New York and Hawaii top the list with 12% and 11.8% respectively. Alaska ends the list with 4.9%, followed by New Hampshire with 5.6%.
Alaskans don't pay state income tax, but neither do Florida, Nevada, South Dakota, Tennessee, Texas, Washington, or Wyoming. So, if you're trying to avoid taxes, they all sound like better bets.
New Hampshire still has a better state tax burden than any of them despite its 4% flat tax on interest and dividend income.
If you don't like paying taxes (and don't mind the cold), then Alaska might be worth the winters?
Meanwhile, we hear a lot about the exodus from California, but not from New York or Maine. Maybe it's the people … or maybe it's their Governor?
A few years ago, I shared a presentation called Mindset Matters that I had given to a small mastermind group.
This past week, I revisited that content in a different group.
One of my core beliefs is that energy is one of the most important things we can measure. I believe it so strongly I paid Gaping Void to put it on my wall.
It means exactly what it sounds like – but also a lot more.
Energy affects how you feel, what you do, and what you make it mean. That means it is a great way to measure your values too. Consequently, even if you don’t recognize it, energy has a lot to do with who you hire and fire. It affects where you spend your time. Ultimately, it even affects the long-term vision of our company. If something brings profit and energy, it is probably worth pursuing.
In contrast, fighting your energy is one of the quickest ways to burn out. Figuring out who and what to say “no” to is a crucial part of making sure you stay on the path and reach your goals.
I believe that words have power. Specifically, the words you use to describe your identity and your priorities change your reality.
First, some background. Your Roles and Goals are nouns. That means “a person, place, or thing.” Let's examine some sample roles (like father, entrepreneur, visionary, etc.) and goals (like amplified intelligence, autonomous platform, and sustainable edge). As expected, they are all nouns.
Next, we’ll examine your default strategies. You use these in order to create or be the things you want. The strategies you use are verbs. That means they define an action you take. Action words include: connect, communicate, contribute, collaborate, protect, serve, evaluate, curate, share … and love. On the other end of the spectrum, you could complain, retreat, blame, or block.
People have habitual strategies. I often say happy people find ways to be happy – while frustrated people find ways to be frustrated. This is true for many things.
Seen a different way, people expect and trust that you will act according to how they perceive you.
Meanwhile, you are the most important perceiver.
Another distinction worth making is that the nouns and verbs we use range from timely to timeless. Timely words relate to what you are doing now. Timeless words are chunked higher and relate to what you have done, what you are doing, and what you will do.
The trick is to chunk high enough that you are focused on words that link your timeless Roles, Goals, and Strategies. When done right, you know that these are a part of what makes you … “You”.
My favorite way to do this is through three-word strategies.
These work for your business, priorities, identity, and more.
I’ll introduce the idea to you by sharing my own to start.
Understand. Challenge. Transform.
The actual words are less important than what they mean to me.
What’s also important is that not only do these words mean something to me, but I’ve put them in a specific order, and I’ve made these words “commands” in my life. They’re specific, measurable, and actionable. They remind me what to do. They give me direction. And, together, they are a strategy (or process) that creates a reliable result.
First, I understand, because I want to make sure I consider the big picture and the possible paths from where I am to the bigger future possibility that I want. Then, I challenge situations, people, norms, and more. I don’t challenge to tear down. I challenge to find strengths … to figure out what to trust and rely upon. Finally, I transform things to make them better. Insanity is doing what you always do and expecting a different result. This is about finding where small shifts create massive consequences. It is about committing to the result rather than how we have done things till now.
If I challenged before I knew the situation, or I tried to transform something without properly doing my research, I’d risk causing more damage than good.
Likewise, imagine the life of someone who protects, serves, and loves. Compare that to the life of someone who loves, serves, and protects. The order matters!
There is an art and a science to it. But it starts by taking the first step. Try to find your three words.
I’ve set daily alarms on my phone to remind me of these words. I use them when I’m in meetings, and they’re used to evaluate whether I’m showing up as my best self.
You can also create three words that are different for the different hats you wear, the products in your business, or how your team collaborates.
Like recipes, your words should have ingredients, orders, and intensities. As you use your words more, the intensities might change. For example, when my son was just getting out of college, one of his words was contented because he was focused on all the things he missed from college – instead of being appreciative of the things he had. Later, his words switched to grateful and then loving. Evolutions that paired with his personal journeys and represented stronger actions.
