The Exchanges

Q decision meetings, a longer line of managers feeling they need to review a topic before it moves forward. Owners of initiatives feeling less like they should make recommendations because the decision Will be made elsewhere. Truly day two type of culture taking place in Amazon. Um, but obviously the, you know, the company has existing assets that are quite strong. So what's your perspective on the Amazon trade right now?

A Look, I think the expectations for Amazon are very low, and the stock is selling at, uh, a discount to the multiple it sold at in the before times in 2019. And they've never, ever gotten their premium valuation back. And, uh, you can't say the same for the rest of the, uh, mega caps in tech. Uh, Meta looks outstanding right now. NVIDIA looks outstanding. Um, Amazon and Tesla are probably the furthest away from their fifty-two-week highs of that group of stocks. Uh, I think Apple made a new high today. Uh, so, so Amazon is absolutely being treated as though there were issues there. Like, I don't think when they go into this next earnings report, people are expecting any sort of, like, upside surprise or anything like that. So, it's kind of in a weird place, but, you know, from my perspective, that's why there's an opportunity. And, uh, You know, we just went through this cycle with Meta. The stock was in a 75% drawdown. People forget it since I think more than tripled. So when, when companies have problems and they address them and they admit to them, it's like the first step of like, Hey, we have to change something here. So I don't know how long it takes for, for Jassy to get, get his act together. But, uh, I think the stock's gonna work.

AI assessment note: “from my perspective, that's why there's an opportunity... I think the stock's gonna work.”

Q And what happened to them when they started to see big tech encroaching on their territory?

A So, somebody relayed this story to me. I think that it's a, it's a guy that owned a bunch of grocery stores in suburban New Jersey, and when he saw Amazon getting into delivering food, it was like, oh, ok. Uh, I, maybe instead of putting all this capex into my supermarkets, I'd be better off just buying Amazon stock. And, uh, again, this might be 2014 or 20 15, and I think he's ok now. I think I haven't, I haven't checked in with the person who told me the story, but I would imagine if he were allocating to Amazon rather than spending money on his own, uh, capex to improve his supermarket, he's probably gotten a much higher rate of return on, on his investment. And I told that story as sort of a metaphor for the way a lot of people were thinking in those, in those days.

AI assessment note: “I told that story as sort of a metaphor for the way a lot of people were thinking”

Q companies that are doing all this automation and behind all this AI, Facebook, Google, Uber, Nvidia, Apple, Amazon, Alibaba, the list goes on. So let me ask you this to begin with. Do you think that this is really fear of automation or just that this is where the economic growth is going in the economy? Because we haven't yet seen a decline in let's say employment because of automation.

A Yeah, I think that there, any time that we're going through a wave of disruptive technology, this sort of thing is prevalent, but I think AI is different than all previous waves of technology, because I think everybody immediately grasps how much of their time is spent doing things that if any, any other means of getting those things done were possible, The employer would default to those other means. So this is like not new, but, um, you know, obviously there were people that were by hand running calculations, and then the calculator came along, so I'm not breaking any ground here, but I think in the case of AI, its ability to, its, its ability to, uh, effectively ape humanity Is what sets it apart from prior waves of technology. So, I think that that kind of, like, uncertainty about, alright, well, what's gonna be my place in this world if this, this new technology is so good at doing what I do and, and doing it faster? Um, this is not about being replaced by a computer. At this point, everyone's very comfortable in the world of computers. This is about having someone's essence At work, be distilled down into an equation, and the equation doesn't need healthcare. Um, so, like, that, that's why I think there's that sense of foreboding, and I think, like, a certain portion of the population is smart enough to understand new jobs will be created as a result of this. We don't kno…

AI assessment note: “that's why I think there's that sense of foreboding”

Q also talk a little bit in the first half about how, um, the fed tried to force a recession. I think this was supposed to be the year that that was supposed to happen. The S and P 500 is up 23% year to date. Uh, we've been hearing about, yeah, recession, hard landing, uh, rates are going down now. Inflation is lowering. So mission accomplished. What do you think?

A Well, I, so I had, uh, on the compound of friends last week, we had Dr. David Kelly, who's, uh, probably the highest ranking strategist at JP Morgan. And his perspective, his perspective is that the fed really had nothing to do with it. We had these temporary, uh, supply imbalances all over the economy, and we had all these labor market issues, again, stemming from how stimulated everyone was financially. And those things, like, worked their way through the system, and reality came back, and it turned out that, like, you know, the economy kind of healed itself. I mean, that's like a stylized version of what he was saying. I'm not as smart as him, so I wouldn't disagree with him. Um, I think the Fed does play a role, but, uh, there are a lot of people who think, like, demand for capital is ultimately gonna get to where it needs to get to. And, uh, you know, the Fed can exacerbate the direction one, one way or the other. But here we are, to your point, uh, Alex, at the end of 2022, the idea that we would have a recession and a hard landing in 22, 23 was effectively consensus. This is the unanimous opinion, pretty much, of Wall Street strategists, of mainstream economists, of CFO survey that they do at Duke University. Like, this was just what people said. It's, it's happening. Like, this is it. We're going to have the hangover from the pandemic era stimulus. There's nothing you c…

AI assessment note: “the consumer ended up being more resilient than we thought.”

Q stop and shop. So, um, so let me ask you one last part about this, which is that, okay, let's say we do. So let's say we do go from this like, uh, era where people end up, Having their work automated or taken over by these conglomerates or technology. How does that shift the nature of our economy? Is it increasing inequality or what exactly does it do to?

A I don't know. So, so you know more about this than I do, but like, let's say hypothetically you have a job, you're coding, um, at Microsoft, and then they put this thing on your computer that helps you. And all of a sudden, You're able to code twice as much over the course of 20 business days in a month as you were three months prior, because you become really adept at utilizing these, these AI tools, and you become better at your job, the company becomes more efficient, and everyone's happy. But then, like, what, what happens after that? Because now, there's a new baseline on how much work you're expected to complete, um, Like, it's not like you'll, you can't, you can't go backwards. You can't say, all right, I'm going to revert back to, okay, so now everyone's doing more. Getting paid the same, doing more. And then all of a sudden, that, that, that ride along AI that's watching you work and helping you and offering suggestions, all of a sudden it starts dictating to you because they improve that software. Or the software improves itself because it's generative and it's seen enough and And it knows where Alex continues to make mistakes. And before you even get a chance to, to make that mistake, it's already in front of you, either telling you what to do right or doing it for you before you can mess it up. And that, it reminds me a lot of the road toward, uh, uh, full self-driv…

AI assessment note: “now everyone's doing more. Getting paid the same, doing more.”