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0:00:08 you hear that oh paid and done that’s the sound of bills being paid on time but with the bemo
0:00:16 eclipse rise visa card paying your bills could sound like this yes earn rewards for paying your
0:00:22 bill in full and on time each month rise to rewards with the bemo eclipse rise visa card
0:00:27 terms and conditions apply i’ve read through a decade of your research to figure out what the
0:00:32 best investment is so anyone can get rich in the future and you predicted that this will grow by
0:00:40 at least 5 000 yes and my conviction is so high because of what i do on a day-to-day basis is there
0:00:46 a woman on planet earth that manages more money from an investing capacity than you maybe not i’m
0:00:52 overseeing nearly 30 billion dollars okay so i might have 500 what should i be doing with that
0:00:57 so this is all you need to know kathy wood built a multi-billion dollar fund by spotting
0:01:02 trends before anyone else and now with over 40 years of market insight she’s showing you how
0:01:12 and where to invest in history and this incredible rate of change is making people uncomfortable but
0:01:18 if you are on the right side of change investment opportunities and job opportunities are going to be
0:01:24 enormous but people don’t know what to do for example many people think apple is a very safe
0:01:30 investment it’s probably going to be disrupted by artificial intelligence but yet tesla is going to be
0:01:37 the biggest you’ve invested just over two billion in tesla yeah because tesla is the largest ai project
0:01:45 on earth so ai has to be a top priority not an afterthought so i’ve got questions what’s your top
0:01:50 10 public stocks that anybody can invest in what’s the philosophy towards investing that will make one
0:01:56 rich over time and then if i want to invest in ai how should i be investing my money according to our
0:02:03 research these investments will go up more than tenfold in the next five to ten years and create
0:02:10 incredible opportunities for investors so number one quick one just give me 30 seconds of your time
0:02:16 two things i wanted to say the first thing is a huge thank you for listening and tuning into the show
0:02:20 week after week means the world to all of us and this really is a dream that we absolutely never had
0:02:25 and couldn’t have imagined getting to this place but secondly it’s a dream where we feel like we’re only
0:02:31 just getting started and if you enjoy what we do here please join the 24 of people that listen to this
0:02:37 podcast regularly and follow us on this app here’s a promise i’m going to make to you i’m going to do
0:02:42 everything in my power to make this show as good as i can now and into the future we’re going to
0:02:46 deliver the guests that you want me to speak to and we’re going to continue to keep doing all of the
0:02:49 things you love about this show thank you
0:02:59 kathy wood is there a woman on planet earth that manages more money from an investing capacity than you
0:03:10 well there’s probably not someone overseeing yes nearly 30 billion dollars but i know there are teams out
0:03:19 there including women that manage maybe a lot more than that what is it that you do invest in companies
0:03:26 that are going to that are technologically enabled and that that are going to transform the world as we
0:03:37 know it robotics energy storage artificial intelligence blockchain technology and multi-omic sequencing
0:03:43 in the life science space the last is the most complicated and how long have you been an investor
0:03:52 i started when i was 20 years old at a company called capital group and i was introduced to the firm
0:03:58 by art laffer now art laffer he’s one of the most important economists of our time he created something
0:04:06 called the laffer curve he’s advised most presidents since president nixon and he’s advising president
0:04:14 trump as well and how is these five big innovation platforms that you speak of how is that going to have an
0:04:22 impact on the average person’s life like why do they need to know this stuff how is it going to change their
0:04:30 decision making and change their career and now that the world is moving so quickly into this new world
0:04:38 and bitcoin has become so successful an investment many people are trying to figure out okay how
0:04:46 how do i get involved with the new world and when i say get on the right side of change we think there’s
0:04:53 going to be a lot of disruption to the traditional world order when i say that in terms of people
0:05:00 understanding what i mean i think many people think apple is a very safe investment because huge hoard of
0:05:11 cash very successful smartphone you know number one market share of smartphones in terms of profitability by
0:05:20 far and yet we can tell you and this is one of what’s called the mag six that led the stock market over
0:05:25 the last few years the top six stocks the top six stocks the market was very narrowly focused on
0:05:34 this ilk of stock and we were saying you know what apple is probably going to be disrupted by artificial
0:05:43 intelligence and one of the reasons we started asking questions very early is what is the ultimate
0:05:51 mobile device ultimately it’s going to be an autonomous vehicle apple should have been all over that
0:05:59 and they were trying and we saw one management turnover after another this is an ai project and what we were
0:06:08 learning as they were turning that team over uh time and again is they they weren’t getting ai right
0:06:17 they were not positioning correctly you’re concerned for apple i think apple it has so much cash it has such a
0:06:25 loyal customer base uh it will be fine but maybe it’s revenue growth has slowed to almost nothing
0:06:35 and so maybe it’ll be a mature cash cow that’s not what we do we invest in technologically enabled
0:06:44 disruptive innovation ai is the biggest technological disruption in history and if they’re not going to get it right
0:06:50 we’re not going to be there so if i want to invest in ai if i agree with you kathy and i say do you know i think
0:06:55 i think you’re right that ai is the biggest technological wave coming into shore and the biggest opportunity
0:06:58 how should i be investing my money
0:07:02 in in your view how are you investing your money to capitalize on ai
0:07:06 many people used to invest in ai through one stock
0:07:15 that was nvidia that was the check the box i own the gpu the chip manufacturer which is the most
0:07:26 important uh chip manufacturer in the ai age and its valuation meaning its price relative to earnings
0:07:34 um really got up to very heady levels and we were saying at the time well if nvidia’s valuation is
0:07:41 correct there there there are going to be a lot of other winners who are they uh well our largest
0:07:50 position in the flagship strategy a rkk is tesla and as we were trying to help people understand
0:07:58 why we were swapping away from nvidia to stocks like tesla and palantir which is a software provider
0:08:07 um we were trying to explain that this new world around ai is going to happen very quickly
0:08:17 and uh tesla is the largest ai project on earth uh i posted that on x and elon liked it so it must
0:08:27 be true but it is true if our research is correct uh we believe that um the entire ecosystem
0:08:36 system associated with autonomous uh taxi networks is going to be worth eight to ten trillion dollars
0:08:43 in terms of revenue generation in the next five to ten years and if you want to put that in context
0:08:51 the the entire gdp of the world today is about 130 trillion so 10 trillion is going to move the needle
0:09:00 tesla are launching their first cyber taxi i believe in austin in june potentially yes it so the cyber cabs
0:09:09 will launch next year but in austin in june those will be model y’s and i’m looking to buy another model y
0:09:19 because it will in effect be a cyber cab and if i chose to i could have my model y drive me to work and then
0:09:25 let it out for the day and earn money on it have it pick me up at the end of the night and some people
0:09:28 will do that and tesla will provide the platform for that
0:09:35 i think a lot of people don’t realize just how much of the economy is about driving yes so taxis
0:09:39 deliveries yes these kinds of things it’s a huge is it the single i think it’s the single biggest
0:09:46 employer in the world yes transportation transportation broadly defined yes and and it’s not just on the
0:09:55 ground of course uh as we’ve studied uh autonomous taxis uh moving forward uh we believe the cost of
0:10:04 transportation will come down fairly dramatically so uh in the u.s today an uber costs roughly two to four
0:10:12 dollars per mile um at scale now this may not be for five to ten years but this is the direction
0:10:20 that tesla certainly is headed uh we believe that tesla will be able to offer a service for 25 cents per
0:10:28 mile and because of that we think there will be much more congestion in the roads when you cut the
0:10:34 price of something you get more of it yeah and that led us into the air and so we’ve been studying
0:10:41 studying evtols um what’s an evtol evtol is an electric vehicle takeoff and landing
0:10:50 like a drone a drone but for for people yeah so we own archer in our portfolio and of course ai is a
0:10:58 part of this new world as well um and it’s a part of the defense world as well as we are trying to
0:11:07 save our soldiers and um and move out there with autonomous drones so autonomous uh mobility on
0:11:16 the ground in the skies ultimately on the water so so tesla so that’s one big we think that’s going to
0:11:24 be the biggest in the short term in terms of revenue generation the biggest application of ai we think
