Earnings Call, Interview, Fireside Chat, Panel
E83: Market slide continues, and how to address Uvalde
All-In PodcastBrad Gerstner, Sacks, Calacanis, Friedberg, TheZachEffect, Jason, Chamath Palihapitiya
- The Federal Reserve is expected to implement two 50-basis point rate hikes in June and July, reaching approximately 2%, with a subsequent pause contingent on upcoming Friday inflation data potentially triggering a market rally or a short-lived "dead cat bounce" before prices decline further.
- A real economy recession is anticipated due to the Federal Reserve withdrawing liquidity, prompting forecasted earnings revisions over the next two to three quarters, with the market low likely emerging during this period of data adjustment.
- The talent market is predicted to cool within the next six months, characterized by startups receiving only one or two job offers instead of the previously common ten to twenty.
- Deal structures are expected to evolve to include two to three times liquidation preference terms as founders attempt to preserve unjustified valuations, while growth-oriented funds may face massive rehabilitation requiring portfolio mark-downs of 50% to 60%.
- Software companies with customer bases skewed toward startups and SMBs are forecast to model higher logo churn as investors cease providing incremental capital to organizations misallocating funds.
- Private markets are expected to clear prices with a six-to-12-month lag behind public markets, with the base case suggesting the market will become investable by fall once inflation rolls over and the Fed's rate upper bound is established.
- The market resolution timeline is projected to range between six months and two years, with specific views suggesting either a short, deep six-month reset or an 18-month duration to fully correct valuations inflated by pandemic-era liquidity.
- A true market bottom is predicted to occur only upon three conditions: founders facing liquidation preferences, management agreeing to 30% across-the-board compensation cuts, and companies returning 60 cents on the dollar to investors.
- Sophisticated debt markets are expected to capitalize on this dislocation, acting as acquirers similar to previous crisis periods, while venture-stage and quasi-public growth companies will face distinct correction expectations.
- The labor market in Silicon Valley is expected to show significant cooling, with at least 3,000 startups projected to appear on layoffs lists, while gun-related deaths and injuries are predicted to continue exceeding fatalities from motor vehicle crashes and opioids.
- Political discourse is expected to impede practical gun control, though early warning systems using machine learning and red flag laws could prevent individuals with identifiable risk profiles from purchasing assault weapons.
- Media cycles focusing on gun bans rather than intervention are expected to drive increases in gun and cell sales, whereas focusing on preventing sales to known psychos could build consensus.
- Upcoming content releases include an "all-in" episode featuring defense company founder Palmer Lucky next week and a return by David Freiberg, while the secular curve of technology solving big problems is expected to continue overlaying the current economic cycle.