Thanks for the thoughtful question, and I'm a little bit biased here because I did move to Europe four years ago. I didn't do it because I was leaving America. I did it because America offered us so much prosperity that we had the opportunity to move our family to Europe for a few years. I've really enjoyed it. I'm looking forward to coming back to the US because I still think — I don't know — there's nothing that makes you realize how American you are than living abroad. But anyway, for the first time, even since I moved there, I'm hearing from a lot of people saying, 'I'm thinking of moving to London or somewhere in Europe.' And generally, the wages are lower if you're working. But when you factor in the fact that you don't have to pay for health insurance, often times there's universal pre-K. Often times you feel comfortable sending your kid to a public school because people — I think some people would argue that the public schooling system is better in certain countries in Europe than the average public school in the United States. And also just a — I don't know — a greater comedy of man. Spend some time in Northern Europe and they just all seem to like each other more or have more, I don't know, empathy for one another. Anyways, I think that there is something to the notion that there'll be an arbitrage. Especially it seems that Trump is hellbent on getting people out of the US, even if it's getting some of the most talented people or people who are willing to pick our crops or take care of grandma for less money than, or build our homes for less money than domestic workers would do, which is inflationary. Last month, Trump imposed new 10 and 12% tariffs on goods from 60 trading partners, including the EU. And the administration also announced 50% tariffs on approximately 20 billion of Canadian products. Jesus Christ, what the [__] is he thinking? By the way, all that does is increase the cost of our products that we consume from Canada and shrinks our market because they're not going to just lay down and play dead. They're going to put reciprocal tariffs on our products. In response, Europe and Canada are building partnerships to reduce their dependence on the US. This year, Canada proposed a global defense bank backed by 10 countries so far to bolster the defense of like-minded allied nations. There's new security and economic partnerships. Canada and five Nordic countries agreed to deepen cooperation on military procurement and other areas. In terms of equities, or thinking about this from an investment standpoint, I'm investing in European index funds. One, because I'm at a stage where diversification is my call sign for investing. I don't want to get rich. I just don't want to get poor. And when you're young, you make a lot of money through concentration, specifically concentration of your human capital, going 110% all in on something. And you can afford to be a little bit more concentrated in terms of your portfolio and take some bigger swings. Although I still am a fan of low-cost index funds and just putting them away, automatic savings, never thinking about them. And the younger you start, the less you need to put away. I'm at a stage where I want to be very diversified. And investing in SPY or S&P index funds is not that diversified. 10 companies, 40% of the S&P. So the reason I like investing in Europe is Europe's kind of been left for dead, which says to me that there's opportunity here in terms of the equity markets, the rotation. You know, word's already out. In 2025, European stocks beat the S&P 500 for only the second time in a decade. And for a US investor, it wasn't even close. The Euro Stoxx 50 returned about 38% in dollar terms. You know, it's very hard for us to keep pace when the dollar has lost 28% of its value in 2020.
And it was 18% for the S&P versus 38%. Again, a good chunk of that delta comes from the falling US dollar as we become politically reckless and spend 7 trillion on 5 trillion receipts. And also, there's just no getting around it. US valuations are stretched. The S&P's Shiller index, a measure of how pricey stocks are by comparing prices to 10 years of earnings, is sitting around 41, which is the second highest reading in 140 years, behind only — guess when — the dot-com peak. The historical average is about 17. Get it? It's at 41. Historically, it's about 17. And European equities trade at roughly half the multiple for similar sector exposure. At some price, every stock is a good buy, unless it's going to zero, which most stocks aren't. And at some price, every stock is a bad buy. No matter how great the company is, the valuations can get ahead of its skis. The falling dollar has done a lot of the work here. The dollar dropped about 9% in 2025, its worst year since 2017. And the euro rose from a buck 4 to a buck 18. For an American, a stronger euro means your European holdings are worth more than when you bring the money home. So you get a double boost. You know, that makes Europe a little bit more expensive, but Europe is still cheaper — the stocks — because quite frankly it has less exposure to AI and hasn't registered the run-up. And that's really the trend that's driving returns across even the small stock indices are catching up. If you follow where the money is actually going, investors are adding Europe on top of their US holdings, not selling America to buy it. So, look, there's two things here. There's lifestyle. I think you constantly want to be looking at lifestyle arbitrage. I think Europe is a great arbitrage — quality of life there, slower pace, kind of a greater — less, I don't know, less. It feels like it's less polarized, but maybe I'm just not as in touch with it. I think it's a good move here. And I don't — I've seemed or heard from more people who are thinking about moving to Europe.