0:11:32 the most profound application of ai is going to be in health care because of ai and this is already
0:11:44 beginning to happen uh we are able to diagnose cancer with a blood test in stage one think about
0:11:53 that if you discover cancer in stage one you can save most people right and maybe even before stage one
0:12:04 uh why this is the convergence of sequencing technologies so dna rna protein sequencing uh technologies
0:12:14 and then the third uh technology that is breakthrough and already making a difference is crisper gene editing
0:12:23 the convergence of those three technologies is beginning to cure disease so a company called
0:12:32 crisper therapeutics which is one of the largest in our a r k g fund and in the top 10 in our a r k k fund
0:12:43 uh has developed a therapy uh to cure sickle cell disease with and beta thalassemia both of those are blood
0:12:51 related diseases with one treatment think about that now the preconditioning for that is gruesome it’s
0:12:57 it’s it’s it involves it’s almost like chemotherapy and which is going to change uh but nonetheless there’s
0:13:06 huge demand for it because you know these people go to the emergency room 10 to 20 times per year
0:13:13 for blood transfusions to save their lives of course they’re going to go through a tough regimen they want to
0:13:19 live a more normal life uh so it’s already generating revenue both both of those are already generating
0:13:25 revenue for crisper therapeutics and a company called vertex so there’s this well there’s three or four
0:13:30 different companies you’ve mentioned here tesla the other one was archer archer is the evital company
0:13:35 yes it’s your flying cars basically your drone cars yeah and crisper and tesla so if i start with
0:13:41 tesla you were bullish on tesla you were making big predictions about tesla before pretty much anyone else
0:13:48 out there i think in 2015 and at the time in 2015 you said that you believed the stock would get above
0:13:54 4 000 roughly right on the old stock yeah on the profile the stock split yes and you were right by
0:13:59 some significant margin um i think you predicted it would be 4 000 before the stock stock splits and
0:14:09 i think at its peak that equates to about 18 000 maybe 12 000 at its peak yes well in that region we we we
0:14:19 we were right about two early years or tesla would got to where we believed it would go two years before
0:14:30 most expected you know in 2018 and 19 many people as elon was just discussing and describing production hell
0:14:41 for the model three um many people thought the company would go bankrupt and uh and yet we knew that if elon musk
0:14:47 could create a reusable rocket that could land on a barge
0:14:57 in the water he would be able to figure out how to produce at scale the model three that was to us a
0:15:06 simple um conclusion now as in hindsight as we’re learning from tesla production hell and they themselves
0:15:12 were worried that’s why elon slept on the floor in the production factory and just became maniacally
0:15:21 involved which is how he works uh as uh so yes and now our prediction the stock is i’m not going to be
0:15:33 exactly right on this 270 280 uh dollars our prediction in five years is 2600 and 90 of that valuation
0:15:42 comes not from the electric vehicle but from this robo taxi platform uh because the electric car if you
0:15:49 think about it is you know a one-shot sale you know sell and hope they come back when they’re replacing
0:15:57 their car this essentially means that we’ll be driving cars that we can click a button and then it becomes
0:16:02 an autonomous taxi so i go on holiday i have my my tesla car at my house when i go on holiday the car
0:16:07 turns into a taxi and start chauffeuring people around it makes me money but also from the
0:16:12 consumer’s perspective that are trying to hail a taxi at any point i can go on my tesla app i press a
0:16:18 button a autonomous car comes to me with no one driving it and it takes me to my destination with
0:16:25 no driver at all right um and then the recurring revenue model i believe is you subscribe it probably
0:16:31 could it could it it could be a you could subscribe to the network or they could uh you know maybe it
0:16:37 could be either or subscription or a la carte if you don’t think you’re going to use it that much
0:16:47 so now when i’m here in the uk and europe many people do not believe what what you just said and and
0:16:54 they don’t because your regulators have not allowed fsd here i think they might
0:17:01 somewhere in europe i think they’re beginning to consider it maybe even in the uk here they
0:17:10 are considering it um in st petersburg florida where we’re based um i can go from my house
0:17:17 to anywhere and flawlessly the car will take me there now we still have to sit in the driver’s
0:17:27 seat for now but in june uh or soon thereafter when they turn the system on if regulators permit
0:17:34 right now we’re state by state i think that’s going to change so that we’ll have federal regulations so
0:17:41 that this can happen a lot faster one other thing about tesla though in that 2600 uh dollar number
0:17:51 we do not include much for humanoid robots now i this and and this is happening faster than we thought
0:18:00 um and the reason it’s happening faster is humanoid robots they are the convergence of the same three
0:18:11 technologies or innovation platforms as robo taxis robots robotics so actuators and so forth getting
0:18:20 them to work energy storage battery operated and ai so tesla’s way ahead of the game on humanoid robots
0:18:27 and yet we have very little now elon thinks that the humanoid robot business is going to dwarf
0:18:36 the robo taxi business and we think he’s right uh but longer term so as i mentioned we expect all in
0:18:44 around the world including china not just tesla but the entire ecosystem and eight to ten trillion dollar
0:18:54 market uh in the next five to ten years for humanoid robots uh we expect a 26 trillion dollar revenue
0:19:02 market now that’s going to be a little further along uh robo taxis will happen faster but it may not
0:19:10 be as distant as we were once thinking for anyone that doesn’t know humanoid robots are basically robots
0:19:15 that we’ll have in our home and at work so these are there was a video that i think um elon retweeted the
0:19:20 other day showing one of the human humanoid robots dancing dancing yes was that real i was like looking at
0:19:25 that video thinking surely that’s not real but he confirmed i believe that it was real yes yes now
0:19:33 when we went to the cyber cab event uh there were some humanoid robots dancing there but they were
0:19:40 tethered and they were remotely controlled yeah uh now cyber cab i think was about a year ago yes maybe
0:19:48 so since then they’ve been able to untether them and uh i do believe that those that dancing robot was
0:19:56 was um not tethered and not remotely controlled it was quite shocking to see a robot doing that because
0:20:04 if a robot can have that dexterity and mobility and then you overlay that with the ai technologies that
0:20:10 are accelerating rapidly it begs the question and the question is quite clear which is what about humans
0:20:21 yes um and just to put a finer you know note on this um elon will not be satisfied until these robots
0:20:29 can thread a needle so that’s where we’re going what does that mean for humans so you know the history of
0:20:39 technology is that it has been a net job creator throughout history but humanoid robots are getting
0:20:46 awfully close to what we do right so it’s a good question i i think creativity is a big part of that
0:20:52 ingenuity and creativity and you know i think there’s going to be a there are going to be a lot of
0:20:58 new inventions uh in the future so let’s see what those are but even today there’s something called
0:21:09 vibe coding have you heard of it okay because we’ve moved into the world of natural language programming
0:21:15 what is vibe coding for someone that doesn’t know it’s vibe coding means you know a natural language i
0:21:21 know we all know a natural language ours is english for the most part but it could be any language
0:21:30 um we’re going to be able to go to chat gpt or especially now they just launched i think last
0:21:40 week something called codex replit uh and anthropics fantastic for for um programming and we’ll say this
0:21:47 is what i’m attempting to do in english language and and i’ve seen demos of this just internally we we’re
0:21:53 going to replace some of our software that we’re buying from outsiders and customize it for us
0:21:59 because you know we don’t have to buy off the shelf anymore one size fits all i think there’s going to be
0:22:07 a lot more customization and personalization and creativity explosion here you know it’s interesting that
0:22:15 this is happening when the demographic profile of the developed world is as it is we have a very low
0:22:20 unemployment rate in the us i know the unemployment rates in europe and the uk have been dropping
0:22:26 to much lower levels than where they were stuck for years i remember thinking wow double digits
0:22:36 we have a demographic issue i mean if you if you watch what uh elon musk worries about the most he he
0:22:44 worries about the population implosion uh because collapse collapse collapse in population in the
0:22:53 developed world um because we’re not uh uh we’re not producing children above the fertility rate where
0:23:01 we are setting up for a shrinkage with china is going there japan is going there and so we’re going to
0:23:11 need productivity uh productivity to help us if we can’t find human beings uh okay so you’re so you’re
0:23:16 saying that the robotics and ai could actually fill the gap that we lose in terms of productivity