Realize that we create what we want by doing. As such, choose words that inform or spark the right actions. You can see that in my son’s words. As he grew, he became more comfortable actively prompting the actions he wanted to approach life with, instead of just passively hoping for a feeling.
You can apply these simple three-word strategies almost everywhere once you learn how to create them.
The problem with history is it rarely tells the whole story.
Ideally, history would be presented objectively, recounting facts without the influence of societal bias, the perspective of the victor, or the storyteller's slant. But achieving this is harder than it seems.
Think about your daily life – it is filled with many seemingly innocuous judgments about your perception of the economy, what's happening in the markets, who is a hero, who deserves punishment, and whether an action is "Just" or "Wrong".
I'm often surprised by how frequently intelligent people violently disagree on issues that seem clear-cut to them.
It's like a fish in water not realizing it's in water … Most people don't realize the inherent biases and filters that inform their sense of the world or reality.
This post is an attempt to highlight the importance of diverse perspectives and information sources in building well-informed viewpoints.
Even though most people would agree that genuinely understanding history requires a clear picture, free from bias … I think it's apparent that history (as we know it) is subjective. The narrative shifts to support the needs of the society reporting it.
The Cold War is a great example where: during the war, immediately after the war, and today, the interpretation of the causes and events has changed.
But while that's one example, to a certain degree, we can see it everywhere. We can even see it in the way events are reported today. News stations color the story based on whether they're red or blue, and the internet is quick to jump on a bandwagon even if the information is hearsay.
Now, what happens when you can literally rewrite history?
“Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped.“ – Orwell, 1984
That's one of the potential risks of deepfake technology. As it gets better, creating "supporting evidence" becomes easier for whatever narrative a government or other entity is trying to make real.
On July 20th, 1969, Neil Armstrong and Buzz Aldrin landed safely on the moon. They then returned to Earth safely as well.
MIT recently created a deepfake of a speech Nixon's speechwriter William Safire wrote during the Apollo 11 mission in case of disaster. The whole video is worth watching, but the speech starts around 4:20.
Can you imagine the real-world ripples that would have occurred if the astronauts died on that journey (or if people genuinely believed they did)? Here is a quote from the press response the Nixon-era government prepared in case of that disaster.
"Fate has ordained that the men who went to the moon to explore in peace will stay on the moon to rest in peace." – Nixon's Apollo 11 Disaster Speech
Today, alternative histories are becoming some people's realities. Why? Media disinformation is the cause and is more dangerous than ever.
Alternative history can only be called that when it's discernible from the truth, and unfortunately, we're prone to look for information that already fits our biases.
Today, we also have to increasingly consider the impacts of technology. Deepfakes are becoming more commonplace – with popstar Drake even using AI in a recent record. Now, that was apparent – but scarily, research shows that most can't tell a deepfake from reality (even if they think they can.)
As deepfakes get better, we'll also get better at detecting them, but it's a cat-and-mouse game with no end in sight.
In Signalling theory, it's the idea that signallers evolve to become better at manipulating receivers, while receivers evolve to become more resistant to manipulation. We're seeing the same thing in trading with algorithms.
In 1983, Stanislav Petrov saved the world. Petrov was the duty officer at the command center for a Russian nuclear early-warning system when the system reported that a missile had been launched from the U.S., followed by up to five more. Petrov judged the reports to be a false alarm and didn't authorize retaliation (and a potential nuclear WWIII where countless would have died).
But messaging is now getting more convincing. It's harder to tell real from fake. What happens when a world leader has a convincing enough deepfake with a convincing enough threat to another country? Will people have the wherewithal to double-check? What about when they're buffeted by these messages constantly and from every direction?
As we increasingly use AI for writing and editing, there is a growing risk of subtle changes being made to messages and communications. This widespread opportunity to manipulate information amplifies the capacity and potential for people to use these technologies to influence people's perceptions. As a result, we must be increasingly cautious about how the data we rely on may be altered, which could ultimately affect our perceptions and decisions.
Despite the risks, I'm excited about the promise and the possibilities of technology. But, as always, in search of the good (or better), we have to acknowledge and be prepared for the bad.
In 2020, I had a Zoom meeting with Matthew Piepenburg of Signals Matter. Even though it was a private discussion, there was so much value in our discussion we decided to share parts of it online.
Four years later, I still think it's a great watch.
While Matt evaluates markets based on Macro/Value investing, I'm much more interested in advanced AI and quantitative methods.
