Good morning. Lots going on this week.
I’ll be in London on Thursday having breakfast with one of my heroes—“The Rational Optimist” himself, Matt Ridley.
Then I’m headed to NYC for the launch party of my friend and prolific writer Jared Dillian’s new book: No Worries: How to Live a Stress-Free Financial Life.
Here’s a little excerpt Jared shared with me:
I already pre-ordered the book, and I’ll probably read the whole thing within 48 hours of receiving it. Jared’s writing is that good. Grab your copy here.
Now, let’s get after it…
Apple (AAPL) just announced a new breakthrough that will allow artificial intelligence (AI) models like ChatGPT to run on your iPhone.
Until now, these power-hungry programs had to come from giant datacenters. Soon, they’ll be able to run on the six-inch supercomputer you carry around in your pocket all day.
This is going to change your life.
Every business will have an AI engine. You’ll be able to sync your highly personalized AI assistant—who knows everything about you—with your favorite restaurants, for example.
Are you vegan? Have a gluten allergy? Every restaurant will know before you walk in.
I admit this sounds a little invasive. And yes, I care about privacy. But the reality is it’ll make life so convenient, we’ll all do it.
Restaurants will know your favorite dishes the minute you open the door. Hotels will know you like the AC at 72°.
Schoolkids’ AI agents will create personalized quizzes to coach them through subjects they’re struggling in.
AI is often painted as some dystopian technology. I’ll take the other side and say it’s going to make the world a whole lot better.
It also has the potential to be the biggest boom in history because, unlike most other tech breakthroughs, it touches every part of our lives.
The investment implications are many. The most obvious one: Buy the companies making computer chips that will power AI—like Nvidia (NVDA), which is hitting new highs.
I’m glad we bought this winner early.
Look at this chart showing how most couples now meet online.
If online dating (red line) were a stock, it’d be hitting new highs. I don’t recommend buying dating app stocks, though. Monetizing hookups is a tough businesses.
This got me thinking about how people haven’t fully grasped that the internet is now real life.
“Online” and “offline” were once two separate worlds. But nowadays, people work… earn a living… hang out... shop… watch TV… and fall in love online.
I spend the majority of my waking hours on a screen. I often talk to colleagues who are half the world away more than I talk to my wife.
Even if you’re not “extremely online” like me, try going 24 hours without using the internet. It’s not practical.
Technology is eating the world. The interesting question is, “What comes next?”
I think we’ll see tech companies—which have mostly operated online—start really disrupting the offline world.
Two examples:
#1: Amazon (AMZN) now ships more parcels than both UPS (UPS) and FedEx (FDX).
#2: Waymo’s self-driving cars, owned by Google (GOOG), are launching in major US cities.
Innovation will dramatically shift from just software (websites and apps) to the combination of software and hardware (tech you can touch).
This will create a whole new set of winners. I’ll have a lot more to say about this shift—and the ways to profit from it—in Disruption Investor.
My wife and I stumbled upon a YouTube channel called Outdoor Boys over the holidays.
It’s a guy recording his camping trips in the wilderness. All his videos get millions of views:
We watched a couple, and they were great. I feel a weird mix of intrigue and admiration watching him surviving without all the modern conveniences.
Content like Outdoor Boys is the biggest threat to Hollywood not named AI.
My wife and I could’ve gone to the movies or turned on a Netflix series. Instead, we watched some bloke freeze his butt off hiking through Alaska.
This weird, authentic, and niche YouTube content is winning the battle for our free time. And our free time is worth trillions of dollars.
Future’s bright… especially for independent creators making a living off their niche passions.
I’d consider buying YouTube stock if it wasn’t owned by Google.
I’m sure you saw the video of the Alaska Air Group (ALK) flight where the door blew off midair. Not good.
But there’s never been a safer time to fly on an airplane.
Technological innovations like autopilot have transformed airlines into (very safe) air buses:
Remember: Technology saves lives.
Have a great day.
Stephen McBride
Chief Analyst, RiskHedge