Join Eric Chemi as he engages with Stephen McBride, Chief Analyst at RiskHedge, in a captivating discussion on the evolving landscape of investment strategies in the age of artificial intelligence. Stephen brings his expertise from RiskHedge, a disruption research firm, to delve into how AI is reshaping our approach to investing and the broader economic implications.
Stephen and Eric discuss the significant role of AI in altering the investment landscape, from changing the mechanics of how we invest to impacting the overall economic growth and job market. They also touch upon the future of AI in investment analysis and how it can revolutionize our approach to portfolio management.
Get Stephen’s complete A.I. Portfolio for 2024. Including what he calls the “next Nvidia” at https://www.riskhedge.com/ai-portfolio
Eric Chemi 0:00
What do you find yourself having to explain over and over again?
Stephen McBride 0:03
That AI is just going to take all the jobs. And I really do not think that’s true again, every technology in history has created more jobs and it’s destroyed.
Eric Chemi 0:18
Welcome to Wealthion. I’m Eric Chemi. Today I’m excited to bring on Steven McBride. He is the chief analyst at RiskHedge. He is looking at all kinds of things happening in the markets, especially the impact of AI, not just what we invest in, but how we invest the actual mechanics, the approach the processes that are changing, because AI is changing the way we can evaluate securities, the amount of computer power that’s available to us to make smarter decisions. And Stephen, you’re joining me from Ireland. So we got this across the Atlantic conversation happening here today. Thanks so much for spending some time with me coming on the show. And you’re much smarter than I am, right? You’re looking at AI, finance, individual stocks, big picture macro commodities. How was somebody even get to be that smart and educated in all of these different aspects of the economy?
Stephen McBride 1:12
Now Eric, I wasn’t the one that went to MIT. So I think you’re ahead of me on that one. But yeah, it’s it’s great. Great to join. And thanks so much for having me. I think the interesting thing about looking at cross asset classes cross industry is you spot patterns, or whether that’s booms and busts in certain industries, or just fast growing, you know, technology trends, which is what we love to invest in love to invest to disruption. So the world is a fascinating place super bullish on what’s going on right now. So can’t wait to talk here today?
Eric Chemi 1:43
Are you bullish? Or are you bearish? Just as a general starting place? You know, from what you’re looking at?
Stephen McBride 1:48
Yeah. So I mean, look, I have to pull up my bias, first of all, which is I’m I’m a long term optimist. Right. I think over time, things get better over time stocks go up. But right now, I’m incredibly bullish, which is not a contrarian position right now, Eric, but it was a contrarian position. Back in January, when all the Wall Street strategists were calling for the first down year, in 20 years, that was their prediction. We were incredibly bullish for a number of reasons. But it’s been a great year. And I think I think it’s going to be a great year next year for, you know, for the reasons of, of where the AI tailwind and other stuff going on.
Eric Chemi 2:27
Do you think it’s just because of AI that we’re up? I mean, a lot of people say the s&p 500, it’s seven stocks that are moving this whole thing. And if they those seven didn’t exist, if not for AI and big tech, we would be down, right? We will be legit down this here. So the analysts, if you don’t want to say let’s call it even 10 out of 500 stocks, right. So what are the 2%? The 98%? They were right, right, we were down on the 98%. But those 2% were up just so big, that they end up looking wrong, but you could make an argument that in fact, the bearish case was generally right.
Stephen McBride 3:02
So I think your best players always score the most points the most goals right, which is exactly what happened this year, the biggest stocks carried the market are certainly think AI has something to do with it. I agree. I don’t think maybe CHatGPT saves the stock market. Right. And if you look at the earnings breakdown, the contribution from Nvidia and other stocks, that’s the reason why the earnings recession is over. Having said that, although the big players did the heavy lifting. There’s a lot more than seven stocks that are up. I mean, I just looked at some stocks today that nobody even thinks of and are making all time highs.