0:23:21 because our society is going to be like an inverted pyramid it’s going to be more elderly people and
0:23:27 less young people yes yes so the robots are gonna yes absolutely it’s productivity is going to be
0:23:35 essential so as we’re looking at real growth ahead and when you think about real growth
0:23:43 you should be thinking okay somebody’s benefiting from this um and i’m going to set what i’m going to set
0:23:54 up the number here uh by describing what has happened historically if you look from 1500 to 1900 and you
0:24:03 you try and figure out what real gdp growth was back then real economic growth um as best as uh brett
0:24:13 went in our chief futurist in consultation with academics can determine it was roughly 0.6 percent
0:24:22 per year and then we had the industrial revolution uh we had the internal combustion engine telephone
0:24:35 uh electricity and for the past 125 years real gdp growth has been three percent and and most lie
0:24:41 living standards have gone up over time some more than others i know that’s a debate but most
0:24:50 have gone up if we as we look forward based on the five innovation platforms around which we have centered our
0:24:57 our research and investing if we’re right real gdp growth in the next five years could accelerate to
0:25:09 seven point three percent and that gives you a sense of uh the economic activity wealth generation out there and
0:25:19 and what when when we are presenting to investors we are actually presenting to them not only because
0:25:26 they’re investors but because they have children or grandchildren who need to adapt to this new world
0:25:34 and our mantra in giving away our research which we do is get on the right side of change we also do
0:25:42 new podcasts um we we try we do a lot of outreach because we think this is a very important moment
0:25:51 in time uh seize the moment grab hold of these new technologies because that growth rate is more
0:25:56 than twice where we’ve been and if you are on the right side of change we think the opportunities are
0:26:04 are going to be enormous uh investment opportunities and job opportunities yeah i feel like i’ve i feel
0:26:15 like um i feel like i can’t figure out what how the displacement rate meets the creation rate so the
0:26:22 destruction rate of of current jobs will meet the creation rate of new jobs because many of these new jobs i
0:26:26 i guess there’s some of them we can’t predict yet i understand that but even the ones that we can’t
0:26:36 predict yet would need to be inherently human i need the skills of a human for them to be occupied by
0:26:41 by by humans um so what category of stuff is that like my girlfriend’s a breath work practitioner
0:26:46 she’s upstairs now with 10 women and she’s teaching them breath work okay so she’s fine yeah
0:26:52 like because they’re doing that in person whatever she’s fine well and maybe she’s not if people decide
0:27:02 to do that yeah on chat tpt but but if they want to be with a group of women yeah and you know learn
0:27:08 from an expert whom they respect there’s as much the social experience that’s going to become more
0:27:14 important relationships are going to become more important many people in our business i think are
0:27:21 going to be out of jobs because uh the business has become really nothing i shouldn’t be
0:27:28 this disrespectful and it’s not quite right but uh at all uh but you know so many are just hugging
0:27:39 benchmarks uh whether it’s s p 500 or msci world or the nasdaq that a machine can do that a machine can do
0:27:47 that easily and that is what passive investing is is machines doing it i think in order to earn a place in
0:27:54 the new world you’ve got to add a lot of value more value than a machine can so in our case
0:28:04 we’re saying okay well our stocks are not in those benchmarks uh and therefore you know they’re there we
0:28:10 are doing original research trying to figure out who they are and where they are these these companies
0:28:16 that are going to transform the world why can’t ai replace what you’re doing in terms of so and we
0:28:27 think about that all the time so ai can use pattern recognition it’s all based on history right it can use
0:28:36 pattern recognition maybe to do what we’re doing what are the three characteristics that define an innovation
0:28:45 platform for us the most important one is they follow something called rights law which measures
0:28:52 the learning curve how fast the costs are going to decline with this new technology technology is
0:28:58 deflationary costs fall over time and they’re passed through into lower prices or better performance
0:29:07 one or the other um that is the most important a machine can figure that out i’m sure but asking the
0:29:17 questions are going to be important like there wasn’t before 2014 when we started arc much on autonomous
0:29:25 mobility or evitals or for that matter ai ai had become science fiction there weren’t any breakthroughs
0:29:33 in recent years but then we got some breakthroughs so could so wright’s law is the first figure out that
0:29:41 cost curve decline and and see how quickly the technology can proliferate across sectors that’s the other
0:29:49 criteria criteria criteria criteria criterion here the technologies that we are following are going to cut
0:29:59 across economic sectors and apply uh to more than one group of people and then the third is that these
0:30:08 technologies serve as launching pads for new technologies so in the case of dna sequencing which was the base
0:30:19 technology we needed that before crisper gene editing uh could be created we needed to be able to understand
0:30:28 what was mutating in the genome where the programming errors were so that gene editing could come in and edit
0:30:34 out those programming errors and do you think in five ten years from now that unemployment is going to be higher or lower
0:30:45 in five or ten years um let’s let’s assume we don’t have a policy mistake and and a recession so just just steady
0:30:55 state i think it will be the same or lower and most of this is because those baby boomers are retiring
0:31:06 uh they come out they come out of the labor force and uh and the generations following them are smaller even
0:31:14 now what’s happening is uh we’re we’re passing through the baby boom echo meaning the children of the baby boom
0:31:23 that cohort was i don’t think it was any bigger than the baby boom uh the baby boom population do you think
0:31:31 there’s because of the speed of and the acceleration of ai the like just the length of careers has
0:31:36 radically reduced because you would go to like you’d go to school then you go to university you qualify
0:31:41 as i don’t know an accountant and that’s like a 10 15 year process you get a job as an accountant you
0:31:46 start working your way up but now with ai coming in these some of these jobs are being completely
0:31:56 annihilated extremely quickly at the same time vibe coding yeah is booming so i think what’s going to
0:32:01 happen and this will be very healthy for productivity we’re going to have a lot more experimentation and
0:32:09 people taking risks on themselves and maybe this idea of a corporation as we know it is going to change
0:32:18 radically you know crypto is enabling distributed autonomous organizations uh just like bitcoin
0:32:29 there’s there’s no no one governing it right uh that it’s a distributed network and you know let’s see how
0:32:40 how these do and how vibe coding and ai integrate into the crypto and i’m going to stop calling it crypto
0:32:46 because it really should be called digital assets world which legitimizes it more crypto sounds nefarious
0:32:55 digital assets is where you know more than young people and i’ll say young people are spending more
0:33:02 than half of their discretionary their free time online and so property ownership online is becoming more
0:33:09 important it’s it’s being legitimized by the way people are spending their time on this point of robotics
0:33:15 and ai your your biggest position i believe is tesla isn’t it in your fund yes um but obviously elon
0:33:23 decided that he wanted to go into politics oh elon the department of government efficiency called doge
0:33:29 so teaming up with trump to try and eliminate government waste now as an investor you must
0:33:38 not love that well i have two um i have because it did in two points of view of the company do
0:33:43 you know i have i drive a tesla when i go to america and it was the first time ever on the
0:33:49 last trip to america in january i live in la now um well i’m driving my you know my cyber truck it’s
0:33:55 full self-driving it’s incredible but for the first time ever i thought like i could be attacked so i
0:33:59 probably shouldn’t get a cyber truck i should probably get something else because i heard of all these
0:34:04 reports of people being attacked and so it was quite interesting to hear in the earnings report which i
0:34:11 listened to that there’s been this decline in revenue um in profitability in vehicle sales growth etc in q1 of
0:34:17 this year which i think even elon in that in that earnings call highlights is a consequence of him
0:34:27 him becoming political yes uh i think that surprised him um so i have many thoughts about this our
0:34:36 government has become so bloated it is scary and uh our indebtedness is growing and if we want to
0:34:44 remain the reserve currency of the world we’re at risk of of losing it and and on our tail is the whole
0:34:54 digital asset world right so um government spending is taxation it’s either taxation that’s going to
0:35:00 happen immediately or will happen in the future or will happen through inflation which is the most
0:35:08 regressive tax at all so i think his that the sentiment was was right in terms of you know getting in
