Everyone believes their source is the “good source”.

Photo: Everyone believes their source is the “good source”.

At Louisiana State University, students can choose between indoor rock climbing walls, inflatable obstacle courses or a float down a 536 foot-long lazy river that snakes through a winding pool built in the shape of the letters L-S-U. The university's initials.

LSU’s waterpark is just one of many bids universities have made to compete in the $672 billion post secondary education industry. To provide context, if American post secondary education was a country, it would have the 23 largest GDP in the world, ahead of Sweden, Thailand, Argentina, South Africa and 168 others.

With tuition often reaching $60,000 per year, post secondary education is now the first luxury experience that many Americans purchase. Universities are aware of this, and are aggressively building country club style accommodations for their prospective customers.

At the ribbon cutting for the $85 million lazy river, LSU’s President stated: “We’re here to give you everything you need, whatever we need to do to keep you here.”

The water park was funded with student tuition, and when asked to defend the investment, the school administrators stated: “The students voted for it.”

Let me translate: “The customer is always right.”

The supply of diplomas has outpaced demand and many universities have lost their utility - what used to be a path to a high paying job. But since student loans are still cheap and readily accessible, universities are thinking outside the box to fill their customer - sorry, student, pipeline.

The students want an amusement park? Build them an amusement park. In the name of career development, of course.

If universities losing touch with their original value proposition is a threat, this is compounded by their reliance on one of the most vulnerable bubbles in the world - student loan debt.

Universities are supported by a $1.75 trillion student loan bubble with a rapidly growing default rate. Washington Think Tank, the Brookings Institution, estimates the default rate will climb to 41% within the next two years (roughly $717 billion in delinquent debt).

So, what happens in this scenario?

Whether or not the hundreds of billions in delinquent loans are forgiven, the flow of money is no longer sustainable. It will dry up.

The signs all point to a beautiful implosion:

1. The industry has lost its direction

2. The public is losing trust in the value

3. The revenue model is becoming compromised

I watch the education system from a distance. My boys are too young for me to have a horse in this race. But I see parallel problems in an industry that I am very excited about.


Journalism was the business of gathering and distributing the news. Today it is the business of attracting eyeballs to ads.

According to Edelman’s Trust Barometer, for the first time ever, fewer than half of all Americans have trust in traditional media, “56% believe that journalists and reporters are purposely trying to mislead people by saying things they know are false or gross exaggerations.”

In addition, responding to growing partisan divides has forced the media to “pick a team”, or be demonized as an ‘opposition sympathizer’.

But it turns out that people are smart - and as a consequence, 58% of the public now believe that most news organizations are more concerned with supporting a political agenda than with informing the public.

There is well written, intelligently argued journalism for every thinkable ideology - complete with supportive statistics. It’s no wonder that I have close friends on each side of today’s most hot button issues, completely resolute in their belief that anyone who disagrees with them must be a conspiracy theorist.

Everyone believes their source is the “good source”.

I have interviewed over 300 money managers in the last two years. All have achieved outsized success compared to the industry. I have sat with absolute titans such as David Rubenstein, the founder of the Carlyle Group, with over $300 billion in assets under management, Dr. Lacy Hunt, one of the world's most respected economists, and the 22nd Prime Minister of Canada who led the country through the 2008 financial crisis, Stephen Harper.

After hundreds of conversations I can say two things: No one agrees, and everyone thinks that they are right.

There is, however, a negative correlation between confidence and experience - those who are the most accomplished are also the least confident in their understanding of the world. It’s interesting, you might expect the opposite. But, in my experience those who are unshakeable in their belief are typically the least qualified to have an opinion.

Journalism is facing the same issues as education - Universities intended to educate, but now they must entertain to stay relevant. Journalists intended to inform, but now they must seduce their readers by giving them more of what they want instead of what is true.

Both are examples of dying corporate models. Their time has passed, but they will not go quietly. Through waterslide parks or sensationally false news, they will both die fighting for one more minute of your attention before fading into the history books.

This creates a once in a generation opportunity for new models to be born and take over the lost territory. I believe we are entering the new golden age for independent journalism. The public is starving for information as we navigate unprecedented volatility, but there are few platforms that can inform with trust.

Independent journalism will rule the day.

It may be time to raise your voice. Integrity and legitimate research have become novelties. All one needs to do to stand out is be authentic. You will not win over everybody, nor should you try.

If you love obsessing over current events in money and economics, or trends in culture and politics - I might have a place for you. Let’s talk.