Eric Chemi 3:38
What are some examples? What are you looking at there?
Stephen McBride 3:41
Stellantis, which which owns a it’s basically a car group of different automakers. That’s surprising. And homebuilders have been doing great. And there’s another one in Europe Lindy and it’s industrial gases. That’s being downgraded. Schofield a chemical in the uranium sector that’s making I think, a 15 year highs or something like that. So there’s there’s a lot there’s, there’s there’s tons of stuff in the in the AI space that are not, you know, trillion dollar companies that are doing well. So I actually think the biggest lie being told is that just seven stocks went up. I realize those guys are a huge percent of the s&p 500. But there’s been a lot of ways to make money this year.
Eric Chemi 4:23
That’s true, right? It’s not just seven stocks, right? Like more stocks. I don’t I don’t have it off the top of my head. Maybe you do or don’t have those 500 How many are up or down in the s&p Do you know off the top of your head?
Stephen McBride 4:36
I remember hearing a stat a couple of weeks ago, Eric that it was I think it was something like 200 s&p 500 companies are up more than the index year today. Or there was there was something along those lines. I can’t remember if it was the s&p or the Russell but basically a lot of companies are doing quite well this year and I think just zooming out for a minute. Forget about the seven stuff canola stuff. We took our medicine in 2020 to 2020. Steel was a horrendous year, it was one of the worst shares for the stock market in recent memory. And, you know, I read this great book a while ago was called it was a very good year, it was a good year. And it basically looked at the 10 best years of the stock market, the US stock market in history. And the common pattern was all the best years happen after terrible years, right? You just get that bounce back. And I would say to people that think we’re maybe a little bit extended here, just go look, big tech charts, and even the s&p 500, the NASDAQ on a two year timeframe. We haven’t even broken out yet. Okay, we haven’t even broken out yet. And I mean, invidious Opala. But this time last year was in a 68% drawdown. So, you know, we’ve come a long way. But some would say we haven’t even broken out yet.
Eric Chemi 5:53
Some would say that’s going to be the top though some would say we’re not going to break out and that they were not better off than we were that right. We’ve got higher interest rates, there’s better risk free opportunities. We’re seeing the impacts of possible recession coming. Others would say, we can’t go above the breakout, that’s going to be the top and then we’re going to collapse from there. That’s an argument.
Stephen McBride 6:13
Absolutely. It is. I think for me, the we talk about medicine and 2020 to as I said, it’s actually remarkable that stocks are not down more, right. When you think about how much rates have gone off. That there we had that earnings recession. And you know, inflation has stopped stocks, hate inflation, right? Forget interest rates, inflation is the really bad one. And so to me, it’s remarkable that stocks are not down more, I happen to think that we have the tailwind of a strong economy, which is really, really important for stocks and to ways higher earnings. And basically, that translates into when you know, when you get a recession, it’s really bad for the market, there’s a clear dividing line. Okay. And we’ve avoided us so far. And I think we, you know, we have the all clear for the next couple of months, at least
Eric Chemi 7:02
Are there say two or three major data points that you look at, when you focus on being bullish, is it? Is it the employment picture? Is it spending? Is it sentiment? What What have you found that tends to correlate the most as a leading indicator, something that has predictive value?
Stephen McBride 7:20
Yeah, look, I mean, for me, the economy is the stock market is not the economy. But over time, the two tend to go up and down together, at least in the US, I’m very, very focused on prices. I understand that, you know, prices are current and they don’t have I would argue that they actually do have predictive power because of momentum and stuff. And so I’m very, very focused on prices. And as long as you have that solid backdrop of strong earnings and a strong economy that makes me bullish.
Eric Chemi 7:55
Prices of the security securities okay not prices that things that we buy in the store, you don’t mean those.
