conspiracy board. They called me a domestic enemy, which was certainly an unfortunate couple of days for me when they all came after me online. But imagine if they had a DAO and they were digitally weaponized with a balance sheet that they could actually put funds behind that. And so, if we don't look at the bad early on as we talk about the good, and we don't get enough people in early on to build out an infrastructure, we will repeat the same mistakes we made a decade ago."
"Yeah. You mentioned if they had a more diverse board when they started, or more diverse employees, a lot of these platforms might not have evolved the way that they did, but they don't. And to your point, what's being built now is, again, being built by engineers, mostly White men, mostly billionaires (who are mostly White men). So, we could get into the cycle of income inequality. Let's take the the metaverse and Web3 just a step further because you know these companies are spending billions and billions of dollars and building out this next thing, whether it's the metaverse and Facebook changing its name to Meta or Square to Block, and Web 3.0. What does that look like in a Facebook or Instagram world? What does Web 3.0 look like if I'm living in it?"
"I think, well, part of it is you're living in it. It is this idea of living in a more immersive space. You could take it in so many different ways. Is the metaverse going to be like Zuckerberg's version of this, where we're in this almost like Neal Stephenson Snow Crash world where we kind of put on a headset, and me and you are able to have this conversation, and it feels like we're next to each other. We're not just on Zoom, we're actually in a space next to each other. And that gets interesting, and what they'll tell you behind the scenes, and what I think you're going to hear more and more about them talk about, is this idea of spatial audio, where if you were sitting next to me, you'd probably hear as I dropped my pen or... and it just it's this weird thing where it's like, 'Oh, wait, a second, this feels a lot more human.' And so, that could be really cool."
"I think there are a lot of issues that come along with that, but I think that's for Facebook. The version of... that's really, really interesting when it comes to the future of the metaverse, I think in general, if this is to live up to the idea of Web3, which is more decentralized, there won't be one metaverse. You have companies like Decentraland and Sandbox building out these. And Roblox, of course, building out these virtual gaming experiences. And it won't just be that people are gaming. They will be building land, they will be having their own shops, they will seeing concerts, they'll be having their own friends in these communities, and our children will have jobs that we didn't even know existed in some of these communities. That's crazy. All the more reason why we need to talk about misinformation and all this kind of stuff because it will create a whole new arena for that."
"And then I think there will be this idea of, and we think about this with D3 and what we're doing with other media companies, a modern day subscription or a way to have ownership in the upside of a company where you could buy the NFT membership pass to a certain venue. So, let's say to our media platform, we'll have a normal subscription and then also an NFT membership or subscription where people can essentially own in the upside. If we get more valuable, the NFT gets more valuable. They'll actually give you access to something interesting that might actually just be in the real world, whether it's in-person conferences. So, I think we'll see the idea behind NFTs evolve past just like these interesting art projects that go bananas and then also some that just disappear. So, it's really exciting. I think Web3 is really exciting."
"Yeah. Listeners will remember our conversation with Gary Vaynerchuk, who was very deep in NFTs, that it's not just about the doodles he makes. It's about the experience; access to him, events; and a different way to engage with the content. You're building it. These big platforms are building it. It's phenomenal to watch, but also, as you say, a little bit terrifying. How are we going to remember many of these tech titans that you've been covering 100 years from now? Not that you or I, definitely not me, is going to be around in 100 years, but how do you think we're going to remember them and think back?"
"I mean, I think it's a good question. I think a lot of them are pretty interested in their own legacies to tell you that, even behind the scenes, they all want to build something that they'll be remembered by. I think we will think of these guys... and I think guys because a lot of the big ones you name at the beginning were built by men, and I hope this next iteration isn't just that. But I think we'll remember them as kind of the modern day inventors of the future, and I some will have more complicated stories than others. And I think it also depends on who writes that. But I think that the media has done a good job of really scrutinizing these companies and what not. So, in a hundred years, I think that these will be the modern day adventures that transform society, and we're already seeing the history being written about them. Look at... we're already seeing the shows being written about it. I mean, I just wrote a book about the last decade. It's such a fascinating thing to see, and I think some will be remembered more kindly than others."
