Capitalogix

Nvidia Joins The Trillionaire Club

Believe it or not, Nvidia is now worth nearly as much as Amazon. America’s largest semiconductor company has skyrocketed past the $1 trillion market cap mark and joined the likes of Apple, Amazon, and Microsoft. 

via visualcapitalist

My Thoughts

Nvidia’s growth is largely built on the back of the AI hype. It is also a mainstay of technology, benefitting a litany of AI projects, gaming systems, crypto mining, and more. 

But, the question is whether it will continue to rise in popularity – or see a “correction” to pre-hype levels. I think the reality is you’ll see both happen.

Despite my obvious bullishness on AI as a market mover and industry transformer, after a hype cycle comes a trough of disillusionment. The media attention on AI will diminish again. Meanwhile, tech giants like Google and Apple rely on the technology, and Nvidia has also launched new products spanning from robotics to gaming. So, as the hype dies down, its mainstream uses will increase. 

These chips will only continue to be more important. We saw the company’s stock rise and fall during the peak of inflated expectations of cryptocurrency, but AI’s staying power - I believe - is inevitable. 

So, while it may not be a good investment in the short term, it’s a technology you can count on to be essential for decades. 

Musk vs. Zuckerberg: Fight Of The Century

In today’s “Truth is Stranger than Fiction” episode, Elon Musk and Mark Zuckerberg seem to be discussing a "cage match." But, for those of us who have been around awhile, we remember the first real billionaire fight when Herb Kelleher, co-founder of Southwest Airlines, settled a business dispute with a rival by arm wrestling in front of an audience at an arena, in an event dubbed “Malice in Dallas.” 

This supposed cage fight started because Elon responded to someone on Twitter saying, “I’m up for a cage match if he is lol” to which Zuckerberg posted an Instagram story saying, “Send Me Location.”

Supposedly, there’s a real chance they do it, and talks they may do it in Vegas.  

Now, their beef isn’t new. Back in 2016, Musk’s SpaceX was contracted to shuttle a satellite into orbit for Facebook. During a routine test, an explosion on the ground caused the satellite to be destroyed, and Zuck to say, “I’m deeply disappointed to hear that SpaceX’s launch failure destroyed our satellite that would have provided connectivity to so many entrepreneurs and everyone else across the continent.”

Ever since, they’ve been going at it. They take different stances on AI. They’ve gotten off each other’s platforms, etc. 

So ... who do you think will win?

Here Are Some Links For Your Weekly Reading - June 25th, 2023

Here are some of the posts that caught my eye recently. Hope you find something interesting.

Lighter Links:

• Who Will Pay for Titan Submersible's Search and Rescue? The US Taxpayer. (ABCNews)
• Why “Black Mirror” is So Terrifyingly Good at Predicting the Future. (BigThink)
• Suddenly, It Looks Like We're in a Golden Age for Medicine. (NYT)
• Amazon's Vision: An AI Model for Everything. (Semafor)
• From “Heavy Purchasers” of Pregnancy Tests to the Depression-Prone: We Found 650,000 Ways Advertisers Label You. (TheMarkup)

 

Trading Links:

• ChatGPT Probably Won't Help You Beat the Stock Market—But It Can Assist Investors in Other Ways, Says CFP. (CNBC)
• How Much Money Exists on Earth? Visualizing the Global Distribution of Total Wealth. (Genuineimpact)
• BofA Says Investors Are Fleeing Tech Stocks After 'Baby Bubble'. (Bloomberg)
• Dalio, Billionaire Investors Are Saying Something Big About AI. (TheStreet)
• 'Black Swan' Author Nassim Taleb Warned About the Stock Market's Brewing AI Bubble in a New Interview. Here are the 8 Best Quotes. (Markets)

Happy Father's Day 2023

This year, Father's Day was smaller than usual.  My wife, Jennifer, is in Indonesia, and my older son is on the west coast. 

Meanwhile, my younger son, Zach, took me to one of our favorite Asian restaurants with his new Fiancée, Sloane. 

I've been calling her my daughter-in-law since he brought her home (because some things are inevitable and easy to recognize). 

Reflecting on the past year, I'm grateful for my granddaughter (from my married son, Ben, and his wife).  And, I'm also grateful that Zach and Sloane got engaged and started to plan the rest of their lives together (and hopefully more grandchildren for me). 