Stephen McBride 8:02
No exactly the prices of securities there. You know, it’s human nature things 10 Things trend. Horses, man, we go and seek things that are moving, you know, nothing drives, not you know, nothing drives narrative, nothing drives sentiment, like price. You can almost think of stocks as like Veblen goods, the higher the goal, the more people want of them, right, the higher price there, the more people want them. So, to me, it’s hard to look at the charts now and say it’s time to be bearish. I think. I think we took the medicine and yeah, we’re going to be off to the races if we break out the all time highs I don’t think I’m any technical analysis book ever told you you set yourself the breakout, you usually buy the break.
Eric Chemi 8:47
This is this is where I get confused, right? Because a lot of people will say you will you stick with what’s working right? So things that are going up you want to stay long those things and the things that are going down and you want to get rid of those things. Those are your losers don’t hold on to losers, right. But other people will say no, everything mean reverts. So you want to sell highs you want to buy lows, I haven’t figured out what’s the right philosophy here. Do you have a sense for you know, when you see something making new highs? Is that time to get out? Or is that time to add it because it feels hard to buy at the most expensive price something has ever been?
Stephen McBride 9:21
That’s that’s a great question of human nature because I saw a great chart the other day and it was this was just for the s&p 500 as a whole. But basically you made more money on a one three and five year timeframe buying all time highs versus annual time. So in my opinion, all time highs are just stepping stones to more all time highs. Now when you look at individual stocks, okay, that can break down a little bit. Right. And for me things things do trend, I think, you know, I like to buy stocks that are in up trends that are making people money where a lot of people are in the money already. Paul Tudor Jones has that great quote of losers average losers, right? And I think on that unless you have a variant perception or reason why something is going to change an upcoming catalyst, you generally don’t want to buy stocks and downturns or at least, I don’t like to. So there’s lots of ways to bake the cake. I like to do things that are making people money already.
Eric Chemi 10:18
So by the way, I know when we were talking before you were in New York, you know, not too far from me. And you were filming your conference and, and and just just the other day, right, like you just got back to Ireland. The conference is now available. What what did you learn there? You know, how can people find it? If they weren’t there in person? What, what happened there? Because I wasn’t able to go, but I’m curious. You had a lot of smart voices there. Were they generally bullish, bearish? And what what can you share with us? And how can people find more? Well, you know, if they want to dig deeper on that conference,
Stephen McBride 10:51
Yeah, just to just to take a step back and really tell people what the conference was about where it was about AI Artificial Intelligence. And if anyone’s listening to this, that may be skeptical of AI was an AI skeptic tail. AI is nothing new.
Eric Chemi 11:05
All AI or AI, we can invest it?
Stephen McBride 11:08
I think all AI because when I saw, for the longest time, Merck AI was promised to change everything, and I’d read these articles about AI was going to be great. And it was going to change the world. And when I went to look for actual products that were working, or making people money, based on AI, there were few and far between. Okay, again, this is this is a trend that’s been around since 1956. We’ve had lots of AI booms and busts. Okay. And I think, chat GPT, which I would remind people is just a year old. That was the coming out moment of AI, it was the moment that it came out of the you know, the bells of college research departments, and came on to the consumer stage. And you’ve obviously seen that have a great deal of impact in the stock market with stock prices, you now for the first time ever have companies actually making money from this trend from real products. So it certainly changed what we invest in. And I think a lot of people might have missed this trend. I think people were were generally skeptical. They were jaded. From the past couple of years of maybe taking crypto didn’t work out the metaverse, that was a scam. And vra are they haven’t taken off. And people might have missed the AI events. So are the AI trends. So what we did is we wanted to put together a special event to really show people why AI is for real, why you need to be allocated to it. And again, we just recorded this big, big event at Columbia University. Hundreds of people have have have already watched it. It’s just that we’ve gotten great and feedback. And anyone listening now they can watch it on demand. And just to you know, why would you watch it? Why is it watching? Again, we give you know, I give five top AI stocks to invest in now. And also on the disrupted side, we look to invest in disruption. Eric, five companies that are being disrupted now, you know, big popular stocks. So again, my biggest, you know, my biggest frustration right there now is that there’s a lot of misinformation or bad information about AI out there. We want to give people a clearer picture of what’s going on, and how to make money from it.