As you might expect, there are a lot of differences in how we view the world, decision-making, and the market. Nonetheless, we share a lot of common beliefs as well.
Our talk explores several interesting areas and concepts. I encourage you to watch it below.
Even though this video is four years old, the lessons remain true – markets are not the economy, and normal market dynamics have been out the window for a long time. In addition, part of why you're seeing increased volatility and noise is because there are so many interventions and artificial inputs to our market system.
While Matt and I may approach the world with very different lenses, we both believe in "timeless wisdom".
Ask yourself, What was true yesterday, today, and will stay true tomorrow?
That is part of the reason we focus on emerging technologies and constant innovation … they remain relevant.
Something we can both agree on is that if you don't know what your edge is … you don't have one.
Hope you enjoyed the video.
Let me know what other topics you'd like to hear more about.
It's a pretty damning video from someone who is frustrated with AI – but it makes several interesting points. The presenter discusses Amazon's recent foible, Google's decreasing search quality, the increase of poorly written AI-crafted articles, GPTs web-scraping scandals, and the overall generalization of responses we see as everyone uses AI everywhere.
Yanshin attributes the disparity between the actual results and the excitement surrounding AI stocks to the substantial investments from technology giants. But as most bubbles prove, money will be the catalyst for amazing things — and some amazing failures and disappointments too.
His final takeaway is that, regardless of its current state, AI is coming and will undoubtedly improve our lives.
If I were to add some perspective from someone in the industry, it would be this.
AI Is Overdelivering in Countless Ways
There will always be a gap between expectations and reality (because there will always be a gap between the hype and adoption cycles). AI is already seamlessly integrated into your life. It's the underpinning of your Smartphones, Roombas, Alexas, Maps, etc. It has also massively improved supply chain management, data analytics, and more.
That's not what gets media coverage … because it's not sexy … even if it's real.
Having created AI since arguably the mid-90s, the progress and capabilities of AI today are hard to believe. They're almost good enough to seem like science fiction.
The Tool Isn't Usually The Problem
Artificial Intelligence is not a substitute for the real thing—and it certainly can't compensate for the lack of the real thing.
I sound like a broken record, but AI is a tool, not a panacea. Misusing it, like using a shovel as a hammer, leads to disappointment. And it doesn't help if you're trying to hammer nails when you should be laying bricks.
ChatGPT is very impressive, as are many other generative AI tools. However, they're still products of the data used to train them. They won't make sure they give you factual information; they can only write their responses based on the data they have.
If you give an AI tool a general prompt, you'll likely get a general answer. Crafting precise prompts increases their utility and can create surprising results.
Even if AI independently achieves 80% of the desired outcome, it still did it without a human, a salary, or hours and days of time to create it.
Unfortunately, if you're asking the wrong questions, the answers still won't help you.
That's why it matters not only that you use the right tool but also that you use it to solve the right problem. In addition, many businesses lose sight of the issues they're solving because they get distracted by bright and shiny new opportunities.
Conclusion
Sifting the wheat from the chaff has become more complicated — and not just in AI. Figuring out what news is real, who to trust, and what companies won't misuse your data seems like it has almost become a full-time job.
If you take the time, you will see a lot of exciting progress.
Public perception is likely to trend downward in the next news cycle, which is to be expected. After the peak of inflated expectations comes the trough of disillusionment.
Regardless, AI will continue to become more capable, ubiquitous, and autonomous. The question is only how long until it affects your business and industry.
On one hand, I try not to think about or predict markets (because I recognize the futility of trying to predict something random to me). On the other hand, it is an election year, and my opinion matters as a proxy for what people like me think or feel in an election year. So, with that in mind, I expected to see a brief market correction blamed on various geopolitical instabilities and partisan weaknesses, followed by a long and steady push higher as we approach the November elections.
What do you think? Is the market's move downwards the start of something bigger, or is it just a temporary correction before a push higher into November?
Not to mention, for the past few years, the top 20 stocks have contributed almost exclusively to the success of the S&P 500. In 2023, the top 20 stocks drove 7.08% of the 7.55% return.
Those stocks are almost exclusively AI & Tech Stocks.
Often, people look to the S&P as a sign of the economy, but this is a helpful reminder that markets are not the economy.
As we look at the S&P, it's also interesting to look at the top stocks over the past 40 years. Visual Capitalist compiled a chart that ranks the top S&P 500 stocks by calendar year returns.