Although, having said that, look, it all comes down to the same reductive statement. When you're in your income-earning years, I find the US is still the best place. People in the US start from a position of yes. How do we make money together? How do we do stuff together? And Europe is the best place to spend it. That's not to say you won't be successful as a young person in Europe. I just think it'll take longer. And from a lifestyle standpoint, I think you constantly want to be thinking about a lifestyle arbitrage. It's situational, but I wouldn't be afraid in this day and age to take advantage of the greatest or one of the greatest innovations in history, and that is jet transportation and your ability to go somewhere else. So I think it's an incredible opportunity. It gives you better perspective, makes you better, I think, at what you do. It is situational, but yes, geographic arbitrage, intra-country and then international, if you're blessed with that type of opportunity, I think it's an interesting idea, an opportunity. But I do believe that just based on valuations, people need to be very thoughtfully thinking about diversifying out of the US. Appreciate the question.
Support for the show comes from Odoo. If your business runs on five different apps, 12 browser tabs, and one spreadsheet that everyone's afraid to touch, it's probably time for Odoo. Odoo is an all-in-one business management software that connects every part of your business into one powerful, easy-to-use platform. So instead of wasting time switching between disconnected systems, your entire business works together in real time. Your team moves faster, your data stays accurate, and you can actually focus on growing your business. Let one unified system run your entire business. From the first opportunity to the final payment, everything works together in one place. Whether you're a small business or managing a large operation, Odoo gives you one flexible platform built to grow with you. Try today for free at odoo.com/profg. That's odoo.com/profg.
Question number two comes from a listener who emailed us. 'Hi Prof G, love all your stuff. I listen to about 40 hours of podcasts a week.' Jesus, stop that. Get outside or I don't know, that's a lot. 'During that time, I listen to nearly zero minutes of ads because I can skip through them. Additionally, I don't listen to about 100 podcasts per month that automatically download. Other than premium subscriptions, these two things make up nearly all of podcasting revenue. Have advertisers discovered new metrics to account for these variables?' Okay. So, recently, Megaphone, a hosting platform we use at Prof G, changed how plays on Spotify are accounted. They're getting hip to this. We now get a play each time someone watches or listens to an episode for at least 30 seconds. And still about half of podcasters use downloads as their main metric for measuring success, followed by listens and then consumption rate. So if your podcast episodes get around 25 to 30 downloads in the first week after release, you're already in the top 50% of podcasters. Ad dollars continue to grow. I mean, this medium is growing faster than any ad-supported medium — quote-unquote, the creator economy. It's growing faster, off a smaller base than Meta or Alphabet revenues right now. It's expected to be an $18 billion business — podcast revenues — by 2030, and nearly half of weekly podcast listeners have purchased a product or service after hearing an ad on a podcast. There's two things. There's a measurement here. The dirty secret of the ad ecosystem is that once someone subscribes to your podcast, when it's downloaded — the podcast gets automatically downloaded off the RSS feed — and some agencies will try and use that as a listen. Now, advertisers are hip to that, and the CPMs reflect that — that okay, maybe only half the people who the podcast is automatically downloaded to the iPhone will actually get listened to. This is what podcasting has going for it. The people at the New York Times think they're too precious to read their own ads. Okay? They think it's a conflict. Fine. When you hear my voice read an ad, supposedly you're more likely to listen to the ad and more likely to trust the advertiser, as opposed to when you're watching CNN or Fox and the ads come up on your screen of like, okay, do I really have restless leg syndrome, and who is this ethnically ambiguous person telling me about opioid-induced constipation medication? In addition, the podcast medium itself is more powerful for advertisers because physically I'm in your ears — like physically, because people listen to it on their AirPods — and also you're doing something intimate, so it feels like we're friends, and there's just a greater affinity. So the host-read is one of the greatest innovations in advertising, if you will. So more intimate host-read over the 30-second spot. The biggest trend I see — so a lot of people are obsessed with subscriptions, and we have subscriptions on podcasts, but you have to offer a lot, right? There's more people than