Speaker 1: You have a company company, let's call it a USA
company called that's the name of the company. It's called USA,
and USA is a company has a product that it sells,
which is protection security infrastructure. And you pay them in
a form of a percentage of your wages. That's how
you do it. And what they've done is they've capitalized
it basically through debt instruments. They don't have any equity.
You don't have equity, you have debt. So you have
an ownership of this kind of through the debt. And
the death that they have issued over the years is
compounded dramatically because they needed to for a lot of
unforeseen expenses. Now the debt is blossoming and the company
is taking in revenue through a part of your income.
And if we eliminate that, what other mechanisms do we
have to pay down the debt interest and to pay
off the debt and to fund the company's continuing security infrastructure.
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Kerry lepp Well. Got somebody
back on the show, hasn't been on in quite a while.
Somebody who's investing acumen and knowledge. I put up there
with some of the best. Whose name is Andrew Horowitz,
A disciplined investor. And sometimes discipline is good and sometimes
it's not. But when it comes to just think, the
only way to make money over the long bawl is
through a discipline, very strict approach with firm, viral and
sell rules in plate. Andrew, it's great to have you
back on the show and spend years. I was on
your show recently and so coming. What the how things
have been going? I mean the market. You know, we
tend to overloit the fact that the stock market was
the greatest invention creation effort for creating well, and you know,
you get into your family, you get into your business,
and you kind of just don't think about it, and
then you look at your portfolio, assuming you haven't had
one of those infrequent crashes and you say, wow, how
did I get here?
Speaker 1: Yeah, it's amazing because I have, for example, I family
members have friends that have four one K plans, right,
and the kids have four one K plans. And I've
always told them, look to me a favor, just just
close your eyes, hold your nose, put money into your
four one K plan. They're like, oh, well, you know,
I'm just starting this new job. I don't have the money.
And then invariably I forced him to do it. I'm like, look,
just do a few dollars and let's see what happens.
And somehow it's a bit of the sleeping beauty concept.
Speaker 3: Right.
Speaker 1: They wake up a number of years later and they're like,
whoa wait, do you look how much I got in
this four one K plan. I'm like, yeah, And if
you didn't argue to begin with, if you didn't spend,
say you know, oh, look at all the money I
have to spend on this or that. What happens is
it becomes almost a regular occurrence that you don't even
feel and like, yeah, I don't even when I did
it first, I was I was hurt for a minute,
and then all of a sudden it came back to
the idea that I don't even remember doing it, and
just a message out there for people that are listing
that if you haven't done it, and if you were
one of those people like, hey, you know what, my
employer doesn't match, it doesn't matter. Pre tax money that
has the availability to compound at a tax deferred basis
through a four to one K plan or O row
off IRA or an IRA or any other kind of
pension plan is one of the greatest wealth creation on
top of the stock market. So you add the benefit
of tax deferral. So if you haven't done so, it's
an important to end of year here to start thinking
about what you're going to do for next year. And
if you're age sixty to sixty three, starting in twenty
twenty five, there's a super catch up that's available where
you can put an extra thirty seven hundred and fifty
dollars into I don't know what this whole six carry
this hole. Who picked sixty to sixty three, but it
is what it is. If you're age sixty to sixty three,
you get not only your base your catch up, but
you're a super catchup that you can deposit money to
for your four and one k to add even more
money to your four O one k for your future.
So I agree, greatest, greatest invention. But then if you
add tax deferred compounding on top of it, even better.
Speaker 3: Yeah. There's always that age old thing to the rough IRA.
So you think your regular IRA, you convert it to
a row up, you have to pay is on it,
but then you can build up, continue to build up
well tax free and not pay any packes on the distribution. Right,
And so is the tax deferrol that you get from
a traditional IRA worth We're eventually paying tactes on it.
Or you do partial conversion you know the age old
the thing works.
Speaker 1: Yeah, are you better backdoor conversions? And you're better off
with wroth? We have better off of this. It all
depends on how old you are. The younger you are,
the better off you are to have a WROTH. And
then we have to ask the question which none of
us answer could answer, what's the tax rate it's going
to be the future.
Speaker 3: Higher or lower?
Speaker 1: The fact is I'm putting five thousand dollars a year away,
ten thousand dollars a year, whatever the number is, into
a regular IRA, and I'm getting a tax deduction for it,
which is great. It gets tax deferral, which is fantastic.
But now all of a sudden it's worth five hundred
thousand dollars in the future, and I gotta pull money
out of it. I'm pulling money out of a much
high tax rate or lower tax rate, and I'm pulling
out at a much higher valuation at that point. So
a lot of questions to answer. H Very, there's no
magic potion to this whole thing. The only thing I
could tell you is do it some way, somehow get
money working.