0:35:13 there and seeing what technology can do for the government which is really what’s happening i’m
0:35:21 watching it in the fda how they’re starting to use ai it’s phenomenal what’s happening uh so
0:35:30 the question i usually get so i i’m very happy that uh half of the solution is understanding the problem
0:35:36 that someone is in there with that focus and determination he of course has said he’s stepping
0:35:43 away uh this month as a matter of fact to spend more time with his companies which you must be happy
0:35:50 about well of course i’m happy about it but i i have with the exception of this political dynamic i don’t think
0:36:00 that elon uh not being there on a day-to-day basis is what has caused the problem in the first quarter
0:36:08 it was much more macro we had a negative quarter in real gdp growth in the first quarter so macro
0:36:15 which is hitting everyone and the overlay of this political dynamic the news cycle thank goodness moves
0:36:22 fast and so we’ll we’ll be through that i think and by the way there are news reports even this weekend
0:36:33 saying those who were feeling about him you know as it relates to doge and you know one party are having
0:36:40 a change of heart because tax rates are going to come down because we’re being more disciplined on the
0:36:52 on the government spending side elon’s way of managing his companies is to attract the best and the
0:37:00 the brightest not only scientists engineers but also business people uh they these are people who want
0:37:10 to solve the hardest problems in the world um he sets a timeline that seems uh reasonable to him for
0:37:18 milestones to occur and he doesn’t interfere unless they start missing those milestones or the timing of
0:37:24 those milestones then he gets involved and that’s where you hear he’ll go in and he’ll just fire people
0:37:32 wholesale and you know and and you know get the program going again and he’s he’s done that certainly
0:37:40 at tesla he’s done that at all of his companies and so he’s really troubleshooter in chief once he
0:37:47 understands and has set a strategy he then becomes troubleshooter in chief have you met him oh yes we did
0:37:55 actually our uh first podcast with him was in 2019 oh i saw that during during production hell yeah and
0:38:03 uh we were so happy so as you know we have a social strategy so we push our research out through social
0:38:15 media as we give it away or as we’re evolving it and uh he liked a piece of research that tasha keeney had put out
0:38:21 on autonomous back then and i was on a phone call i couldn’t get off but i heard this whooping and
0:38:27 screaming through the office and i i i thought it sounded good it wasn’t an emergency so i i didn’t
0:38:33 have to leave that call but i got out i said what happened elon and i said okay ask him if we can do
0:38:38 a podcast and we were there the next week oh incredible yeah what do you think of him as an entrepreneur
0:38:50 i think he’s the thomas edison of our age in terms of uh in terms of his um innovative ingenuity
0:39:00 and i also think having met him a number of times i think he’s a very good person he wants to do the
0:39:10 right thing if i had to say one thing he wants to do the right thing to transform the lot of most of
0:39:21 humanity and he started uh with tesla spacex and tesla tesla you know was a an environmental move
0:39:29 which i think a lot of people attacking his cars who are probably very um supportive of the
0:39:39 environmental movement uh they they’ve forgotten sending uh a rocket to mars and with humanoid robots and
0:39:47 ultimately people um he thinks will transform life on earth as well because as we’ve learned from
0:39:57 space history uh what we learn about material science and technologies that help us break through into these
0:40:04 very difficult or problems to solve is going to help us here on earth as well
0:40:12 so i think he’s a very good person and wants to do the right thing that if i had to describe him
0:40:14 that’s what i say other than genius of our time
0:40:19 i often wonder you know because he’s had such a profound impact on the world in many many ways
0:40:25 through the companies he started i think the uh the biggest risk really is just his own his own health
0:40:32 doesn’t seem to sleep much you know though he says that he does sleep i think he he he recommends i
0:40:42 think if i’m right on this getting seven hours sleep a night uh and yes but when when he is focused
0:40:52 you know it i mean people even look they they there were many pictures of him whether it was standing
0:40:58 you know with other policy makers and then he zones into something you know he’s zoned in
0:41:04 and thinking about only that and a problem that he wants to solve so you’ve invested what just over
0:41:14 two billion in tesla let’s see so it would be roughly yes in that region bitcoin you invested in bitcoin
0:41:20 very very early what was the the first price what that you bought bitcoin for in i think it was 2015
0:41:34 yes it was in um the summer of 2015 uh we got in at roughly 250 dollars uh today it’s 104 000 i think
0:41:40 roughly so we did get in very early and we knew we were on to something
0:41:46 really when people were making fun of us saying okay that’s a marketing trick you’re you’re new to our
0:41:54 our business and you know new to our to the new fund world and uh you’re trying to attract attention and
0:42:00 we were thinking wow they have no idea how much research we’ve done on this and art laffer uh my
0:42:11 professor again from usc we had him uh we had him read our first white paper on bitcoin bitcoin could
0:42:19 it serve the three roles of money so means of exchange what we use every day uh to to buy things
0:42:29 store of value uh like gold and unit of account would prices be quoted in terms of bitcoin
0:42:39 chris bernisky was our first analyst on bitcoin wrote the paper art read it and you know from added to it
0:42:47 enormously in terms of economic theory which was great for us and then he said to us he said this is
0:42:57 what i’ve been waiting for since the u.s closed the gold window in 1971 a rules-based global
0:43:07 monetary system like breton woods under the gold exchange standard and i said art that’s a very big
0:43:15 idea how big is it and he said well how big is the the monetary base of the u.s back then it was four
0:43:26 and a half trillion and bitcoin’s market cap or network value was six billion and i said okay that’s a very big
0:43:35 big idea and we were trying to get it into our portfolios regulators were hesitant and uh but i bought it
0:43:41 right then for for myself and haven’t sold it and i’m very happy with it you bought it for yourself
0:43:49 personally personally because we couldn’t buy it 250 dollars so we couldn’t buy it back then but we
0:43:56 finally got through the regulatory process and we were able to put the new york stock exchange said okay
0:44:03 you can put a one percent position in the portfolio and it was of a grant or trust called gbtc
0:44:09 so we did and we just never sold it they didn’t tell us we had to keep it at seven at one percent so
0:44:16 oh it’s risen to be oh yes it it ballooned and what is it about bitcoin that you believe
0:44:27 was and is still a good investment opportunity for the average person yes so at this at this price it’s
0:44:35 it’s about a two trillion dollar uh market cap and so halfway to that original four and a half trillion
0:44:45 but our price target actually has expanded since then um because it’s not just a global monetary system
0:44:56 it is a new asset class and that’s a very big idea as well what makes a new asset class and we haven’t
0:45:04 had one truly since uh equities in the 1600s when you say a new asset class you mean a completely new
0:45:11 category of funding companies yes right and asset class would be something like technologies and asset
0:45:20 class right no it would be like stocks bonds commodities real estate this is a new asset class
0:45:30 and most people will agree with that we we did a study on it if this asset does not perform like
0:45:40 other assets in other words it provides diversification for funds and because it is behaving differently
0:45:47 institutions have to consider it uh because they’re competing against each other and if one puts it in
0:45:55 they all know they’re competing against each other so others have to consider it and we believe
0:46:04 that part of the opportunity has not been tapped and just to put some numbers on this right now
0:46:14 we’re approaching 20 million bitcoin outstanding which means the number of bitcoin that have been minted
0:46:24 over time uh by bitcoin miners so there’s 21 million in total right there will be at the end of the
0:46:35 the minting process 21 million so we have only one million to go yeah uh one million would be what is
0:46:43 that that would be a hundred billion dollars worth a little more than that right now so just for someone
0:46:48 that might not know much about bitcoin bitcoin is mined using computers and so far they’ve mined 20 million
0:46:56 one million of them and there’s one million of them left to mine yeah so institutions really just started
0:47:06 considering bitcoin because the sec gave the grit uh the the green light uh to bitcoin with uh the the
0:47:14 approval of the spot bitcoin etf in january of last year and it takes a while for institutions to do their
0:47:22 their research and and commit uh and so they’re just now committing and there’s only a hundred billion
0:47:34 dollars of new market cap uh that is going to be created whereas they have trillions of dollars under
0:47:43 management um and so we think there will be a lot of incremental demand and uh to satisfy
0:47:51 a lot of that demand someone’s going to have to sell which means the price goes up which yeah if people