Qualcomm's 2620% return in 1999 is hard to imagine, especially with Tesla's 743% percent growth from 2020 being a distant 2nd place.
In case you were wondering, Qualcomm's growth in 1999 was primarily driven by patents for Code Division Multiple Access (CDMA) technology, which was the infrastructure for "fast" wireless internet access and the 3G network.
Amazon's 'Just Walk Out' technology has revolutionized shopping convenience, but whispers suggest there might be more to it than meets the eye…
For years, shoppers have been able to walk into one of their Amazon Fresh grocery stores, walk out, and never have to talk to a single person, or even check out.
This feat was supposedly made possible solely using machine intelligence.
Just Walk Out technology is made possible by artificial intelligence like computer vision and deep learning techniques, including generative AI, to accurately determine who took what in any retail environment. Amazon built synthetic datasets to mimic millions of realistic shopping scenarios – including variations in store format, lighting conditions, and even crowds of shoppers – to ensure accuracy in any environment. – via an Amazon Spokesperson
Along with that announcement came rumors that the technology only worked due to a team of 1000 out of India. Apparently, this team was required to verify orders and correct the technology when it missed items.
On the one hand, that seems like a classic case of overpromising and underdelivering, but it's also very common. Many public-facing AI systems rely on human moderators and data labelers.
So why is Amazon being flogged in the media?
The problem for me is two-fold.
First, Artificial Intelligence is at the peak of inflated expectations on Gartner's Hype Cycle. That means the average user has high hopes and is being disappointed. It also means the average user is likely overwhelmed with apps and technologies that fail to deliver on their promises.
Second, transparency is the name of the game, especially in a black-box situation like most AI. The technology Amazon is creating is impressive—but they're also Amazon. Eyes are on them to be leaders, so when they fall short, it's a chance for naysayers to pile on.
Public perception is likely to trend downward in the next news cycle, which is to be expected. After the peak of inflated expectations comes the trough of disillusionment.
Regardless, AI will continue to become more capable, ubiquitous, and autonomous. The question is only how long until it affects your business and industry.
While Amazon has "walked out" on that technology in its stores, it's not time to "walk out" on AI just yet. Numerous stores still use that or similar technologies.
Population growth is an interesting measure. Historically, growth has been slow … but something changed that, and the implications are stunning.
Scientists estimate that humans have existed for over 130,000 years.
It wasn’t until 1804 that the world’s population reached 1 billion. The population doubled once more by 1927, 123 years later, and then again by 1974, a mere 47 years later.
The Agricultural Revolution spurred early population growth. Subsequently, since 1804, the Industrial Revolution, alongside new technologies and advancements in health and safety, has dramatically enhanced the quality of life and accelerated population growth.
The global population continues to expand as more women are giving birth, despite the statistical trend of each woman having fewer children. Here is a chart showing that.
World population growth rates peaked in the late 1960s and have declined sharply in the past four decades. Nonetheless, world population figures continue to grow. We’re expected to reach 9 billion people by 2050, but a lot of that growth comes from developing countries—it also almost exclusively comes from urban areas.
Urbanization: Megacities
Here is another trend worth noting. Since 2014, over 50% of the world’s population has lived in urban areas – today it’s approximately 55%. That number is growing.
Ironically, as we grow more digitally connected, our world is shrinking, and our populations are concentrating.
An interesting consequence of this rapid urbanization and population growth in developing countries has been the increased development of Megacities – defined as cities with populations greater than 10 million. Today, there are 33 megacities – more than triple the number in the 1990s.
This creates a set of interesting opportunities and challenges. For example, how will these cities deal with infrastructure (e.g., sanitation, transportation, etc.)?
As information and money become increasingly decentralized, and it becomes easier and easier to trade and communicate globally, it’s interesting to see a centralization of the population.
This post considers the “Chart of the Century” created and named by Mark Perry, an economics professor and AEI scholar. This chart has received considerable attention because it contains extensive information about the challenges faced by the Fed and other Washington policymakers.
The most current version reports price increases from 1998 through the end of 2023 for 14 categories of goods and services, along with the average wage and overall Consumer Price Index.
It shows that prices of goods subject to foreign competition — think toys and television sets — have tumbled over the past two decades as trade barriers have come down worldwide. Meanwhile, the costs of so-called non-tradeable items — hospital stays and college tuition, to name two — have surged.