Speaker 3: Oh so, you know, we heard a lot of you
know this incoming Trump administration reminds me of JFK when
he came into office, different being brought in the egghead,
they called them, all these guys from Harvard, Yale, Ivy
League come up with all these brilliant ideas that didn't
but it was a period of great optimism. Now we
got Trump here, bringing in billionaires and really bringing in
people who actually got real life experience. And one thing
they talked about the I don't know how theory it
that is, but I'd love to see it. My felt
is elimination of the federal income fact. How does that
think It's possible. Can it not done? Well?
Speaker 1: If we do what mech it is, Well, let me
ask you this, Kerry. You have a company company, let's
call it a USA company called that's the name of
the company. It's called USA, and USA is a company
has a product that it sells, which is protection security infrastructure.
And you pay them in a form of a percentage
of your wages. That's how you do it. And what
they've done is they've capitalized it basically through debt instruments.
They don't have any equity. You don't have equity, you
have debt. So you have an ownership of this kind
of through the debt. And the death that they have
issued over the years is compounded dramatically because they needed
to for a lot of unforeseen expenses. Now the debt
is blossoming and the company is taking in revenue through
a part of your income. And if we eliminate that,
what other mechanisms do we have to pay down the
debt interest and to pay off the debt and to
fund the company's continuing security infrastructure. I don't see how
it's possible. You see what I'm.
Speaker 3: Doing there, right? Yeah, Well, so you're talking about income
from tariffs, and the perhaps a national sales pack or
maybe not a value added pack, but that I'm not
sure what the difference really is.
Speaker 1: Well, it's a consumption tax. It's a consumption tax. That's
that's you know, that's are I mean, a VAT is
a consumption tax. A sales tax is a consumption tax.
The tariffs or a consumption tax. So now what you
do with that is you cause the potential for inflation
to a degree because things will cost more if you
don't include the tariffs and the tax. Maybe not. You
cause a potential consumption slow down potentially, but then again
it's offset by the fact that you're not paying federal taxes. Right,
I mean, look at look as that way. I just
don't see is there anyone who's ever done that successfully?
State of Florida. Can we use that as a Can
we use that as a as a model maybe where
it's all sales TACs in the state.
Speaker 3: Tax Nine states don't have income factors, right, and those
states that boom during the past decade, while the heavily
packed loose states lack of a better term, but they
generally are blue. But not all uh have not grown
at the rate that the tax rates uh state path.
So is it just a function that you know the
Florida Kennethy, New Hampshire, Washington State, the North Dakota I
think maybe South South Dakota. I know them all off
the top of my head, but those dy Is it
just the function of people avoiding pactes and that everybody
saying we'd be in the same boat, or is there
more to it?
Speaker 1: I don't know. I think this is a really big
question because there's been discussion about flat taxes that never
seem to work, you know. But the problem is the
complexity of our current tax system is a problem. There's
no question about that. I think we'd all agree to this.
I don't care who you are that the complexity of
the taxes and the ability for people to work loopholes
is a gigantic problem. The corporate tax system is also
a problem. So simplification is I think the first step
right before we can get into the idea of just elimination.
I think simplification is a much more realistic way to go,
and then from there what we could do is try
to maybe merge into the idea of what ifs. But
I don't think we could do it. I don't think
it can be done with this massive debt overhanging we have.
I think it's the biggest problem we have right now
in our in our government and our economy that anybody
that knows anything, if you are a household that has
no debt compared to a household that has major debt, why,
why is why has the Biden administration been so hell
bent besides for votes, aside from that, put that aside
for a second, why have they been so hell bent
on reducing or eliminating disposing of student debt because they
know the fact that from an economic standpoint, again, besides
for votes, from an economic standpoint, when you graduate medical school,
law school, graduate degree, even an undergrad and you have
a massive amount of debt that's outstanding, it is going
to curtail your ability to really buy a house potentially
by goods grow. This overhang that you're going to have
for a number of years is going to be it's
going to be so constricting, it's going to be strangulating.
And in the debt that we have now, if you
want to expand that to the death that we have
now as a country is so preposterous, It is so ridiculous.
The only way we could do is inflate our ways
out of it, or blow our currency out, which is
basically what they're doing, right, the idea of devaluing and
really looking at a currency to break it down, which
they've tried to do. It's not working so well. Or
inflate our ways out of the bond situation. We tried
that for a number of years and we had COVID
and then we had massive spending that we had continued
massive spending. I don't think under Trump administration. I know
there's the DOGE, I get it, the Department of Government.
What's the government efficiency?
Speaker 3: Right?