0:47:59 don’t want to sell because bitcoin’s been awfully good and our forecast right now it’s um right now the
0:48:13 bitcoin’s around 100 105 000 our forecast uh for 2030 is 1.5 million dollars and we do that
0:48:21 uh uh uh uh the building blocks for that uh the three biggest building blocks are institutional which has
0:48:33 barely started uh store of value or digital gold young people are much more uh comfortable with digital
0:48:40 gold than gold so on the institutional side that means institutions investment institutions start investing in
0:48:48 it young people start investing in it as a way to save and store their money yes yes and then uh
0:48:57 the the the the the the very important use case that many people do not discuss is how important
0:49:06 bitcoin and stable coins which are backed by u.s treasuries are going to become to the emerging markets
0:49:16 uh in emerging markets many of them are at the whim of policy makers who uh show no discipline in fiscal or
0:49:22 monetary policy and so they they’re used to going through booms and busts and booms and bailed out by the
0:49:30 imf and they need an insurance policy so if you’re in venezuela you need a currency that’s going to be
0:49:39 going to be exactly exactly well this bitcoin is uh so stable coins are stable vis-a-vis uh the dollar
0:49:50 uh bitcoin is more of an investment because it does appreciate over time now you go through it’s volatile
0:49:56 no question and that’s the first thing people have to know about it uh but it is becoming less volatile
0:50:06 as more and more investors hold it so you think bitcoin will potentially multiply in value by 15 times in
0:50:14 the next five years wow that’d be pretty crazy it’s a very big idea because it is a new asset class
0:50:23 it does represent a global monetary system unlike any other digital asset out there um it is backed by
0:50:32 the largest computer network the the the layer one which is the base layer has not been hacked think
0:50:41 about that since 2009 when it was released not been hacked how many how many systems can say that
0:50:47 and it is a technology it is native to the internet and again
0:51:00 digital assets or any bitcoin ether solana all of them exist because they’re vying to be the native
0:51:10 currencies to the internet and to to enable smart contracts and really transform the financial services industry
0:51:20 why did you invest in queen base coin base is um an exchange for for digital assets
0:51:32 and uh and increasingly derivatives it has just it has gone global it just bought darabit which is the
0:51:40 largest options uh exchange out there uh and it owns the futures so it’s really
0:51:47 going after uh the derivatives market where there’s a huge amount of activity which is fantastic
0:51:55 because it’s all legitimizing digital assets and it is the most regulatory compliant exchange in the world
0:52:04 um binance is another major exchange but has had more run-ins with regulators around the world and
0:52:12 and really hasn’t been allowed into the united states it also wants to become part of the new payments
0:52:20 infrastructure and so is evolving strategies that way as well um we’ve gotten to know management very
0:52:28 well they fought the fight against regulators in a magnificent way and they have educated policy
0:52:35 policymakers um importantly who understand that this innovation we almost lost this innovation to the
0:52:42 rest of the world because of our regulatory stance uh they’ve helped policymakers understand that hey
0:52:53 you know this this infrastructure is what developers did not build in to the internet in the early 90s because
0:52:59 they didn’t know finance or commerce would take place that’s all this is it’s that simple right
0:53:04 so if i’m trying to invest in just to summarize and if i’m trying to invest in ai that your key
0:53:09 positions there and your key thoughts are companies like tesla i heard you invest in twilio
0:53:16 uh we we we had invested in twilio they had a met at they had a management turnover so we moved away from
0:53:23 that but uh palantir palantir yes palantir is a platform as a service company which we think
0:53:31 uh is not only going to help governance move governments move into the digital age like our
0:53:38 defense department and now it’s moving into other departments but also these huge huge enterprises
0:53:45 because it’s not forcing them to rip and replace anything they’ll build on top of whatever technology
0:53:53 infrastructure is there and over time just use usurp the role of the legacy technologies so very
0:54:01 important company we think in uh the digital age it’s had a very big run we have taken profits and you know
0:54:07 while it was having a big run nvidia was selling off it was down more than 50 percent
0:54:13 so we put some of our palantir proceeds back into nvidia is there anything else in the ai bucket
0:54:20 when you’re thinking about stocks well when you’re thinking about uh chip companies in particular
0:54:30 uh tsm is the platform for chip manufacturing it doesn’t matter who wins we we do think there
0:54:36 are going to be many more competitors to nvidia nvidia still number one have you heard about grok
0:54:45 oh yes grok we are invested in in our um in our private fund oh okay so just for people that might
0:54:51 be confused do you mean grok with a q oh yes that’s that’s in our private fund we don’t we do own grok
0:54:59 and that’s a very important company on the inference side of um of the equation i’ve invested in grok as
0:55:06 well yeah probably disclaim that well i think i think you’re going to do very well um so tsm though
0:55:13 is where all the chip manufacturers go uh for production it is the most sophisticated manufacturer
0:55:21 of chips uh in the world uh there is geopolitical risk there most of its business is in taiwan it is
0:55:30 diversifying into uh certainly into the u.s and i think even into europe uh so i think uh that will
0:55:35 continue to be a very important company as well so what are the what are your what’s your top 10
0:55:41 in terms of public stocks that anybody can invest in if you had to give me your top 10 so i’d have
0:55:48 to give you uh and they’re listed on our website and i won’t go in order i’m sure but of course tesla
0:56:01 coinbase uh robin hood uh roku is uh an operating system for connected tvs highly misunderstood stock crisper
0:56:09 therapeutics which uh which uh is uh gene editing gene editing for sickle cell disease and uh beta
0:56:19 thalassemia uh palantir i think i’ve mentioned uh in the ai software space archer just moved into the top
0:56:27 10 it’s the evtol company which and it also signed a deal an exclusive deal on both sides which was quite
0:56:37 impressive uh with anderal which and a rill which is the uh most sophisticated defense tech play uh and is
0:56:49 growing like gangbusters so that’s terrific shopify uh which is a shopping platform back-end and really
0:57:02 using uh roblox roblox roblox which is a game right yes it’s a user-generated gaming company uh the
0:57:11 fascinating and it’s also a social platform uh it started for children younger than 13 years old and
0:57:18 what’s interesting about it is uh they’ve stayed with it because 60 percent of its user base now
0:57:27 is above 13 which is very interesting it’s the largest user-generated uh um content provider out
0:57:36 there and what is fascinating about it is i know one of my friend’s daughter has started her own dress shop
0:57:42 on roblox and what she doesn’t understand is that she’s she’s learning about business but she’s also
0:57:48 learning how to code especially in this new vibe coding world so i think it’s going to be a very
0:57:57 important uh company going forward the the interesting thing about gaming and technology transitions is that it
0:58:08 is the only entertainment medium medium medium that has not fallen apart with technology transitions um
0:58:17 it has actually grown because those who love their games from 25 years ago still play them it’s grown with each
0:58:26 technology revolution so uh and user-generated content in gaming is um the next big thing
0:58:32 a business is only as good as the people inside it so how do you make sure you’re hiring the best
0:58:37 our sponsor linkedin can help you find these applicants quickly i believe in taking time to
0:58:42 hire slowly but i also understand that once you’ve decided to hire you want to get the ball rolling
0:58:46 and get the best candidates in front of you to start interviewing and that’s where paying to
0:58:50 promote your role on linkedin makes all the difference because you’ll get applicants seven
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0:59:01 important you never want your hiring platforms to be what’s holding you back linkedin keeps pace it
0:59:06 takes care of the heavy lifting sending you highly skilled candidates that you wouldn’t find anywhere
0:59:11 else so when the time comes to make your next hire make it count and promote your job on linkedin
0:59:20 that’s linkedin.com doac and terms and conditions apply make sure you keep what i’m about to say to
0:59:27 yourself i’m inviting 10 000 of you to come even deeper into the diary of a ceo welcome to my inner
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0:59:37 things that happen that you are never shown we have the briefs that are on my ipad when i’m recording the
0:59:42 the conversation we have clips we’ve never released we have behind the scenes conversations with the
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1:00:19 if you had a thousand dollars to invest and you had to invest it somewhere where would you be investing it
1:00:26 well and how would you be like the general philosophy towards wealth creation at such a stage if you had a
1:00:34 thousand dollars how would you be thinking about creating wealth for yourself a couple of things averaging