As a father, having great kids is a double blessing.  On one hand, it's nice to be proud of who your kids are and the things they do.  On the other hand, it's also nice to feel proud of the small part you played in helping them become who they are.  

Of course, I also look back ... and spent some time thinking about my father and his terrific influence on so many lives.  

My Dad believed in setting high standards.  He explained that most people's lives are defined by their minimum standards.  Why?  Because once those standards are met, it is easy to get distracted by other things (and figuring out how to meet the minimum standards for them as well).

He was also my best friend. 

I see so much of him in myself, and in my children, and many of the aphorisms I teach come from him.  I'm grateful that I can still see his impact on the world. 

Hope you had a nice Father's Day weekend too. 

Here Are Some Links For Your Weekly Reading - June 18th, 2023

Here are some of the posts that caught my eye recently. Hope you find something interesting.

Lighter Links:

• Elon Musk Asks: 'If I'm So Smart, Why Did I Pay So Much for Twitter?'. (Insider)
• GitHub CEO Says Copilot Will Write 80% of Code “Sooner Than Later”. (FreeThink)
• Mercedes is Adding ChatGPT to Its Infotainment System, for Some Reason.(TechCrunch)
• Virgin Galactic Sets Dates for 1st Commercial Space Flights — And the Fares are Wild.(ThePointsGuy)
• Take a Look at the World's First 'Wellbeing Zone' for Economy Passengers on the Planes that Will Fly Nonstop for 22 Hours From London to Australia. (Insider)

 

Trading Links:

• Is the AI Stock Boom a Dot-Com-Style Bubble? David Rosenberg, Jeremy Siegel, and 5 Other Experts Weigh In. (Markets)
• The Number of Tech Unicorns Fell 40% in 2022 | Global Startup Ecosystem Report. (VentureBeat)
• Charted: The Rapid Decline of Global Birth Rates. (VisualCapitalist)
• BlackRock Entering the Crypto Space Through Bitcoin ETF Route Should Be Taken 'Very Seriously,' Says Analyst. (Benzinga)
• Forget the Fed—China is Gearing up to ‘Rip in Trillions of Dollars' as the Price of Bitcoin, Ethereum, BNB, XRP, Cardano, Dogecoin, Tron, Polygon and Solana Swing. (Forbes)

Where Gen Z Gets Financial Advice ...

I recently hired a new research assistant and brought her to a conference where I gave two speeches and a breakout session.

After I spoke, I asked her what she thought, and her answer surprised me. 

She said there were many opportunities for improvement, and she didn't know why I wasn't already doing it. 

She said I ignored the young people in the room ... And that my material, language, and attention were targeted toward older people (like me).

As annoying as it was - she had a point.

Take a look at this survey from Vericast. 

via Vericast

OK, it is just a survey - still, that's staggering information. 

The younger generation is getting advice from places like TikTok and YouTube (decidedly not The Economist, Wall Street Journal, Bloomberg, or even LinkedIn).

While I am on LinkedIn, Facebook, Instagram, YouTube (and even TikTok), those are not places I would search for detailed financial advice. 

However, social media is a great place to start conversations - or to gain some perspective or context.  It is even a good place to figure out some questions to get you thinking about your future better.

The wisdom of the crowd is good.  But expert advice is considered "expert" for a reason.  And, often, it makes sense to seek it out specifically. 

I doubt I'm currently reaching many Gen Z'ers ... but if you're reading this ... please expand your sources for getting financial advice beyond TikTok and YouTube.

For the older crowd ... I have found it hard enough to change myself, so I don't often expect to change others.  With that in mind, it may be time to adjust your communication strategy to include TikTok and YouTube.  If you can't change them, you might as well meet them where they are.

I just launched a TikTok channel called BotheringMyBoss. It's run by that research assistant. It's a bit outside of my comfort zone.  But, hopefully, it opens a communication channel with a younger audience.

Let me know what you think.