Eric Chemi 13:17
So what are those five stocks I should be investing in?
Stephen McBride 13:21
Well, people have to watch the event to find out Eric.
Eric Chemi 13:24
are we get, we’ll get the links, we get the links up there, you should see it on the screen here. And in the comments in the description and all that we’ll get those, we’ll get the link, so I thought I might sneak it out here. I thought it might fool you.
Stephen McBride 13:36
I will give you one thing, Eric, I think there’s distinct when you look at all technological revolutions, there’s really three distinct phases that you want to pay attention to for investors. There’s the infrastructure phase, okay, where all the infrastructure, the backbone of the networks, or even railroads and canals are being built out. And then there’s what you can call the operating system or the platform. You know, phase that phase number two, and then there’s the apps. Okay, we have so much today. And maybe Microsoft is emerging as a platform, maybe open AI to, but really where the big money is being spent right now? Isn’t the infrastructure build out of that? Right? It’s the chips. It’s the networking equipment, it’s the server racks. Microsoft alone is going to spend $50 billion on its building out its AI data centers next year, right? One of the largest build out of any technology we’ve ever seen. So I think for right now, that’s really where people want to focus.
Eric Chemi 14:34
Think about that number $50 billion, that one company is spending just on data centers, right. $30 billion is more than the GDP of many countries. It’s more than the market cap of major, major brand names are talking about. And that’s just one company’s data center spend for one year.
Stephen McBride 14:53
Right? Right. It’s incredible. Incredible.
Eric Chemi 14:56
So tell me because that it’s so your phrase is why I wanted to get into it because I know I see your work online on Twitter on risk hedge.com. You’re talking about AI a lot. How is it changing? I guess you’ve sort of answered like what we invest in. Right. Like you said, the three phases? I think you’ve answered that I think the conference one of those specific specific stocks in there, but how is it changing? How we’re investing? Is it changing the models? Is it changing the, you know, separate from investing in AI related companies, but using AI to figure out how I should just trade in general, because, you know, we’ve seen target dated funds, we’ve seen that 6040, stock bonds split, we’ve seen all those sorts of basic algorithmic type of ideas, but it’s getting so far advanced that now you can have a portfolio of 1000s of companies and each one gets a little micro weight and a little tweak and a hedge because the computers can do that for you. Are you seeing AI change that approach is how do you run a portfolio? Absolutely.
Stephen McBride 15:56
I mean, look, finance, the stock market is the greatest game in the world, right? So the finance guys have been very ahead on machine learning. Very ahead on quant stuff, I think you get such a great point, when you talk about how it changes, you know how it changes we how we invest? Because the biggest gains from AI might actually come from using the technology, not investing in technology, I think we can make a lot of money. But I think even the bigger gains for you, for your children and so on might come from using the technology, which if you think about it, that’s actually quite unique. I don’t think a lot of people use crypto. The Metaverse was not here. And even when you think back to older technologies, they were not in your hands. And I the best way we’ve found how to use AI is almost like a junior analyst. Right? That that will that will walk 24/7?
Eric Chemi 16:49
Not you – chief analyst like you but a junior Stephen.