1:00:48 into um either an etf what’s an etf etf exchange traded fund so it treats a group of stocks like one stock
1:01:03 so a rkk is it’s nearly it’s 35 36 stocks but you can buy them by purchasing a rkk and you can do
1:01:07 that on your mobile phone by you can do it on your mobile phone a bunch of different apps allow you to
1:01:14 just buy that one etf which means you earn 35 stocks yes and and your team are basically choosing what
1:01:21 what those 35 stocks are yes based on your research right and a rkk are our highest conviction stocks
1:01:29 and they they they offer an exposure to all of the innovation platforms that we’ve talked about
1:01:40 whereas a rk i here in europe is focused primarily on artificial intelligence and robotics because we think
1:01:44 that convergence is going to be pretty that convergence is going to be pretty explosive what you don’t get
1:01:56 there and you do get in a rkk we also have in another very focused fund a rkg which is really health
1:02:03 care applications of ai and and other health care other health care names that we think
1:02:11 are going to be pretty transformative in the new world as regulators really understand how important
1:02:22 ai is going to become to discovery uh research trials development uh to diagnostic tests and to curing
1:02:27 disease another question popped up which is about ethereum and these other cryptocurrencies do you invest
1:02:34 in any of these others yes we have uh we have uh well in our public funds we’ve put them i don’t think we
1:02:42 can own them here in the uk yet but in the in the us uh we have them in um some of our funds both of them
1:02:51 they’re key to the financial services revolution so uh to get people to understand and feel comfortable with
1:02:58 that uh we don’t call it the crypto revolution it’s the digital assets revolution and it’s simply the
1:03:05 finternet the financial internet okay so that so we do we do and you believe are you more bullish on the
1:03:14 price potential of bitcoin than ethereum yes we think bitcoin is the biggest idea it serves the three three
1:03:22 revolutions global monetary system they do not um new asset class they are part of a new asset class but
1:03:29 bitcoin is going to be the biggest and new technology it’s the most secure uh blockchain technology out
1:03:35 there what about all these other solana and all these other so ether and solana so the big three are the
1:03:43 are those are the the big three um and we think they’ll all be successful all three of them bitcoin
1:03:49 the most we’re very interested in stable coins but that’s just like cash uh and you know there are
1:03:56 millions of crypto assets out there we think most of them die is there any way to invest in stable
1:04:03 coins like how do you invest them so indirectly right now it is through coinbase they have a deal with
1:04:14 circle um any any revenue that circle generates it’s it’s it’s stable coin is us dc yeah any revenue they
1:04:22 split 50 50 uh in us uh circle itself has announced that it is going public and so we’re looking forward
1:04:28 to that and what’s what’s the the sort of psychology or mentality one has to adopt to be a good investor
1:04:36 depends what you’ve bought if you buy a strategy like ours which would be in the aggressive growth
1:04:43 strategy put it in you know averaging in over time just like with bitcoin as i mentioned earlier
1:04:49 uh averaging in over time what does averaging in averaging in means you know buy a little
1:04:56 every month every month so maybe every payday i think one of my daughters was buying bitcoin every week
1:05:06 but not a bitcoin she couldn’t do that a satoshi you know so and close your eyes like you’re this is a
1:05:14 long-term investment if we’re right uh according to our analysis now you this is our research our analysis
1:05:22 no promises we can’t do that but according to our research the technologies around which we have
1:05:31 centered our research uh and which have focused our investments they we believe will go up more than
1:05:41 tenfold in the next five to ten years and that’s how much explosive growth we have ahead of us as
1:05:49 these technologies converge and create incredible opportunities for investors and you know i’m hearing
1:05:57 a lot of invest a lot of people um as they get into investing of course they have their day jobs but
1:06:05 once they have accrued enough you know they’re making choices about dialing down their day jobs
1:06:10 and spending more time investing you asked what are some of the jobs of the future going to be i think
1:06:17 individual investors are going to be providing for themselves if they are investing on the right
1:06:21 side of change so if you’re right that means that by investing your fund i’d make a thousand percent return
1:06:29 roughly yes no promises but this is all based on research and you can find it in our big ideas
1:06:40 big ideas 2025 is on our website arc-invest.com and you can find a lot more
1:06:49 information about our funds on arc-funds.com and i should probably say this is not
1:06:55 investing advice it is not and and i want to make sure do your own research you can lose all of your
1:06:59 money yes you can lose all of it if you decide to do any of these things but that’s why we put
1:07:06 arc-invest separate from the fund site because that’s just research learn learn what you’re investing in
1:07:16 or learn why we’ve invested uh the the way we have you know that’s that’s what we do all day long is we
1:07:21 try and help well first of all we’re doing the research we are making the investments but i think
1:07:28 one of the most important things we do is communicate what we’re doing and why we’re doing it
1:07:36 what do you think of trump tariffs everything that’s going on in america at the moment what’s
1:07:40 you know for the average person should they be concerned are you bullish do you think trump’s got it right
1:07:47 if you look at what happened to the equity market when trump was elected the stock market yes the
1:07:55 stock market it went crazy to the upside as did our strategy and why the promise was
1:08:02 deregulation and that i think is underestimated uh how important it is because we’re strangling in
1:08:09 regulation it’s just this is not our dna we’ve got to get out from under this lower taxes
1:08:20 lower interest rates is what he wants of course um and lower tariffs what he didn’t tell us
1:08:29 was exactly how he was going to go about that process and it has it has felt chaotic
1:08:36 and i’ve had to go out and explain what’s going on try to explain what’s going on
1:08:48 and i i have to tell you it scared me silly to see what was going on because i knew that businesses
1:08:57 were paralyzed and that we could have a mess on our hands and i certainly can communicated through my
1:09:05 channels art communicated through his channels in fact i think in one publication he said i have never
1:09:15 been more scared in my career we were trying to really get into trump’s head and and i know president
1:09:21 trump listens to art but he also listens to a lot of other people one of whom was peter navarro
1:09:31 who seemed to have a hold on trump when it came to tariffs and yet when i saw treasury secretary
1:09:38 besant really push aside navarro and that could only happen with trump i knew we were going to be okay
1:09:44 i knew we were going to be okay because throughout all of this chaos i think what he is trying to do
1:09:56 is not only get tariffs on the u.s down throughout the world but maybe more important get
1:10:04 non-tariff trade barriers down like for example i didn’t even know the uk would not accept our beef
1:10:12 or ethanol well now you’re accepting our beef and ethanol i i don’t know if i don’t know if people in
1:10:20 the supermarkets will buy it but uh anyway this was but other countries much many many more non-tariff trade
1:10:27 barriers and so he is just trying to bust that up you know make it more visible
1:10:38 you know for example canada i think they charged a 250 tariff on our milk and one of president trump’s
1:10:46 promises was to take care of the farmers okay that’s why you see the rhetoric around canada now do i agree
1:10:55 with his style i would never do it that way i’d never do it that way i and it was unfathomable
1:11:02 you know for me because he is sensitive to business and he must have known that everything was going to stop
1:11:12 and uh but he also knows that he has to sound crazy for other people to take him seriously and he has and
1:11:18 people have to believe he will do crazy things and other for people to take him seriously and
1:11:24 he does do crazy things so do you think it’s going to work out i do and i think the stock market is
1:11:29 beginning to smell it if i if i just had to invest in one stock right now what stock would you recommend
1:11:36 i invested in okay well i have to give you our your portfolio so it would be tesla it would be tesla if
1:11:44 i had to give you one stock okay interesting because think about it it is it is a convergence
1:11:55 among three of our major platforms so robots energy storage ai and it’s not stopping with robo taxis
1:12:02 there’s a story beyond that with humanoid robots and our 2600 dollar number has nothing for humanoid
1:12:08 robots we just thought it’d be an investment period and you know the root but i think he’s going to
1:12:16 start generating not only productivity gains internally but revenues from humanoid robots what
1:12:21 are you concerned about in terms of the way that the world is going and everything that’s happening what
1:12:26 are the things that keep you up at night i’ve got many a concern so i’ve got many unanswered questions
1:12:32 and worries about how things might play out but keen to hear yours i am such an optimist i really do have
