Ep12. Tech Stocks vs the Rest; AI VC Bubble, Calcium CT Scan | BG2 with Bill Gurley & Brad Gerstner

**Bill Gurley** (0:00)
People talk about the military-industrial complex. We may have created a health care-industrial complex that really can't stop maximizing profitability and different ways of making money and not focus necessarily on the lowest cost, best, most preventative process.

**Brad Gerstner** (0:23)
For sure.

**Bill Gurley** (0:23)
That would be my guess, as soon as it's going on.

**Brad Gerstner** (0:38)
Hey, Bill.

**Bill Gurley** (0:39)
Hey, Brad, how are you doing, man? Enjoying the summer?

**Brad Gerstner** (0:42)
I, you know, it's a good start to summer. I was down in DC. I picked Lincoln up from an internship in DC, I guess, just over a week ago now. You know, it was actually the night of the debate. We hosted a poker game on Capitol Hill, and we had members in the game from both sides of the aisle. And we're kind of watching the debate in the background. And it was pretty wild because, you know, we got through, as we're watching the debate, you know, nobody was really surprised at what was happening.
You know, the biggest surprise of the night is nobody was surprised. They're like, oh, yeah, like, this is, this is, you know, the condition of the current president. And yet, you know, so I, we ended the night and ended the debate. And I thought, like, there was not a lot to see here because we've been talking about this for months.
And then, of course, we had the furor of the last couple of weeks, you know, so that was good. And, you know, it seems to me the last few weeks have been like all politics all the time. Every, every, every pod, every show.
You know, and I looked at the calendar. We're a few days away from the Republican Convention. It starts next Monday in Milwaukee, which is really the kickoff of, you know, the final push in the campaign. The Democratic campaign, I looked, is five weeks from now in Chicago.
So it's interesting, sometimes they're closer, and this time they're about five weeks apart. And then I counted up, we have 90 trading days until the election. So 90 market days until the election. And so I thought, you know, maybe we kick off here talking about how funds are positioning, particularly technology funds and the public market are positioning ahead of the elections.

**Bill Gurley** (2:26)
Do you do you believe people are weighing the elections as a critical factor in what they want to be doing with their funds?

**Brad Gerstner** (2:34)
For sure, for sure. But we'll get into that a little bit because you pushed me a little bit on, you know, how much markets are moved by active versus passive dollars, etc. And then, of course, you and I have been talking about a lot of our friends are talking about, I think the biggest debate of the summer in AI continues to be the thing you've been talking about, I think, for quite some time on this pod, which is, you know, is the AI hype ahead of the meat? Do you know, is there is there beef on the burger? If you've been making the case that, you know, the spending, I think, and some of the commentaries out in front of the AI benefits, and we've seen and we'll dig into, I think, a lot of articles out this week on this.
And then, finally, maybe, you know, it was about a year ago that I was talking about a topic near and dear to me, this calcium CT scan and why it should really be standard of care for people over 35 I sent you a video, you know, on some of the politics of why calcium CT scan, partly because of stent and partly because of other things, didn't become the standard of care. And I thought, you know, maybe just as a little bit of summer rap, we'd revisit a couple of topics on that that have come up.

**Bill Gurley** (3:47)
Okay, sounds great.

**Brad Gerstner** (3:48)
That's awesome. Do you want to lead us in?

**Bill Gurley** (3:51)
Yeah, I mean, tell us, tell us where you think the markets are right now.
I agree with your point that politics have dominated the conversation so much. It's almost like people aren't even aware of whether the Nasdaq's up or down in a given day or a given week. It's not really on people's mind.
Tell us what you think is going on. And then I do want to dig deeper. There's a lot of data out that suggests consumer discretionary spending is dropping pretty precipitously. And I'd like to get your feedback on that.

**Brad Gerstner** (4:23)
Yeah, well, let's get into it. I mean, it is wild, right? Like, AI stocks continue to perform really well. Let's think MAG7. Nasdaq's now up 20% on the year. We have Mike Wilson of Morgan Stanley fame, who called the 22 crash, come out and say recently, he thinks we're going to have a 10% pullback ahead of the election.