Speaker 1: I don't know if that's going to really two trillion
seems a little bit far fetched. But maybe they'll find
something somewhere that they could say, have a few hundred billion,
which would be great. I just don't know if that
is going to be enough with we go, but that's
what we need to do.
Speaker 3: But if you're not touching Social Security or Medicare, then
your hands they're kind of tied from the get go.
But if you would just assume that for all the
other departments, somewhere between thirty to sixty percent of the
money is wasted, and even in social Security and Medicare.
There are hundreds of billions of dollars a year of payment,
wrongful payments that shouldn't be made.
Speaker 1: That's a problem that I agree with that. I agree
with that whole industry, the prescription industry, the Medicare. Social
Security can't touch Medicare. On the other hand, the efficiency, well,
there is fraud in socialcurity, but let's put that aside
for a second, because that's a whole different discussion on
how to deal with the fraud, right, But I agree
with you Medicare and fraud in Medicare by the way,
and just bloat, just stupidity. So that's going to be
a big issue, I think, and not to mention the
healthcare system in itself, and a lot of that's coming
to light right now. More so, I think the I
think the shroud has come off of the oh, you know,
it's healthcare and it's just what it is. Right, I'm
getting denied or I'm delayed, or you know, I'm going
to have to get some multi level of authentication or
or something involved with this. I think this whole unfortunate
murder of the un h executive, you know, CEO Brian
Thompson is awakening a reality that has been suppressed for
a long time, which is that our healthcare system, the
companies involved it, is a for profit. I mean, when
Obamacare came in, did you ever in a million years
think that the companies like Etna signa unh, we're going
to be extraordinarily profitable or was it like doing you
do it?
Speaker 3: They wrote it, they wrote the program.
Speaker 1: Well that's true also, but the idea was really to
give the people a better shake, right, It wasn't that
that that was the idea.
Speaker 3: Yeah, well don't work out. I mean, I didn't want
to get like into a political thing, and we've got
more but AI ties into it. But we've never had
a national health debate in the United States since since
they basically banned cigarette advertising back in sixty all right,
and created this educational feedbacks smoking bad, it will kill you.
Back when we were kids growing up andrew half people
out there smoked. Now I was one.
Speaker 1: I was one of them. Marlboro, reds Man, Marlboro same here.
Speaker 3: I love that, you know, and in wind.
Speaker 1: Chapter let's stick that's something right there.
Speaker 3: Dating myself. Wow. So we have this massive educatational thing
and there's definitely left people dying from lung cancer and
smoking related diseases than were in the past. Part disease
still number one killer. But bringing an RFP junior. Whatever
you think about the guy, and I'm not a personal
fan ofies, but make America healthy again. That will go
a long way towards the fixing the healthcare And it's
kind of a long term educational investment. But we're seeing
these companies who you know, usually in the most languages,
for love, that's like tons and tons of words. But
in the English language, we have more words for sugar
than we do for love. You know, when you look
on the side of a package, they have twenty five
different ways of saying we're putting sugar in here, and
it's bad for you. So that's educational thing that will
solve the problem in the long run. Because eighty percent
of most diseases, chronic diseases, which is what soaks up
the bulk of netticare dollars, come from lifestyle, which means
the people don't exercise and they eat garbage.
Speaker 1: Right, hold on, hold on a second, I just got
back from Europe. You know you're going down this path.
Let's talk about it.
Speaker 3: Right.
Speaker 1: So I just got back from Europe. You look at
some of the things that are going on with regard
to the US what we have in our food, I mean,
the processing, the prob let's just leave it there. Let's
just nutshell, the whole thing and processing of food compared
to other places. Now, life expectancy has increased worldwide over
the years, right. I mean when I was a kid,
it was like, you're dead at seventy. Now seventy is
like the new forty.
Speaker 3: Right.
Speaker 1: So the fact is that one of the things is,
you know, a healthier lifestyle and drugs and all that.
But we still have the problem here in the United
States a process food and people don't care McDonald people
are going out to eat these fast foods. They don't
that we're lazy, we don't want to make food. We
don't want to be what they do in Italy. That
somebody's preparing your food. You know, somebody in the family
is actually preparing a meal. What do we do We
get these tavola or we get these other kinds of
things that says, oh God forbid, I have to cook,
but I want to make it look like them cooking.
So send me a package recond. Yeah, they put in
the microwave, and that's a big problem. It's gonna take
years to unwind into reprogram our. I think our collective
understanding of what's good and what's bad. You know, it's
pizza a really good meal for us. I mean, it's
probably better than some of the stuff you see in
the store that's been processed, right.
Speaker 3: Better than Big Mac. Right, but maybe it depends. Like
the new pizza pop places open up down the street
from the here in Florida, and all of their stuff
homemade the other to homemade, non GMO. The pasta is
made fresh daily, the sauce is made from scratch, but hey,
tomato sauce has sugar in it, but nonetheless not a
ton of it. And yeah, it's healthier than.