"Well, you've done such an incredible job of covering them. And you're right, we are now documenting them. We're creating series about them, there's movies about them, and they're changing the world under our feet as we speak. What's next for you and dot dot dot media? I know you're going to be covering this pretty closely as long as you can. What are you up to?"
"I think I alluded to it a little bit, but we just launched D3 Network, which is... we're building a whole network for Web3. So, whereas you have Block and Decrypt and these inside-baseball crypto type folks covering Web3 as a whole, and then you have on the other end The New York Times and The Atlantic covering it as a beat. There's no all-encompassing place to cover all of this for not just the crypto-end centers but the crypto curious and then, from there, the folks who want to get into this world. And so, we're building that out right now, and it's really exciting."
"And what I think I'm really excited about is not only are we building that and we're interviewing a lot of the new titans, the folks that I think you should pay attention to, very similar to what I did in 2010. So, we just put out an interview with Nicole Muniz, who's the CEO of Yuga Labs, which is behind Bored Ape Yacht Club. And I'm selectively choosing people I think that will be kind of the new titans are people need to pay attention to, and this is the way we're starting. What I'm really excited about is how do you build a modern-day media company with this idea of transparency and ownership? And how do we apply the best of what what Web3 has to offer, while trying to make this next era of the Internet a little bit kinder and more accessible?"
"And so, we're doing that. We're going to have an NFT membership pass, so you're going to be able to subscribe to us in a normal way with U.S. dollars. But you could have an NFT membership pass where you're going to be able to get a subscription to what we're doing with crypto and have access to a Discord we're building out that's like a modern day newsroom, where you'll have access to the decisions we're making. We're going to build out a media DAO where we can fund projects and purchase IP. And so, I've called it a Web 2.5 company because I don't think you can go all Web3 right now and also say you want to onboard mainstream people. So, I think what's next for me is hopefully at some point try to get some sleep but build out this platform and hope that the people really pay attention and want to be a part of it."
"If anybody can do it, I know you can do it. It's been so phenomenal to watch you go from working on the assignment desk with me to CNN to becoming that senior tech correspondent and all the moves you've made from there on and this fabulous book. I'm very excited for it. Special Characters: My Adventures with Tech's Titans and Misfits. You can preorder it. I'm going to put the link in the show notes here. But folks, preorder it on Amazon or wherever you get your books, maybe a small bookstore. But also follow Laurie, follow D3 and all the good things you've been doing. Congratulations on this. I'm super excited for you and so happy you joined the Express."
"Thank you. So glad to be here with you."
Term of the Week: Demand Destruction
It's terminology time. Time for us to get smart with the investing in finance term we need to know this week, and this week's term comes to us from Cindy in Houston, Texas. We have a lot of smart listeners in Space City. Cindy suggests demand destruction this week, and we like that term, given the madness in the oil market these days. Well, according to my favorite website, demand destruction is a permanent downward shift on the demand curve in the direction of lower demand of a commodity, such as oil, caused by a prolonged period of high prices or constrained supply. We've got both of those.
Last week, oil's parabolic rally paused after U.S. inflation rose to a 40-year high, sparking worries that surging prices could hasten the onset of demand destruction if prices rise too much. We'll drive less, fly less, and find ways to cut back on demand. In the meantime, more supply is not a given, especially given some of the disagreements inside OPEC+ and the complications of getting more supply from Iran back onto the market. It's a very slippery time in the energy market, and prices could go either way. They could go a lot higher, especially if European countries ban Russian oil, or they could go a lot lower if Russia stops its invasion into Ukraine. Either way, smart suggestions Cindy in Houston, Texas. Socks are on the way, and we'd like to see you sporting those on your next night out on Green Street in lovely Houston, Texas.