We'll start this week's message off by looking at the data I shared in our internal research call yesterday afternoon. The topic was the day's market internals.
The reason I'm using yesterday's action as my segue to this week's message is because in a number of ways it serves as a nice microcosm of the 2020 equity market to date.
For starters, while the major US averages were up yesterday, lots of stuff wasn't. Here's the breakdown for our core portfolio. I.e., long positions occupying 36% of our core portfolio rose yesterday while 45% of our core allocation declined. The balance sits in cash (FYI 4 of the entries are placeholder indexes for reference):
Bill Gates thinks AI taking everyone's jobs could be a good thing - there isn't a lot we can do to stop it. But if it plays out like Gates predicts, it will be a net positive for the world. We might all have more free time because of AI, he says.
"There will be challenges because the rate of change will be faster in these next 20 years than it’s been before," Gates said. He concedes that the government will likely be forced to rework its social safety net programs, and help displaced workers retrain for the new economy, but if done right, it will be a net positive for everyone.
Marty 4:34 PM
Dan 4:34 PM
I was just talking about this a few months ago
Marty 4:34 PM
it'll create more jobs.... watch...
Dan 4:34 PM
short term i'd agree
but i still think 25+ years from now we will see the shift
plus the rate people procreate
Nick 4:35 PM
shift to Mars
Dan 4:35 PM
Nick 4:48 PM
I do think there are about 1 bajillion jobs that can be replaced w/ AI/ tech.. could be a retraction, then expansion and so on.. but it's coming nonetheless.. but speaking to more free time... there are serious inefficiencies today... I see & experience it every day.. and many people have a vested interest in keeping tech away.. either way.. will certainly be fascinating.
Marty 4:51 PM
on the phone with Carol D will answer later when we're off
Dan 5:10 PM
That's the ultimate question, and a lot of people will say technology hasn't displaced jobs yet, but historically, tech has always been built around set parameters of code to replace one particular role of someone. Allowing for new jobs to be created, and or maintenance persons to repair said tech. Artificial intelligence is NOT this. Advances in technology have consistently led to decreases in requirements of labor, and increases in quality of life.We are talking about machines that can learn, adapt to the environment, and solve problems, all without human intervention.
will it happen in 10-20 years? certainly not, but 50 years? I suspect we begin to see just how radically different the world will be
Nick 5:14 PM
Yes.. these things have to have resulted in a net reduction of jobs... right?
Nick 5:15 PM
M will say: the jobs were created somewhere else.. but aren't these all tech jobs?.. i.e. unskilled labor is in big trouble?.. has to be less jobs
Dan 5:15 PM
100 workers replaced by 5 maintenance team members
Nick 5:16 PM
yes... eagerly awaiting Ms response
Marty 7:24 PM
So, I like the topic... It's one I've studied a lot over the years. It's something that obviously is rich with historical precedent. The term used among economists for those who believe that technology leads to the net destruction of jobs is "Luddite"... Named after a young man who led a band of 19th century English textile workers... they'd break into factories at night and destroy the new machinery that they believed would ultimately rob them of their jobs. Funny thing is, a decade later their industry employed multiple times the number of people vs before the technology was invented.
Dan 7:28 PM
I suppose the other argument is that entirely new jobs we aren't even thinking about will be created
Marty 7:29 PM
yep, for sure... would have to be the case I think
Dan 7:30 PM
50 years ago who would've imagined that we'd have internet with sites like youtube or needing coders / programmers to create digital content
would've sounded crazy
i mean the first iphone came out after Nick and I graduated high school. look what that did. people literally have full HD camcorders and cameras in their pockets
unlimted access to the web and information
Marty 7:33 PM
Yes! no doubt in 50 years there'll be stuff unimaginable today... Given medical technology, seriously, we may even be having that conversation: me 108, you 80-something
After playing 2 out of 3, one on one...
Me winning in 2
Dan 7:37 PM
true though, things are moving crazy fast. it's an awesome time to be alive that's for sure
Nick 7:38 PM
M will say that they always said that
Yes truly feel we’re are at a turning point
Marty 7:42 PM
yes it is! from so many perspectives... it's actually unique from a geopolitical/macro perspective -- I mean where we are now looks like it could be at the end of a long-term secular debt cycle... In fact, it's almost certain that we are... It's unique, but it's a lot like the 1930s/40s at the same time... societally-speaking very much as well...
what's very cool is that, as a firm, we have me obsessed with the history of it all, the market structures, and so on... And you guys captivated by today's technology... Could actually be that it's arrived just in time, and will bring such massive productivity that it'll in some way alter the path... At a minimum, we'll see the opportunities to exploit when the timing's right! AWESOME TIME TO BE ALIVE!