Speaker 1: That's that's natural. I natal from the tomatoes trend.
Speaker 3: The trend is the healthy because what we're seeing. We
follow trends because that's how we make money. AI is
the trend where I think the profits will be enormous.
We'll talk about that. Healthy dining choice is educational programs
so that you know when you're eating food whether it
has potential to arm you over the long howl. Because
that's the thing when you're eating big Macs for twenty years,
you know, it's one thing when you're smoking a cigarette
that every cigarette takes six minutes off your life. That
was what they sold us back then, which may or
may not have been true. But you don't think of
each big Mac that I consume with fry and the
super size the coke, it's taking minutes off my life
every time I eat it, right, right?
Speaker 1: So from a stock so let me just weave this
into the area if you because it is an investment show, right, So,
so is this something that we should be shorting McDonald's.
Speaker 3: I don't know.
Speaker 1: I wouldn't bet against that, right now, Chipotle? Do we
short that? I mean, it's had problems. And then you
add in the lily or the the A A Y
C and hib or drugs out there that are caused
you know that are much more popular.
Speaker 3: Hey, well, you know and bit controversy over those weight
loss drugs. I've taken them, picked myself and looked fourteen
pounds and didn't have to keep taking it forever. To
keep that weight off again, I exercised like a fiend,
so I had zero muckle lots. In fact, my weight
resistant actually increased while it was eight though. Yeah, if
you're a prapped potato and you're going to passively lose
weight that back on the pack can walk ev right,
then yeah, you're gonna lose muffle and you're gonna lose fat.
But the very thing, the very act of lowering your
obesity or overweight state, it's healthier, all right. Now. You
don't want to be taking these drugs the rest of
your life, but anything that will do that to help
you in your goal. Are trolling your weight, as long
as it's not abused and it doesn't become a lifelong dependency,
is a good thing in my opinion.
Speaker 1: I have a little bit of disagreement, by the way.
I don't know necessarily that if in fact there are
no significant side effects, If if if there are no
significant side effects, and in fact, if it just does
regulate the body's ability to metabolize food better, I'm not
exactly sure if in fact it's not something that can't
be taken for a long period of time. One of
the one of the problems we have here. We know
that diet high glucose is a real big problem, and bigger,
bigger than just simply saying well, I have diabetes. No,
I'm talking about the impact on other organs of the
body and what it does. And they'll be CD in
itself or at least overweight.
Speaker 3: You know that.
Speaker 1: Everybody's like, ah, I'm not obese. Okay, you're overweight. You're
not skinny as a rail. You got too much to
carry it on your frame. That also is around the heart,
the fat, right, all that that that that is a
problem and at least to other other issues. And in fact,
if if this is the miracle drug, if if IF,
whether it's the semaglutides or whether it is the trisipotines
or whatever.
Speaker 3: You know, companies do what called criple g, which is
to be better than evmpic or manjara. That's zech I fiery, Yeah,
criple g. It's in the evolution from theide and it's
from Lily.
Speaker 1: Is that from Lily?
Speaker 3: I think? Yeah, we're interesting.
Speaker 1: They just increased their share, buyback and dividend by the way,
just recently.
Speaker 3: Yeah, and you know, like, look, i've fast, did I've
lost weight naturally? All right? I lost weight when I
had COVID and uh, you know, and I kept the
weight off he is keeping it off. You don't want
to go yo, that's really bad for you. But anything
that aids in that thing that doesn't do significant long
term damage.
Speaker 1: Yeah, that's what I'm talking about. So that's why the
stock is. That's that's why lilies died so well.
Speaker 3: Yeah, easier to keep the weight off than it did
to loose and that he that's what they don't talk about.
But yeah, we were eating healthy food and we weren't programmed.
You know, the original biohacking, in my opinion, started with
the barbecue hated hip because they figured out that they
could put in sugar, salt, and vinegar and it would
basically turn off your society s which remember you can't
just eat one. And that's the thing, all these flavored
the potato chips. And then we have the advent of
the food kitchen, you know, the corporate food kitchen that
you know, formulate the things so you just keep eating
and eating. And you know, they got rid of pain
sugar which which would trigger satiety switch in your brain,
and they gave us hiproof post corn syrup. So this
is a friend. Let's get to AI. That's you know,
we know that AI is rapidly evolving. You and I
both use it in our work. I've just used it
to help me write a book of my interviews with
a famous economist named Martin Armstrong. Fourteen years work of interviews,
I managed to write a book in several weeks. And
I've got a f chat GPP. What edd ten industries
where AI will have the most section, And I'll just
let me just list them and then we can go
over with pet health care, transportations, not kidding, finance, retail
and e commerce, manufacturing, education, we'll see about that one, legal, definitely,
customer service, media and entertainment, and agriculture. So of the
top ten, which do you think of the which three
would you say the most significant?