Understanding A Billion Dollars: A Sense Of Scale

Humans are notoriously bad at large numbers.  It's hard to wrap our minds around something of that scale.  We're wired to think locally and linearly, not exponentially (it's one of the reasons I love AI so much).  Here are a couple of ways to help you understand a billion dollars. 

via AskOpinion

First, let's look at spending over time.  If you were to spend a dollar every second for an entire day, you would spend $86,400 per day.  If you have a million dollars, you can do that for approximately twelve days.  With a billion dollars, you can do that for over 31 years.  Ignoring the difference between net worth and cash, Jeff Bezos could spend $9M per day for over 31 years.

If you make $100k a year, you can earn $1 million in 10 years.  At the same rate, it would take you 10,000 years to make $1 billion.

For another example, let's think about spending money.  Imagine making $50k a year as the base, and imagine buying a laptop, a car, or a house.  Now we're going to shrink the cost of those items, instead of increasing your pay.  If you were a millionaire, a laptop might cost the equivalent of $100 dollars, a Porsche, $3,000 dollars, a house, $25,000.  Now, let's say you're Mike Bloomberg and you're worth $60B.  A laptop is literally worth pennies, a Porsche is less than 60 cents, and your mansion would cost around 500 dollars.  You could have everything you ever wanted for a minute fraction of your wealth. 

Okay, last one before I show a video ... 

Let's try explaining it through time.  50,000 seconds is just under 14 hours.  A million seconds was 11 days ago.  A billion seconds ago from today?  1988.  Pretty crazy. 

Here's a video from the 1970s that helps you understand scale through the power of tens, and an exploration of our universe. 

Eames Office via BetterExplained

Hopefully, that was helpful!

Now that you have this context, Forbes keeps a real-time list of Billionaire's valuations based on the trading data from the previous day. 

As I type this, Elon beats out Bernard Arnault (and family) by about 9 billion, coming in at a whopping $226.4B. 

Here Are Some Links For Your Weekly Reading - June 11th, 2023

Here are some of the posts that caught my eye recently. Hope you find something interesting.

Lighter Links:

• Apple Reboots the Steve Jobs Reality Distortion Field. (Mashable)
• Who Wants to Live Forever? (Pocket)
• Why Humans are Surprisingly Bad at Being Happy. (BigThink)
• How to Hire a Pop Star for Your Private Party. (NewYorker)
• Singapore Identifies Six Generative AI Risks, Sets up Foundation to Guide Adoption. (ZDNet)

 

Trading Links:

• Walmart Reclaims Top Spot From Amazon Among Retailers. (Forbes)
• What All the Single Ladies (And Men) Say About the Economy. (NYT)
• The Next Crisis Will Start With Empty Office Buildings. (The Atlantic)
• US to Give Away Free Lighthouses as GPS Makes Them Unnecessary. (TheGuardian)
• Marc Andreessen: The Single Greatest Risk of NOT Pursuing AI. (FreeThink)

A Tech CEO's Thoughts on the SEC, Binance, and Coinbase

Late last year, the FTX exchange collapsed.  During the collapse, there was evidence of a Ponzi scheme, overleveraging, and solvency issues.  Before it crashed, it was the third-largest cryptocurrency exchange with over a million users.  FTX's collapse shook the volatile crypto market, which lost billions at the time, falling below a $1 trillion valuation, and supposedly millions of coins were stolen during the downfall.

This was a massive hit for the mainstream adoption of cryptocurrency.  Since then, crypto has been slowly fighting its way forward - and I know many people with interesting opportunities and ventures planned for this space. 

Meanwhile, the SEC sued Coinbase, this past week, for potentially operating an unregistered securities platform and brokerage service.  The SEC alleged that Coinbase made billions as the middleman between buyers and sellers without giving investors the lawful protections they should as a broker.  That lawsuit came only a day after the SEC filed charges against the largest crypto exchange, Binance, for misusing investor funds, operating as an unregistered exchange, and violating many U.S. securities laws. 

Here's a quote from Binance's CCO (recorded in the SEC complaint)

“We are operating as a f*king unlicensed securities exchange in the USA bro.”

It is no surprise that Coinbase's stock price plunged almost 20% due to the news.

I don't want to bog you down with the details of the various cases, but ultimately, Binance was supposed to split their business so that their U.S. company would be subject to U.S. regulations and legally allowed to be an exchange in the U.S. But, instead, there was an improper "comingling" of funds.  Binance subverted its controls to allow certain high-value customers to continue trading on the non-U.S.  platform.  