Stephen McBride 16:53
Exactly, exactly something someone you can task with lower level tasks. Eric, for example, if you’re looking into a new industry, right semiconductor wafer wafers and or semiconductor equipment, industry, you can go and ask Chuck GPT, or Bing or whatever, and give them explain this industry give me the main players, how much revenue did they earn last year? What’s the competitive dynamics between them and explain all that like on on five, and it gives you a super simple breakdown of exactly what’s going on. And I would remind me, I would encourage everyone to use the technology. And I would also remind people, if you think it’s a little clunky, it doesn’t work. Take your time to play around with it. It’s powerful. And remember, this is the worst it’s ever going to be right. The rapid improvement in this stuff is just remarkable. When you think about charge GPT to GPT4, and so on. And so above all else, this is really incredible proach productivity till you saw coders who use Microsoft copilot, they get tasks done in 50 to 55% Less time, you’ve seen the same across consultants, Boston Consulting Group just did a big study by Harvard. And you’ve seen it with Reuters. So you can use it for so much. You can use it to proofread you can use it to write copy, you can use it to edit. And you know, if you’re working at one of these big hedge funds, of course, machine learning, recognizing signals in the market is que por for most of most of us, you know, don’t work at big phones, I think the best way to use is like a junior research analyst that does a lot of the heavy lifting the grunt work for you.
Eric Chemi 18:32
When I hear all this, I wonder is this going to be a job killer? When you think about your macro perspective? Is this? Is this bad for growth? Bad for jobs? Is it gonna kill employment? What’s the big macro impact? If all of a sudden you’ve got a free junior analyst, and now you don’t have to go higher?
Stephen McBride 18:49
So I think yeah, two, we will take those two things at a time during the growth, first of all. And I think overall, this is incredibly, incredibly good for specifically the American economy, because America is uniquely enabled, uniquely set up to adopt AI. I think when you talk about concerns that people have, why do they have no concerns that AI is going to take all the jobs? I think it’s because for the past 15 years or so, we’ve lived in this low growth regime, right? Everyone seems to think the economy is a zero sum game, if you succeed oils, and vice versa. I think that’s the wrong way to think about it, especially with AI. And when you think about GDP growth, right economic growth, it’s just simply population growth plus productivity, right? And today, it kind of feels like a we’re still gonna rock Eric, right? I mean, when you look at the demographic trends, and even even the death, you think, Oh, my God, there is no way out of this. And I think AI is going to be a huge productivity boost to the US economy. And it’s actually going to solve a lot of these seemingly unsolvable problems that we have. Again, you look at coders, this is just one segment of the economy, that they now get tasks. in half the time, I think called
Eric Chemi 20:04
half the coder says Does that mean we only need half the coders if they can get it done in half the time.
Stephen McBride 20:08
So I have an interesting one for you, Eric, when XL came along, right? There was all these stories of how oh my god, this tool is just so incredible. I can now do a week’s work in an afternoon. And of course, what happened when Excel came along, we now have a record number of accountants, a record number of business analysts, record number of financial analysts, if people want to look up something interesting, there’s something called Jevons paradox, which is essentially, the cheaper you make something, the more something you have, the more of attain you use. So for me, I see AI enabling us to do higher level tasks, way more stuff that could not have been done before. So that’s actually going to create more employment.
Eric Chemi 20:54
Okay, yeah, you can think of it more like Google, right? You think of it like, now I don’t have to go to the library, I could search stuff, I could get more information more quickly. So we can all get more information more quickly, AI feel something kind of like that I can get more information more quickly. Right. And it’s like what the search engine did to replacing having to go to the library to get information or having to look it up in the newspaper? Yeah,
Stephen McBride 21:16
I mean, look, we’ve been deploying game changing technologies for centuries, yet, pretty much anyone who wants a job today has a job. And I would argue the quality of those jobs is better than ever. And if AI caused mass unemployment, it will be the forced technology in history to do so. And I think the big thing here, Eric, is that it’s easy to imagine what jobs could go away. And there absolutely will be some jobs that go away, right. But on the whole, we’re going again, it’s way harder to imagine what jobs are going to be created as a result of this new technology. It just kind of like if we were talking in 1990, there would have been no way for us to predict. And the podcasting jobs and social media manager and digital marketing, you know, vice presidents. Yeah, all those jobs exist today. So that’s that’s the problem that we have right?