Speaker 1: So healthcare I think is really interesting that one, particularly
for example, brittiology. Right, so let's just break it down
to its simplest terms. Right, take an X ray, somebody
looks at it, Okay, what's the deal you brooke your
late whatever, right or something of that age.
Speaker 3: Or an MRI.
Speaker 1: You're taking an MRI, it's reviewed and oh there's a
spot or there's something going on, what is it?
Speaker 3: Right?
Speaker 1: Well, that's great. What about the things that are missed?
Speaker 3: Right?
Speaker 1: What about the it's a human eye that's looking at something.
There's an X ray of the femur, of the tibia
of I don't know what your ribs, whatever it is,
And all of a sudden, you know, there's something to
the bottom right of the screen. We're not quite sure
what that is, and it's overlooked, whereas AI or better
computing has the opportunity to look at that and say, well,
you know what that looks like this that I have
in my memory bank. So it's not just relying on
a great radiologist, right, So a great radiologist may have
found that, well, your average radiologists may not have. So
the thing is that you are now instead of going
at a random radiologist that may be the greatest or
the most, the worst, or an average radiologist, you have
the memory bank and the ability that is constantly changing
and updating of an AI radiologist. Let's call it, right,
doctor AI radiologists to now be looking at your X
rays or MRI scrans, your cat scans, whatever whatever that
particular situation is, and having all that other fingertips to
give you a better diagnosis, then give it to the
doctor and let them then further bring that to what
has to be done. So I think that's this one
little aspect of healthcare. How about drug interactions. So you
have a situation where the pharmacy is dispensing a particular drug,
and then there may be something in the system abou
drug interactions, but maybe there's more information that can be
fed into there about your health history that would say no, no,
this drug is not going to work with that drug
because of this to be better stuited with that drug,
right or.
Speaker 3: Whatever it is.
Speaker 1: So there's a whole host of things that you can
look at from an AI standpoint in the healthcare area.
That even includes better robotic surgeries, that includes potentially better
nutrition guides. I mean, the list goes on, because what
you're doing is you're centralizing the knowledge, and then you're
enabling the ability of that centralized knowledge. Let's call it,
you know, doctor health. Let's just keep it at that
to then train and look at all the different things
that are going on and utilizing the inputs to further expand.
So now instead of having pick your number of doctors
out there in a particular space in a particular specialty
that you may be just doing it and going to
that doctor due to proximity, which is yeah, ninety nine
nine percent of why you're going to that doctor's proximity.
Speaker 3: Right, they're just super market right now.
Speaker 1: Some doctors are different. You know, there's maybe some specialists
that you want to visit in Tampa or there, or
New York or California, wherever it may be. But generally speaking,
you know the dentist I go to, I just not
schlep in thirty five minutes to go to this guy
when these people are five minutes away and they did
a great job, and if something goes wrong, I'll schlep.
But that's the number one, well one of the top,
not number one, not in the top. I think customer
service where there is none in some places. It used
to be that you had a phone number that you
would call all the time, make it very easy. Then
there was the advent of an email, right, you'd find
it somewhere or it would be a button. Now websites
don't even have anywhere for you to call. You can't
call anybody. Can you call anybody for customer service?
Speaker 3: You have to dig.
Speaker 1: You have to dig pretty hard, right, it's at the
bottom three clicks in with first chat to us. Then
do you really want to make a phone call? Do
you really want to speak to somebody? I have the
entwest now if we can get used to and get
a good reacting chat pot that actually has answers, not
just at the end of it, I'm sorry, you know,
not just a stoling mechanism that most of these help
support systems are. And and I think that could be
tremendously helpful for individuals that need it and companies that
don't need to spend the money on. Unfortunately places that
we've we've banished them to, like India and areas outside
of the US where you have the supports centers. Third
finance is interesting, but for other reasons. I think there's
an interesting aspect of finance, but I think it's compartmentalized.
I think people still are going to need if we
go all AI for finance. I just I don't I
don't see it. It just then then it just it
neutralizes everything. And I just don't see the ability for
anybody to have better performance than anybody else. And what's
the point if that's not the case. I don't see it.
It's a neutral point. There are some areas that will
be very helpful from a research standpoint. Clearly, being able
to review and research a stock I mean obviously a
lot faster, being able to look at historical trends and
analyze those a little bit better.
Speaker 3: No question.
