The speaker discussed how narcissists manipulate others by creating a shared fantasy that isolates victims from reality and social connections, undermining their self-worth and trust in themselves. This manipulation involves projective identification where the narcissist projects their internalized negative traits onto the victim, leading to feelings of unlovability and existential loneliness. The speaker also touched on the differences between narcissism and psychosis, and introduced the concept of malignant narcissists who combine narcissism with psychopathy and sadism, emphasizing the complex psychological impact on victims.