1:12:39 to dig down deeply if you had asked me this a few weeks ago i would have said you know this tariff
1:12:46 situation is going to blow the global economy up if we’re if we’re not careful so i’m much more settled
1:12:55 about that right now i’d have to say i am concerned that there are going to be people caught out
1:13:03 by these new technologies and for whatever reason not willing to adapt because there are going to be
1:13:10 huge opportunities if they do and so one of the reasons we give away our research you know i’m
1:13:19 very honored to do a podcast like this is to get that word out there is so much information available
1:13:27 you can just go to our site and listen to our podcasts and if anything inspires you go for it
1:13:34 because it’s going the opportunities are going to be enormous when you say you’re concerned people might
1:13:41 get caught out caught out caught out in you know disrupted industries i mean we think the whole
1:13:48 transportation industry is going to be disrupted um we think retail as we know it’s going to be
1:13:56 disrupted as we are retailers in like shops and stuff and yes although if they adapt with more social
1:14:02 personal experiences i think that anything physical you’ll want to have a social dynamic associated with
1:14:09 it but in terms of what i think is going to happen to retail is we’re going to have our personal
1:14:17 shopping assistants and they’re going to they’re going to anticipate what we want which i can’t wait i hate
1:14:25 shopping uh anticipate what we want uh or basically flag something that they know we would like if we knew it
1:14:32 were available and they’ll be disintermediating all of the traditional sources because they can go anywhere
1:14:39 in the world um so just think about almost every sector is going to be disrupted health care is
1:14:46 going to be disrupted enormously i think for the better for the better but those who are wedded to
1:14:55 doing things the old way are probably going to be disrupted you know yeah that is my concern as well
1:15:02 and just how we handle that as a society but i think if we can help people understand
1:15:10 that they have a lot of control over this if they’re willing to learn and dream
1:15:16 and use their imaginations not everybody is though yes but they have to do it for their children at least
1:15:22 right we took the general population in london and said 100 people how many of you understand what ai is or
1:15:27 how many of you use chat gbt we’d have a certain percentage maybe i don’t know 50 or more if i went
1:15:36 to the countryside yes and i stopped a lovely person shopping in the local village and said do you use
1:15:42 chat gbt it’d probably be significantly lower percentage yes they wouldn’t care about that
1:15:50 what is that whatever um i wonder about the inequality of like education but just initiative
1:15:56 and how those that really do have a proclivity to lean in and to experiment and to mess around and to
1:16:00 learn because maybe there’s an incentive because they work in a city and their employees asking them to
1:16:05 or be off to the races with this disruptive technology and there’s just like a lot of the
1:16:11 rest of society of middle america and the countrysides and those types of people who
1:16:17 are just not even going to see it coming but that’s why we’re out there and the the
1:16:23 important word that you used was initiative because i really think you know when people hear the word
1:16:33 inequality uh they like to blame something right there will be no reason for this i’m sure someone’s
1:16:38 going to come back at me for saying that but i’m of course there are people who who we have to help
1:16:46 along the way no question about it but for those who are healthy and uh are listening to this podcast
1:16:53 and are saying uh you know i don’t i don’t know exactly what she’s talking about but i’m going to
1:17:01 start reading up on some of these new ways of doing things and make sure to at least understand it
1:17:07 i think within that kind of initiative they’ll find it they just will find it there’s going
1:17:15 to be so much opportunity it’s going to be so exciting and i think again creativity and you know
1:17:22 especially young people using their imaginations you know they’re they’re not held back by any
1:17:27 preconceived notions so i ask all the questions i ask because i’m trying to like solve little question
1:17:31 marks have in my head about the future and it’s really difficult at this time to see around the corner
1:17:35 because so much is changing so quickly and there’s all of these converging technologies as
1:17:39 you describe like robotics and ai and then when i put robotics and ai together you’re a fuck
1:17:47 do you know what i mean because i like there’s like i keep coming back to this question of like
1:17:52 what am i going to do and not in i’m just good about that you know what’s really good about that
1:17:59 that will motivate you it does of course it does it’s great it motivates me to ask people like you
1:18:05 the questions 17 times in a row but it’s a real point because i run businesses we have at our
1:18:10 headquarters which is around the corner it’s about 25 000 square foot office we have you know hundreds
1:18:16 of people in that building and i’m thinking about the roles that we’re hiring for and i’m we’re now looking
1:18:22 at them through the lens of agentic ai so ai agents and and then if i overlay that with robotics and ai
1:18:27 and you know i’m going oh there’s what roles would we need to hire in the future because
1:18:35 theoretically like can you name a single role in a media company that would when i’m talking
1:18:39 back in the robotics era that would really need to be done by human i guess other than
1:18:45 one could say human to human sales will still have some kind of element of human touch to them
1:18:55 you know though i mean we’ve learned a lot from the ancient game of go yeah so you’ve heard about alpha
1:19:08 go which was uh alphabet google um basically devising a program to compete against the go champions go is
1:19:15 much more complicated than chess yeah it’s like a game a board game basically right so i think the the
1:19:21 champion of the world at the time was a south korean and he was sure he was going to beat this machine
1:19:33 well the machine beat him and he was crestfallen and then he got his chutzpah to use new york word back
1:19:44 and he said wait a minute i’m going to start playing against machines and so now he’s playing against
1:19:51 machines his game is so much better that when he competes against humans and those competitions
1:20:00 are the more important ones right when he competes against other human beings the machine has kept
1:20:06 him at his champion and of course everyone’s using the machine so we’re all we’re going to artificial
1:20:11 intelligence but he still can’t be a machine can he he still can’t beat the best machine in the world
1:20:19 no he can’t and but i mean he can occasionally but but people don’t want to go see machines competing
1:20:25 against machines i get that in because human humans like human error and they like to be able to relate
1:20:31 and to aspire but as it relates to the world of work the incentive is productivity and my my humanoid
1:20:37 robot isn’t going to get sick and it’s going to have a phd in everything so i don’t want to see a human
1:20:49 right right right right right but then you you’re your robot and your ai is really focused on the past
1:20:55 right that’s what it’s ingested they can make predictions though based on that past pattern
1:21:02 recognition which is how my brain works right like a network but that’s why we chose the word disruptive
1:21:11 disruptive means the traditional world order and patterns therefore that you know the the robots and
1:21:20 others will recognize is going to change right so what does that mean as in so what when we’re doing our
1:21:28 research we have a white sheet of paper there’s no history for this right and so we’re doing a lot of
1:21:34 original research so ai machines might use our research as there because we put it out there
1:21:39 but how does the ai think differently to you to a human though in terms of is i thought the human brain
1:21:46 was building you know predicting essentially something based on lots of information and ai is basically
1:21:50 doing the same thing with neural networks it’s making a prediction based on lots of new information and
1:21:56 therefore if we get to agi it can create new information yes and and and it will but i mean
1:22:06 agi elon will say it’s two years away and it does seem you know we’re able to generate phds and rocket
1:22:15 scientists now in the ai world so he’s probably right but i also think about this as giving us super
1:22:22 intelligence so could chat gbt do what we’ve done maybe i don’t know actually it’s a very interesting
1:22:31 exercise i’m going to ask our team to do that before we put it out uh to do to do a model a spacex model
1:22:39 financial model income statement balance sheet cash flow statement between now and 2050 when we have
1:22:49 in 20 in the 2040s elon expects if not sooner to colonize mars uh i’ll see what kind of model it
1:22:55 comes back with in terms of how much in terms of how correct it is and what it uses to get there
1:23:05 okay i’ll do that now spacex a financial model or income statement okay income statement
1:23:12 next we asked the really smart model let’s do 3.0 make a space you’re an investor in spacex
1:23:19 yes in the private fund yes so am i make a spacex uh income statement
1:23:32 income statement based on uh elon’s predictions yes elon’s predictions yeah this will be very
1:23:38 interesting now until 2050 okay i’ll put that on the screen so everybody can watch
1:23:44 and this is essentially going to look at everything he said about going to mars and colonizing mars