Speaker 1: Legal contract writing, clearly, I mean it's a lot of
this can be done today. But if AI really comes
out in a better way to make it a much
more usable and use a friendly way, I think that's
that's great.
Speaker 3: What are some of the other ones you mentioned, you know,
just legal, because I'm a recovering attorney, there's no institution
that it's less efficient than our court. They're the least
efficient means of resolving dispute. The way they're managed. The
judges or you know, the judge average starts works half
a day. You know in some places be surprised and
the case is keep piling up and piling up.
Speaker 1: Well, what about the law officers, Kerry, What about the
fact that what I deal with a lawyer, I'm dealing
with three layers and three bills at the same time. Yeah,
I mean that's absurd. Right, you send something in, the
administrator copies it, and you've got to be five dollars
for that. They send it back to you. Thing, thank
you that's a five minute charge. Then they got to
go through the next person, the next person, and everybody's
doing one piece is three times the charge it should be.
Speaker 3: Well, I always say anyone who says that crime doesn't pay,
obviously path the bar exam so law and the inefficiency
like the purpose of the judicial peaceably settle dispute among
the residents and the inhabitants of the country. And when
it starts failing in that role, the you know, bad
things happened to society. So anything that can help make
the judicial that's the more efficient. And then you also
have that situation where big big X Y Z operation
and little John Doe. You know, John Doe has been
legitimately agreed, but he can't order to go up against them.
But now maybe with the upcoming AI, he'll be able
to do most of it on his own, and then
the cord will be is an AI to figure out
what's going on here, right right, right?
Speaker 1: I agree, I agree. Maybe maybe it's it's an interesting concept.
I just think that that there's a lot of other
industry areas that will create more efficiency. Some of them
are like, yeah, I would love that to happen. That
would be great. You know, I mean that would be wonderful.
The others that well, man, why hasn't that happened already?
In the efficiency will be cost savings and that can
be passed along or made companies more profitable. That that's
the thinking right now, right we're in the stage of
AI that anybody's excited about the fact that the opportunity
is there for creating cost efficient see across you know,
many places with the idea once again that people are
not going to be displaced, which I do not believe.
I think that we continually displace people and it's like, yeah,
able to get a job somewhere else, Okay, where go
on technology? Doing what coding? Well wait, didn't we just
talk about the AIS and taking over the coding.
Speaker 3: Yeah, they could go right.
Speaker 1: I gived example of something DH Unplugged. Each and every
week we have a show John cy Devoric myself, you
listen to that, I know, and we have cover art
for each episode. So in the past we've had various
places do covered art or we would we would have
listeners with sending cover art or would use you know,
not custom but you know, off just just a some
something that would represent and we put some words on it.
Whatever Now chat GPT, I need a landscape podcast cover
art with two guys talking into a microphone. It's Christmas time. Up,
it's Christmas time. The money flying everywhere. The name of
the podcast is DHM. Make one of the players, one
of the one of the podcast hosts tolls in the
other blah blah blah blah, and then you get three
different versions cover art done.
Speaker 3: Amazing It lest than for a five minutes.
Speaker 1: In less than five minutes.
Speaker 3: I used to pay somebody between twelve to fifteen hundred
dollars a month to do my show notes if I
do one show a day on average, sometimes a little more.
And then I got the note taker for Zoom, and
then I fed the note ten to chat GPT. It
gets done instantaneously. It's ninety five percent of the way there.
I can fill the rep myself, and my workfloads become
so much more efficient. And you know the thing is,
we see it happening now, but we have no idea
how fast it's going to happen. Andrew, like, I will
just tell you, like, I'm a proud Tesla earner, not
because I think I'm saving the planet, because I love
the tech driving a diperience graded car, ever, and the
abidity to continually upgrade a product that normally you would buy.
You'd buy the car, and then from that.
Speaker 1: Point on it just got worse and worse and work
I guess, I guess older.
Speaker 3: Yeah, the test what never happens. It's always something new.
Now that full self driving. Now, I've been doing it
for about two and a half years, and I said,
if you'd like to let that thing do the full
self driving, you'll die back two years ago, three and
a half years ago, maybe three now now I had.
I just upgraded, updated the latest version. I haven't gotten
to use it yet, but I've been watching videos where
the thing does you turn, You push a button, the
backs out of your car, out of your driveway, out
of your garage, closes the garage and takes you where
you're going to go, and then you point to a
space in a park. And that's But the gulp of
the improvement didn't happen over the past two and a
half years. It happened over the PEP thread to four
months when the AI started watching Louvie of people driving
instead of trying to program for it, and it learned
on its own and I think in another six months,
a sure we could have FSP. Does that make pet
Flow buy or does that make it easier for somebody
else come along and replicate what they're doing, some Chinese
company or whatever.