Eric Chemi 22:05
To like this. This what we’re doing right now was impossible wouldn’t have existed before. You mentioned the US is perfectly positioned for that. Are there other countries, or industries that you see are better positioned to take advantage of what this AI is going to be?
Stephen McBride 22:21
Yeah, so first of all, I think it’s just worth spending a moment on American entrepreneurship, innovation, technology progress is in America’s bones. And I think when you look at all the leading us or AI firms, most of them are in the US, most of them are based in the US, not just purely artificial intelligence firms. Also the chipmakers, which are critical to this technology. And one interesting thing I’m watching here is robotics, which I believe is like the physical manifestation of AI to AI creeps into the real world. And, you know, this, this is something that we cover in the event. I’m super bullish on when you walk into a Tesla factory, or an Amazon warehouse today, full of robots, right? What happens when that scales up to economy wide? What if robotics allow America to produce goods cheaper in China or Vietnam? Right? That’s, that’s a huge deal for Americans complete game changer. And zooming out, I think Europe is a lost cause. And Europe is trying to kind of band AI it’s writing and video offices and powers and all this stuff.
Eric Chemi 23:28
Why didn’t you repeat everything that’s new. You’re the chief, Europe person on this call. So you got to, you know, continent,
Stephen McBride 23:40
Europe has turned into new museum, they don’t like anything that’s new. They want to preserve everything, just as is. And it’s an incredibly hostile environment for new companies and new innovators. Which is why the colonists and borders are Irish, they start a company, what do they do they move to Silicon Valley. That’s what any good European entrepreneur does. So for me, and Europe is is a lost cause. And I think it just has fallen into this mindset, that we want to preserve everything that it that, you know, that is old, we want to preserve everything as it is, and you know, this new stuff, it’s bad for climate change. It’s bad for you know, social, social mobility and stuff. So just, let’s, let’s leave that to the Americans. So I’m not bullish on Europe. You asked also about industries. And I think Marc Andreessen famously wrote in 2011 Software is eating the world. AI is going to eat after right, I think you’re going to see a lot of previous winners get disrupted. And there’s a new Silicon Valley that’s going to emerge. And the thing I’m most bullish on the thing I spend a lot of time thinking about is how AI is going to crack into health care and education. Right. Two of America’s most important but also most broken industries. And, you know, we’ve all have kids, Eric, and I think we would all be quite glad for are some expert Robo tutor to take over, it’s crazy to me that my kids education is the same as mine. And pretty much the same as my motors, something needs to be done here. So super bullish on the sector.
Eric Chemi 25:12
Yet simply, do the people need to even be educated if if the robots are doing the work, and the AI is doing the work, and you’re gonna have aI interviewing you, but you could just be an AI analysts? Like, do people need to even be involved at all? Why do they even have to learn anything?
Stephen McBride 25:28
So I think I remember, someone told me the quote, what scares is valuable, okay. And I think in the in the age of AI, where you can create endless content, and you know, there might be, you know, there’s Yeah, you just, you’re just going to be blasted in the face with all this stuff. The scariest thing will be personality will be humans will be, you know, natural conversation. And you could on one hand, I can make a very compelling case for AI, which is I wake up every morning, and there’s 40 emails in my inbox, and I have to figure out which ones to read, I’m just inundated with stuff. In the not too distant future, my personal AI is going to know exactly what I need to read. And it’s going to just show me those emails. And it’s going to be the same on YouTube. And it’s going to be the same on Twitter. And it’s going to be the same in a lot of other places. Now, you can paint that as dangerous. But if used in the right way, it’s actually it brings us to a much better place than we’re in today.
Eric Chemi 26:25
What are some? Is this helpful? This is helpful to get your perspective on it. So you’ll base on it, there’s got to be a lot of common questions you get from people or common misconceptions you get from people that they don’t quite understand AI, they don’t quite understand the impacts. Do you find that when you’re having a normal conversation with with a regular person, not necessarily an industry analyst or AI expert? What do you find yourself having to explain over and over again?