From January 1998 to now, the CPI for All Items has increased by over 90% (up from 59.6% in 2019, when I first shared this chart).
Lines above the overall inflation line have become functionally more expensive over time, and lines below the overall inflation line have become functionally less expensive.
At the beginning of 2020 (when I shared the 2019 post), food, beverages, and housing were in line with inflation. They’ve now skyrocketed above inflation, which helps to explain the unease many households are feeling right now. College tuition and hospital services have also continued to rise over the past few years—even in relation to inflation.
There are many ways to interpret this chart. You can point to items in red whose prices have exceeded inflation as government-regulated or quasi-monopolies. You can point to items in blue as daily commodities that have suffered from ubiquity, are subject to free-market forces, or are goods subject to foreign competition and trade wars.
Looking at the prices that decrease the most, they’re all technologies. New technologies almost always become less expensive as we optimize manufacturing, components become cheaper, and competition increases. From VisualCapitalist, at the turn of the century, a flat-screen TV would cost around 17% of the median income ($42,148). In the early aughts, though, prices began to fall quickly. Today, a new TV will cost less than 1% of the U.S. median income ($54,132).
Compare “tradable” goods like cell phones or TVs (with lots of competing products) to less tradable “goods” like hospital stays or college tuition, and unsurprisingly, they’ve gone in opposite directions. In 2020, I asked what the Coronavirus would do to prices, and the answer was less than expected. If you don’t look at the rise in inflation but instead the change in trajectories, very few categories were heavily affected. While hospital services have skyrocketed since 2019, they were already skyrocketing.
At this point, we’re pretty far removed from quarantine’s most extreme forces. Textbooks have come back down, as have childcare and medical care services. New cars and household furnishings have leveled out. Otherwise, the trajectories have been pretty unaffected.
We can look one step deeper if we consider average hourly income. Since 2000, overall inflation has increased by 82.4%, while average hourly income has increased by 114%. This means that hourly income increased 38% faster than prices (which indicates a 14.8% decrease in overall time prices). You get 17.3% more today for the same amount of time worked ~24 years ago.
It’s interesting to look at data like that, knowing that the average household is feeling a “crunch” right now. My guess is that few consumers distinguish between perception and reality. However, feeling a crunch isn’t necessarily the same as being in a crunch.
For instance, we must account for ‘quality of life creep,’ where people tend to splurge on luxuries as their standard of living improves. With the ease of online shopping and access to consumer credit, it’s become increasingly easy to indulge in impulse purchases, leading to reduced savings and feelings of financial scarcity. This phenomenon is a function of increased consumption (rather than inflation), yet it still leaves consumers feeling like they’re struggling to make ends meet.
Perry’s ‘Chart of the Century’ reveals the complex relationships between inflation, consumption, and economic growth. While households may feel financial strain, the data shows that income has outpaced inflation, and technology has made many goods more affordable. Nonetheless, our tendency to splurge on luxuries and increased consumption have contributed to a sense of financial struggle.
How can policymakers address the sectors experiencing significant price hikes, like healthcare and education, without stifling innovation in tradable goods and services?
How do you think these issues will impact the Election?
There has been a lot of discussion about consumer price inflation recently.
For a slightly different perspective and a longer-term view, take a look at this chart on VisualCapitalist. It shows the growth of $100 by asset class from 1970 – 2023.
I was surprised to see how little real estate grew … but I wasn't surprised by the S&P 500 number.
The real estate number is more complicated than it appears on the surface (since it factors in leverage, property taxes, insurance, and other expenses). It also factors in the housing market crash, from which home prices took over a decade to recover.
For some context, here are some key events that highlight the difference between 1970 and 2023:
Technology
1970: First microprocessor introduced
2023: Artificial intelligence, Blockchain, and Quantum Computing are rapidly advancing
Space Exploration
1970: First lunar module lands on the Moon (Apollo 11)
2023: Private companies like SpaceX and Blue Origin lead the charge in space travel and exploration
Politics and World Events
1970: Cold War and Vietnam War dominate global politics
2023: Rise of globalization, social media, and geopolitical tensions between major world powers
Economy and Business
1970: Industrial economy dominates
2023: Service-based economy and e-commerce have transformed the way we work and shop
Communication
1970: Landline phones and snail mail are the primary means of communication
2023: Smartphones, social media, and instant messaging have revolutionized the way we connect and share information
These are just a few of the many events that highlight the significant differences between 1970 and 2023.
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