Speaker 1: I mean it's truth, is that does it make Tesla buy?
I mean since the well since the election, test has
been going vertical right over four hundred dollars per share
right now on no new news and in fact, on
the potential for you know, concerning trade action against China
or with China, and fuller full self drive FSD doesn't happen.
Is it getting better? Is that why?
Speaker 3: I mean?
Speaker 1: I think it's all about really the regulation and favoritism
of what Musk is going to get because of who
he helped get into the White House, Right, That's more
so what it's about. But but but Tesla, I don't
think it's worth the value that is worth right now.
Speaker 3: There's no way.
Speaker 1: I mean, the company was actually in the two hundreds
not too long ago because the numbers that came out
from buying. Now, will all the Conservatives turn around and
all of a sudden love elon because he helped and
buy Tesla's At the same time, the Trump administration is
already talking about the incoming it's talking about removing the
tax credits, so you should which they should. Well, that's
not great for Tesla and probably won't matter that much.
Speaker 3: You know. The other thing with Tesla though, is that
through their AI and through their system, they continually lowered cost. Yes,
for the most part, lipping plunging lipping, and prices didn't
hurt either, But the average cost of the PETLA is
like less than it was the three four years ago
to produce it, right, And that's something that that American
industry largely has been incapable of during my lifetime. Yep,
I hear you so interesting thing. I guess it actually
the AI of all the industry that everything that we
deal with day in day out. What industry do you
think will be impacted the most by AI?
Speaker 1: I think healthcare is well technology, but put that aside,
that's obvious that that's I don't think we have to
talk about that. I do think, I mean, finan it's interesting,
like you said, you know, healthcare is probably the number
one that I could think off of the top of
my head. That would be transportations, interesting, infrastructure not so much.
You still need you know, see any picks and shovels,
people breaking their backs to do things. I mean, I
would think that healthcare could be a significant overall significant.
Speaker 3: Yeah, I think you're right. I think you're right, and
on multiple level. The ability to get to gettant up
to date information on what you're eating right and and
the drugs you're taking. And then the ability where doctors
to not make mistakes. Maybe we'll be having the robots
in the hospital and that will be.
Speaker 1: We have them, we have them already. But what's interesting,
you know, if you want just confirmation of this, just
looking no further than Apple and why they are all
in on the Apple Watch and the healthcare and what
they're doing with blood and pulse and O two SATs
and everything that's going on, everything that's going on with
the Apple Watch. I one day will have an Apple
Apple Watch. Right now because of these and my inability
to see anything, I think it would ignore the hell
out of me having to put on glasses all the time. Yeah,
well yeah, maybe you can see better than I can.
But h but that's another thing. I mean, we have
a lot of things happening. For example, one of the
greatest things that are happening right now. Is the innovation
is happening so fast. The old cataract surgery where you
replace your lenses because if your cataracts is now available
to anybody just to replace your lenses and you get
perfect vision. I have three friends that have done it
perfect vision.
Speaker 3: That's called lens swopping. And yeah, I looked into that,
but I've had some other issues with my eyes. I
don't want to met with it traumatize my eyes. But
basically the rips are extremely low. It's expensive, but you
can see the day when when it's like, well, you
have you have to do it after a certain age
when your eyes stop changing. You can't swap lended for
like a eighteen year old got lapsed for the final
pick my year old. But you can see, you can
see where it's call headingch So how do we, using
your approach as the disciplined investor make money off of
the AI trend? Is there a way to make money?
Is it too uncertain and we just don't know? And
all the all the easy money has been made up
of the video I.
Speaker 1: Mean right now, right right now, the picks and shovels
and videos a m D. By the way, we're short,
just as a full disclosure were long in video short AMD.
There are a lot of long Microsoft. The players go
loong Google. These are the players that have the picks
and shovels right long Amazon. These are the names that
you want to be looking at in the first stage.
We're in the first stage about it, where we're in
the early stage of this how it how it goes
from here. There's a bunch of companies that are saying
that AI like a m D. They're not. That's why
you know, we show them at one fifty eight. They're
in the sub one thirty right now. And you look
at the opportunity from companies that are providing things like
a Dell. Opportunities are enormous for service space, for buildouts,
for what they have to do to generate this. The
utility companies major play. You look at the SMRs, the
small modular reactors for nuclear energy. You look at the
utilities for their ability to basically provide the electrical that
needs to be utilized to run these massive energy sucking
computer systems storage facilities that are being built. That's another
play that why utilities are generally close to but not
at old time highs or fifty two week highs amazing.
Who would have thought that in an interest rate market
that has been pretty much stable, in a market that
people want growth. I mean, we're going after the most conservatives.
I mean utilities.