Stephen McBride 26:49
Yeah, so I think the number one thing, and we talked about already is that AI is just going to take all the jobs. And I really do not think that’s true. Again, every technology in history has created more jobs, and it’s destroyed. And actually, I think there was a there was a great study from your your alum, MIT, and it was 60% 60% of employment in 2018 did not exist in in 1940, those jobs did not exist. Again, technology just creates new jobs. I think the other one that people worry about is that it’s going to wipe us all out. And it’s going to kill us. And AI is not at least in scoring form is not somehow my intelligent robot from 2001, A Space Odyssey, and it’s a machine it’s not going to come alive. And one for investors, maybe a record or just even casual investors that I think pink. People think big tech is going to capture all the gains here and just kind of just scraps left for everyone else, right? Don’t even bother investing all these AI startups are just smarter AI companies. I think that’s completely wrong. I think AI is the great equalizer. It’s extreme leverage. I’ll give you the perfect example. Google has 190,000 employees, right? For the longest time, Eric, I was here and Google is in the AI layer. That’s the reason why open AI was started. Don’t even bother competing with them. With 300 employees open AI is wiping the floor with Google. So again, for me, it’s an extreme, it’s a tool of extreme leverage. It’s going to help startups compete with today’s big tech giants. And maybe the last one that people kind of, you know, think is that AI is a fad. Again, I think people are jaded, maybe from the last couple of years of the tech sell off and 2021 2022 was a rough year. This is for real. For the longest time AI was a fad, right? But now you’re actually seeing companies starting to make money. So yeah, I think those are some of the common misconceptions people have about AI.
Eric Chemi 28:51
So sounds like you’re very optimistic. You’re very bullish. You think the stock market continues to rise, you think the economy continues to grow? More jobs will exist? AI is a good figure. You’re very, very happy guy in terms of your perspective on everything. You’re with a big smile.
Stephen McBride 29:06
Yeah, well, look, it’s been it’s been an incredible year. I mean, I’m always on my guard, and if prices and you know, if prices started to go the other way, I have to respect the market. And I’ll certainly, you know, when the facts change, I’ll change my mind. But at least right now, I see every reason to be bullish. If I had to choose I would say ai ai specifically is under hype right now. And on on the heights, I think if you look Eric, actually great stuff for you in videos trading way below its five year forward PE Okay, so I don’t think anyone can actually say in videos an expensive stock and Nvidia which tripled its revenue over the past two years, or sorry, last year, year over year tripled its revenue and is trading at a lower forward PE than Apple, which has not grown until years. And so I would say people are actually quite scared Ethical sell off of AI companies,
Eric Chemi 30:02
Anything else from the conference? And again, like we’ll have that that link here and in the description and ever so people can find it and click right to it in terms of like, who was so many were surprised about in terms of what they said or who is there. You know, a topic that that you you yourself, you felt like you learn something new hearing some of these experts talk.
Stephen McBride 30:24
Yeah, so we had Doug O’Laughlin on, and he’s when I want the perspective on what’s going on with chips, I call up Doug is a great source of knowledge. And he had a great lot to say about how the best analogy for the AI infrastructure phase that we’re in right now is the telecom build out in the 90s. Right, and just so much money poured into creating all that flavor, and, and building out the internet. And it was obviously an incredible boom for people. So that was an interesting perspective and interesting kind of analog that I hadn’t thought about. And I really think AI is the biggest thing since the internet, maybe more. So we also talked to to mark usto, and more of Morgan Creek. And he had a lot to say about AI was incredibly bullish on it. He kind of looks at companies maybe at an earlier stage and in the venture capital sector. So there’s there’s tons happening there. So overall, people are around. I think people are coming around to the idea that that this stuff is for real, right? It’s not it’s not a fad.