you would think willing to endure the ads for free. That's still the biggest ad model. Subscription is for your hardcore fans that don't want to listen to ads, want exclusive content, want to feel like they're getting something special, and that's a supplement. We've invested a lot in that because if we can grow the subscription business faster than our core business, it'll increase the multiple on the business. And I'm constantly thinking about enterprise value. The biggest next trend I think is going to be is what I'll call strategic, or what I think of as NASCAR deals or F1 deals. What do I mean by that? I drink beer. I love beer. So I'm talking to a brewer right now about saying — okay, they called me and said, 'All right, we see you drinking our beer. We'd like to do a deal with you.' We have data partnerships where we highlight the data from a certain company, or I'll talk about a specific — there's certain AI platforms that I like and others that I don't, and they say, 'Okay, if you disclose that, you can disclose that this is a paid partnership, but talk about how you use our AI platform in an organic way such that it doesn't feel like a direct ad.' Those deals bust out of the cost-per-thousand downward spiral. CPM is essentially our ads get $40 to $45, $50 CPMs. That's cost per thousand people you reach. So for every thousand people that an ad would reach on Prof G, we get about 40 or 45 bucks. By the way, CNN gets about 13 because advertisers have figured out that we have a young, wealthy male listener on average. That is the white whale or the unicorn of advertising. And everybody wants to reach that person because the majority of them are listening to Spotify and watching Netflix and don't see ads. So they're willing to pay a much higher CPM. Where you get even much bigger CPMs is in a strategic deal where I might say, 'Okay, I drive X car and I'm going to talk about it a lot. Maybe I even do some videos from the car.' I mean, this is the whole influencer thing, right? And these direct deals — if you think about some of the bigger podcasters, I just interviewed the guys from, I think it was TBPM, the guys who got sold for a crazy amount of money to OpenAI. They've taken an F1, NASCAR — they have logos, they talk about the products they use and why. It does feel somewhat authentic, and they're able to bust out of the CPM. The CPM downward spiral is places like the trading desk or firms will go searching for that customer and find the least expensive place to find it, and it puts downward pressure on CPMs, which is good for advertisers, bad for the content creators. So finding a more strategic, thoughtful deal where you talk about stuff you use, you can get, quite frankly, much higher CPMs, and the brand likes it and you like it. I do think you're seeing a pretty significant flow out of cable news, magazines — well, that's probably already over — even local news into podcasting because this is where the audience is going. For us, it's multiple revenue streams. It's advertising, it's subscription revenue via our Substack, and it's these direct deals, which I'm actually really excited about because there's brands I just talk about organically, and I'm like, how do we do this in a more thoughtful way and get paid for it? We'll be right back after a quick break.
The support for the show comes from Leesa. The day-to-day of summer can be full of chaos between travel, family activities, and work commitments. It can feel like there's no time to truly unwind. That's why it's important to make your bed as comfortable as possible so you can relax and recharge. For that, check out Leesa. Leesa has a lineup of beautifully crafted mattresses tailored to how you sleep. Each mattress is designed with specific sleep positions and feel preferences in mind. Leesa mattresses are meticulously designed and assembled in the USA for exceptional quality, and they back it all up with free shipping, easy returns, and a 120-night sleep trial. Leesa has been awarded Best Hybrid and Best Memory Foam Mattresses by the New York Times Wirecutter. From the first night, you'll feel the difference. It's serious comfort with full-body support. Just take the Leesa Sleep Quiz and you'll find your perfect match in two minutes or less. Go to leesa.com for 25% off select mattresses. Plus, get an extra $50 off with promo code PROFG for our listeners. That's leesa.com. Promo code PROFG for 25% off select mattresses plus an extra $50 off. And when you use our code, you're supporting our show. That's leesa.com promo code PROFG.
Support for the show comes from IM8. You shouldn't need a personal assistant just to keep track of your supplements. IM8 is the way to simplify your supplement routine once and for all. IM8's Daily Ultimate Essentials has 16 supplements in one drink for $2.61 a day. That's 90 ingredients working across nine major organ systems, all in a single drink. Co-founded by David Beckham and built by leading doctors and researchers, IM8 was designed by the world's best. Ed actually tried and likes IM8. Ed, what are your thoughts?