Speaker 3: I would think, right, your grandfather's utility.
Speaker 1: Widows and orphans, Right.
Speaker 3: Yeah, it's ate off the dividends, big dividend, I mean
one that I like that I actually own and I'm
not telling anyone by it. It's appreciated nicely over the
past six months. Or Dominion, And the reason I picked
them is because they're Northern Virginia, Virginia's electrical utility. And
who's the biggest user of AI or he's got to
be a government and the intelligence Langley Virginia and that
whole AI intelligence infrastructure around them. And I read an
article recently that if you want to build a data
center in Virginia, you have to make a reservation with
Dominion two years with vamps do that.
Speaker 1: Right, And that's why we want to vollnteer. By the way,
who's AI for the government or governments? And that's why
I Pollunteer, which was an underloved name for a long
long time, has really look at that stock has done
incredibly well for us, for our clients. So actually we
trimmed a little bit of that. Yesterday or the day before,
we triamed a little bit of our profits. It's just
with such a magnanimous move that we felt that we
should take a little bit off the table.
Speaker 3: So here's the question for you, Andrew Win, You a
buy and hold die or you when do you sell?
Obviously you're rousing money, you're going to cut your laws,
But when do you sell when the thing is making money?
Like and vidiot, you just set it and forget it.
Speaker 1: So we have rules. We have to have a consistency
of earnings, consistency of growth of revenues. We have to
have high what's called Roe return on equity. We have
to have a certain margin expansion. All these rules go
into play. You don't make any of those. If in
totality is fifteen rules. Any of those that you don't make,
you're out. You have to be the cream of the crop.
With the equities that we own. Within our it's called
the discipline investor manage growth strategy. Inside that strategy, we
could have thirty stocks, we could have sixty socks. And
the more stocks that we have, the more allocation we
have towards equities versus For example, Palanteer is a as
we call it, an alpha position that is something that
we will trade around in Nvidia, Google that I mentioned,
Microsoft that I mentioned are names that are part of
the Strategies core filtering system. So you know, we add things.
We had a couple of interesting adds this quarter. But
if you don't make it, you're out. We've had in
Vidia for a long time. There was a time it
was out, but generally speaking for the last few years,
and Vida has been in our portfolio. We trim it
every quarter. If it grows dramatically, we'll trim a little
bit of off, take the profits and rotate it back
into other things that we're buying. So it all depends
on what particular area we're working. Or we work on
the trading side of our portfolio or for stocks uh
in the manage grows strategy because it's separate than our
global allocations.
Speaker 3: Or are we.
Speaker 1: In the trading side of it. Are we in the
for AMDs trading position for example, or are we in
core positions.
Speaker 3: Do you care about dividends the Do they make any
difference than your Nope, not at.
Speaker 1: All, there is a gross strategy. Dividends are really not
something that we will rely on. It has to be
the basic tenets of certain levels of growth on a year,
of a year, quarter over quarters, a time periods, of earnings,
of revenues, of consistency of margin expansions. All this is
all these consistency points we have to have to show
us the management can not only say something but deliver
and that they're actually doing.
Speaker 3: It consistently over time. Yep. You know, one one thing
we never even really talked about with the AI and
all the technology, it's howthing, you know, how thing The
way we build up now has definitely been impacted by technology. Look,
but I still take a year to build a big
half six eight months. And you know, I think that
new material that AI will create and new methods, and
you know, we've had stuff where you like cats and
plate and then you know, precast concrete panels and all
that stuff. But I think we're gonna we're gonna see
a huge boon there as well, and robotics and all
that might very well bring down the cop All right,
So Andrew, tell us where we find you, how we
connect with you on the web.
Speaker 1: Yep, just go over to The Disciplined Investor dot com.
Look me up Andrew Horowitz Investor or something like that.
You know, you can find me on the site. There
is all the information about our various strategies. That two
podcasts that we do per week, The Discipline Investor DH
Unplugged as well, which is pretty fun.
Speaker 3: Uh.
Speaker 1: We have a lot of guests on We've been doing
this since two thousand and seven. The podcast one of
the original podcasters out there in the area finance.
Speaker 3: You got maybe I started in twenty ten and I
thought I was ahead of the waves. Hey, well, anyway,
we'll have a link in the show that's this interview
on Financial Survival Network dot com. And we just asked
that you sign up for free newsletter like over sixty
thousand other f f END community members. And if you've
got a question for Andrew myself, shoot me an email
kl Kerry Lets dot com. Andrew always a pleasure. We'll
talk to you again real soon.
Speaker 2: All right, have a great holiday, Thanks so much, Kerry,
Thanks for listening to Carrie Let's's Financial Survival Network your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial survival network now more than
ever
Speaker 3: M