I'm highly skeptical of big tech valuations but comparing "fat margins" at MSFT, GOOGL, AMZN etc. companies enjoying network effects, scale, scope and regulatory capture to an obscure Australian flight booking website... Is a bit of a reach.
If anything your argument may be turned on its head and you may find that these companies will be able to maintain market dominance with much lower costs due to AI, actually boosting their margins.
I'd also add that a lot of the industries you're mentioning as having left, were *intentionally* offshored because the workforce got too educated. Highly-trained labour will naturally seek the highest value-add industries for the highest financial reward.
For example: TSMC might make the semiconductors but they're almost exclusively designed here. The machines that make them? Also designed in the West. Oil and gas fields in Africa/Asia? Try getting one running without Halliburton and Baker Hughes.
We moved up the value chain because our labour force became the best-trained in the world.
Commodities remain criminally undervalued but if the pendulum swings you'll find a lot of that production will come back home real quick.
I think you dont take into account that AI-based products have the potential to boost productivity in many sectors. The question 'who owns AI' is hard to answer at this point. The best talents are flocking around FANG (the median income for a developer at Google is 280k!, German engineering firms pay you 60-80k maybe + you get taxed the shit out of you).
Hi Ferg, regarding AI I watched this today and sharing with you and others if interested. Not for an investment angle other than requiring further demand on energy but the scope and development ahead warrants paying attention to this largely unknown space. As a parent, an investor, our health, education...mind blowing, the good, bad and the ugly. Reminds me to have a look again at the sector you were/are shorting. The earlier we learn and adapt the better because change is inevitable, what investment opportunities will arise is something for further thought.
How AI Will DISRUPT The Entire World In 3 Years (Prepare Now While Others Panic) | Emad Mostaque (warning...it's a long recording).
Shorting was in reference to the call with Robert Mullin on data centers and in Fergs Jul.23 weekly email. Not related to the AI will disrupt video with Emad.
I'm highly skeptical of big tech valuations but comparing "fat margins" at MSFT, GOOGL, AMZN etc. companies enjoying network effects, scale, scope and regulatory capture to an obscure Australian flight booking website... Is a bit of a reach.
If anything your argument may be turned on its head and you may find that these companies will be able to maintain market dominance with much lower costs due to AI, actually boosting their margins.
I'd also add that a lot of the industries you're mentioning as having left, were *intentionally* offshored because the workforce got too educated. Highly-trained labour will naturally seek the highest value-add industries for the highest financial reward.
For example: TSMC might make the semiconductors but they're almost exclusively designed here. The machines that make them? Also designed in the West. Oil and gas fields in Africa/Asia? Try getting one running without Halliburton and Baker Hughes.
We moved up the value chain because our labour force became the best-trained in the world.
Commodities remain criminally undervalued but if the pendulum swings you'll find a lot of that production will come back home real quick.
I have to chuckle a bit when the once august publication Bloomberg writes out "Climate Crisis" and that it's "getting hotter by the day".
I remember a time when statements like that were flagged by the editorial staff - as they needed to be proven. Now it's all narrative.
If that's how they'll play it, then the positioning you're talking about here has a nice strong tailwind.
Great links as always TF.
I think you dont take into account that AI-based products have the potential to boost productivity in many sectors. The question 'who owns AI' is hard to answer at this point. The best talents are flocking around FANG (the median income for a developer at Google is 280k!, German engineering firms pay you 60-80k maybe + you get taxed the shit out of you).
+ you have tons of retail investors who dont know anything but tech companies to invest in. I think the trend can continue for longer than we think
Hi Ferg, regarding AI I watched this today and sharing with you and others if interested. Not for an investment angle other than requiring further demand on energy but the scope and development ahead warrants paying attention to this largely unknown space. As a parent, an investor, our health, education...mind blowing, the good, bad and the ugly. Reminds me to have a look again at the sector you were/are shorting. The earlier we learn and adapt the better because change is inevitable, what investment opportunities will arise is something for further thought.
How AI Will DISRUPT The Entire World In 3 Years (Prepare Now While Others Panic) | Emad Mostaque (warning...it's a long recording).
https://www.youtube.com/watch?v=Se91Pn3xxSs
You want to say that AI is a short or it isn't (don't have time to watch the video
Shorting was in reference to the call with Robert Mullin on data centers and in Fergs Jul.23 weekly email. Not related to the AI will disrupt video with Emad.
Nice finds, Ferg.
Similar to how we're set to use record oil...the EIA just stated that coal demand will remain at record levels for 2023.
https://www.iea.org/news/global-coal-demand-set-to-remain-at-record-levels-in-2023