Eric Chemi 31:31
It’s not that I think you’ve scared me straight. I haven’t done enough with the model, the chat GPT and Bard and all the other ones that are out there. Where should somebody start? Because you said I think sometimes it seems clunky, or you’re not really sure what exactly to tell it because you don’t know what, what, what you needed to do, or you don’t realize it? How can it really help me in a world where, okay, I’ve got my regular job, but I don’t really see where I can get efficiencies out of it.
Stephen McBride 31:59
So I would first of all, say GPT4 GPT+ is by far the best AI model. Right?
Eric Chemi 32:07
Right, that one’s out free to pay 20 bucks a month. Correct.
Stephen McBride 32:10
But I’ll give you a little hack Eric, there is a there is a way you can access it for free, which is Microsoft Bing. So when you go to Bing chat, that is GPT four on the back end. So there you can access the best AI model that the world has to offer right now for absolutely free. And just for anyone listening, you know, whatever you do, I would encourage you to think of a task that takes you a lot of time every day, something you don’t necessarily like to do, and go and see, you know, play around with fiddle around with, with Bing and see if you can, if you can do that task for you, if you can, I’ve found a kind of those 90% of the work and 99% less time, whether that’s drafting emails, or, you know, I read this, this great exchange about parents who were having trouble with their kid and skill and the used being to draft an email, which they tried to draft and they were just like super emotional about it. They got they got their GPT for to draft and everything was sorted. They sent it to the principal. So little, little things in everyday life like that, right. Again, this is so unique in the sense that our touches every single one of our lives. It’s not like back in the 90s that we were kind of we’re all like fiddling around with fiber. Right? And so yeah, it’s exciting times. This
Eric Chemi 33:29
is great. I appreciate it. So where can people find more about you? Is it risk hedge? Is it risk? hedge.com has kids that net? What’s the Twitter that? Is there a newsletter? And what are all the ways that people want to really dig deep with you? Yeah,
Stephen McBride 33:43
thanks. Thanks so much for having me, Eric. I really enjoyed our discussion. So if people want to learn more about me and us, they can go to risk edge.com I write a three times weekly newsletter called the jolt everything markets, everything life, being a dad, all that all that good stuff show show people how to profit from disruption. And they can also follow me on Twitter at disruption, hedge. Love, love talking to anyone who’s skeptical about this stuff. And yeah, it’s a great time to be alive Eric.
Eric Chemi 34:15
You mentioned the kids. It’s funny. You mentioned the email that you could send that If only it could actually discipline them, feed them dinner, put them to bed, do their bath. Have them not wake you up in the morning then it could be really valuable to me.
Stephen McBride 34:29
That’s coming with the robots just just watching along call up. Ilan you’ll have that ready for
Eric Chemi 34:34
Coming with the robots. Exactly. Then I’ll be scared until until they’re actually moving around in our house. I guess I’m safe. They can’t. They can’t kill us until they’re moving in our house.
Stephen McBride 34:44
It’s just a chatbot. Right. It’s just a chatbot just a chatbot.
Eric Chemi 34:48
Steven, so good. Thanks for the time. I really appreciate it. Thank you so much again for my guests coming on the show. Thanks for watching. Of course, you’re hearing all this trying to figure out what to do with your finances with your family’s fine anses you can go to wealthion.com you can fill out the short form, this is a quick email. And we can connect you with investment professionals that we endorse that we that we know we work with, we trust so you can have a free conversation, no commitment, no obligation, you can just have a conversation with them to see if they’re the right fit for you. Right. If you don’t have anyone you’re working with right now, this could be an opportunity to help get your finances on track your family’s investments on track as well free public service that we firstname.lastname@example.org so you can check that out. And if and if you liked this episode of Steven and I please like it, share it forward, subscribe to the channel. Those are ways that the algorithm can pick it up and send it to more people so we can really get this content out there and more people can learn and do a better job with their investing as well. So thanks again for watching Wealthion, I’m Eric Chemi we’ll see you next time.