So, this begs the question ... what does this all mean for cryptocurrencies, exchanges, and the stakeholders?

My Thoughts

These recent enforcement actions suggest that the SEC will target firms it sees as bypassing regulation (either by blurring the distinction between on-and-offshore services or by trading unregulated securities).

This also comes on the back of the various bank collapses in March of this year. 

It's clear that regulators are worried about the security of the American taxpayers' money.  Both the FDIC and SEC are cracking down. 

Just like with the banking issues before, the issues we're dealing with here shouldn't be particularly surprising if you have been paying attention.  We're getting mixed messages on how involved and regulated the government wants these securities to be.  

Are more regulations required to ensure trust in the American financial system?  Or is this a free market where pain and pleasure point out the evolutionary path?

Finally, there's an even more fundamental question ... are cryptocurrencies truly something new (which requires a unique regulatory approach), or are they simply a new medium of pre-existing financial instruments that the SEC already has rules and regulations for?

Initially, some of the attractive aspects of cryptocurrency were its decentralized nature and its potential to have its own rules and regulations separate from a national governing body. 

On the other hand, we've seen what happened in the past when other alternative investments, like Hedge Funds, were unregulated. 

Currently, two roads are available to cryptocurrency as an industry - and perhaps it can take both.  First, it can become subject to all the regulations of its predecessors and become a mainstream and stable option for the masses.  Or, it can remain a "fringe" option that subverts the governing bodies around it, forcing its relatively small group of loyalists to deal with the uncertainty and volatility – but maintain the autonomy it can. 

What do you think will happen?

Is It The News Or Propaganda?

There is nothing wrong with your television.  We will control all that you see and hear. We can deluge you with a thousand channels or expand one single image to crystal clarity and beyond. We can shape your vision to anything our imagination can conceive.  Enjoy ....

 
The original, from The Outer Limits TV show was: 

There is nothing wrong with your television set. Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical. We can roll the image; make it flutter. We can change the focus to a soft blur or sharpen it to crystal clarity. For the next hour, sit quietly and we will control all that you see and hear. We repeat: there is nothing wrong with your television set. You are about to participate in a great adventure. You are about to experience the awe and mystery which reaches from the inner mind to the outer limits.

As a society, we're fairly vulnerable to groupthink, advertisements, and confirmation bias. 

We believe what we want to believe, so it can be very hard to change a belief, even in the face of contrary evidence. 

Since the past election cycle, we've seen a massive uptick in distrust toward news agencies, big companies, the government, and basically anyone with a particularly large reach. 

To a certain degree, this is understandable and justified. Here is an example of the power of the media focused on a message.  Click to watch.

 

via Courier News

Propaganda has always been an issue, and almost everyone does it; governments, companies, etc. Luckily, it's easier to see today than in the past, but unluckily it's also more pervasive and insidious than before. 

It's to the point where if you watch the news you're misinformed, and if you don't watch the news you're uninformed. 

The above segment portrays a rosy picture of Amazon's efforts to protect its workers while delivering essentials to the struggling homebound masses. This comes while Amazon has come under massive fire for removing some of its protections. 

Honestly, I use Amazon and, in my opinion, this isn't a massive breach of trust. News stations have a lot of time to fill, they often have sponsored content.

That being said, it's something to be cognizant of - not necessarily offended by.

Personally, I believe I am reasonably aware and somewhat immune from propaganda. That probably isn't as true as I'd like to believe.

It used to be true that winners wrote history (think empires, wars, etc.). Now, the one that delivers the most broadcast narratives shapes the emotional and seemingly logical responses to what we perceive to be happening around us.

The result impacts elections, financial markets, buying choices, and countless other areas of our life. 

As A.I., Bots, and social media grow, our ability to discern truth from 'truthiness' weakens. It's becoming even more of an issue with AI-based depictions of presidents in both image and video.

It's a great reminder that what you're seeing and hearing is carefully manufactured, and hopefully, it encourages you to get outside your bubble. 

I think one of the worst consequences of the past few years is the unwillingness of mass swaths of Americans to listen to voices they disagree with. The internet has already created echo chambers, but it's being exacerbated by vitriol. As a result, I think we're seeing the fringe of both parties move further away from the middle. 

What do you think?