1:23:51 and then tell you how valuable that company’s going to be so yes i’m not sure if you asked the question
1:23:56 that way did you did you say i just said make a spacex income statement based on elon’s predictions
1:24:00 from now until 2050 and then i can ask it what the market cap would be i wonder how long it’s going to
1:24:05 think it’s thinking for a while yeah it’s going to think a long time i have a feeling and then it’s
1:24:12 going to take you through and i think uh you know it was interesting deep seek uh the breakthrough it had
1:24:21 on the reasoning side was it kept asking questions so it could get to the right answer faster i think they’re
1:24:26 all adopting it now because because deep seek’s open source yeah and they did need to spend much
1:24:32 as much money on the training side because that’s what they say they said six million dollars trained on a
1:24:40 high-end workstation and that that of course caused a trillion dollars worth of damage in the u.s
1:24:47 market with nvidia one of the biggest uh casualties because people said well wait a minute we’re doing
1:24:55 these data centers you mean we don’t need all those big data center servers to to do this work we could do
1:25:04 a high-end workstation for six million dollars the answer is the pre-training for that model was done on
1:25:14 a 50 000 gpu cluster that the hedge fund had and the last step of the large language model was the six
1:25:24 million dollar step okay it’s made its mind up now oh so it says starlink revenue in 2050 would be 250
1:25:34 billion it says launch and starship revenue would be 120 billion so the total revenue would be 370
1:25:41 billion cost of goods sold would be 172 billion gross profit therefore would be 200 billion operating
1:25:49 expenses 37 billion operating income would be 161 billion after tax so the net income would be 128
1:25:57 billion all right and i have to to be honest i haven’t seen the last stage of this model we haven’t
1:26:04 that’d be very interesting i’d love to get a a copy of that if you could send it to me 100 i’ll email it
1:26:09 you straight after you know when i asked chat gbt earlier i said who is the number one woman in the
1:26:16 world in investing it repeatedly said your name so that’s a pretty remarkable thing to have accomplished
1:26:22 especially in a male-dominated industry where there isn’t many women that managed to rise to the top of
1:26:30 that industry so what what is it about you in hindsight you know it’s difficult to be objective
1:26:35 about oneself but what is it about you that meant that you were successful in a male-dominated industry
1:26:42 in an industry that’s incredibly difficult to be successful in my advice to all young people getting
1:26:51 into their first job especially but even later jobs is my mission when i started was to make my boss look
1:27:00 brilliant now why do i why do i say that it’s much more applicable today and possible today than it was
1:27:08 back when there were no computers and no cell phones which is when i started right but what did i do my
1:27:15 boss wanted to communicate he was an economist wanted to communicate in charts that you know he couldn’t
1:27:24 find so i figured out a way i went to our time-sharing system that’s all you could do back then time-sharing is an
1:27:33 ancient mainframe technology and i figured out a way to make these charts and delight him and
1:27:40 and and and i loved doing it and i loved learning i loved learning about technology i learned tech and
1:27:48 about economics uh through him so that was the first thing and then why is it important to make your boss look
1:27:59 good well i think because if you do make him look good um first of all you should you owe him a debt of
1:28:08 uh of gratitude if he turns around and gives you more growth opportunities so but if he or she doesn’t
1:28:13 then you know it’s time to go to the next place where you make that next boss look brilliant and
1:28:21 maybe you have the growth trajectory i had bosses who they they love the fact that i loved what i was
1:28:28 doing that i had such high conviction in what i was doing and i and i’m going to give art laffer a lot of
1:28:36 credit for that when i walked in to the financial world i knew more about economics than most of the
1:28:44 people in the room and that was a great source of confidence a great source of confidence and when i was
1:28:53 leaving that firm uh someone said my my boss at the time said i was moving from la to new york my my boss
1:29:00 said you’ve only been doing this for three years you’re not ready to become their economist and um
1:29:06 and i just thought i was ready and more important the company to which i was going thought i was ready
1:29:14 and as i was leaving um both he and and others said remember you know more about economics than
1:29:21 anyone else in the room you’ll so take that with you and i did and i think that sense of confidence
1:29:27 and understanding the way the world works from a macroeconomic uh point of view was critically
1:29:34 important now when i got to new york i could not even speak art laffer at laffer’s name because
1:29:43 the laffer curve says if you cut tax rates that are too high you will get more revenue and what had
1:29:51 happened is ronald reagan had cut tax rates but paul volcker at the fed was trying to starve the
1:29:56 economy of inflation so we were in back-to-back recessions and no the government wasn’t getting
1:30:04 more revenue so art laffer was you know on i i couldn’t say anything but you know it was fine i
1:30:10 knew he was going to be right and we were right that was the story of the 80s and 90s and that’s why
1:30:20 uh jenison associates and the chief investment officer there uh sig sigalis um gave me an opportunity to get
1:30:28 into equity research i wanted to grow i loved the stock market and he loved my conviction and so he
1:30:36 started me on cyclical companies which of course i would know a lot about but jenison was primarily a
1:30:42 tech oriented firm and of course knowing that i wanted to delight the boss i wanted to get into the
1:30:49 technologies and i made it my business to know as much about them and and i was the only one
1:30:55 willing to uh research stocks outside the u.s think about that now
1:31:05 art laffer arthur laffer yes he wrote this letter oh he did he wrote this letter describing you
1:31:14 oh to you to me oh he said there was this young lady named kathy duddy later kathy wood whose face
1:31:19 was the map of island and whose ambition was over the moon i was a tough teacher and grader and kathy’s
1:31:25 first steps were shaky but in short order she rose to the occasion and aced the course impressed as i was
1:31:31 and believe me i was very impressed i helped kathy land her first job at capital group in la and from
1:31:36 that point in time it was game on i followed her career closely after capital group then on to tipillo
1:31:44 and her final job as an employee at alliance bernstein as you may imagine she was the star
1:31:50 investor at each stage and in 2014 kathy took a giant and entrepreneurial leap in the founding and funding
1:31:58 of arc invest and the letter goes on to say she’s a mega success and god bless her she never has forgotten
1:32:10 her now aged professor well that was very nice of him um uh so he he has been so important to my
1:32:17 career now i’m gonna get a little weepy but um i gave him one percent of my company when i started it
1:32:25 and uh so he deserved it he deserved it because he gave me a big big break he believed in me first
1:32:32 why does that make you emotional i don’t know we we have we’ve gone through our life together and
1:32:46 what’s so interesting now is um it’s so interesting and and fun is bitcoin has rejuvenated art he’s 85 years
1:32:54 old or 84 and i’m seeing his excitement and he wants to spread the word around the world and now we’re
1:33:04 going into stable coins together and he just started an account on x he has a flip phone
1:33:12 he doesn’t do email and yet he has just started an account on x and so we now have this technology
1:33:20 relationship because he wasn’t going to technology but he knows he’s seen like arc all together we have
1:33:29 3.3 million followers and he’s seen the reach that x has and he’s also i think the other thing and i’m
1:33:34 i’m haven’t answered your question it was just very nice of him to do that you know and i see it’s a
1:33:40 typed one page and very sweet we have a closing tradition on this podcast where the last guest leaves a
1:33:43 question for the next guest not knowing who they’re leaving it for and the question left for you is
1:33:52 great question for you what is the craziest idea you ever had that turned out to be right
1:34:01 well there are just a few one thing that it’s it’s not that crazy but it just gives you a sense of how
1:34:11 not obvious in the early days of arc i remember saying i remember saying
1:34:22 well you know autonomous vehicles are robots and i was in a research meeting and everybody said no
1:34:28 no they’re not and of course they are you know it’s a crazy idea but and there was something i mean
1:34:35 there are some things i’ll say and the reason that’s important from our point of view is this
1:34:44 convergence idea robotics ai energy storage it’s wait a minute this is a very big idea so it seemed it
1:34:52 seems like no it’s like i think it is and and so it was like we were we were you know feeling our way in
1:34:58 the dark because i was 2014 and nobody was really talking about them and there’s something like that very
1:35:05 recently oh we were talking it’s not a crazy idea it’s just we’re trying to solve problems um someone
1:35:14 as we were going on and on at our brainstorm on friday about humanoid robots uh someone he’s he’s
1:35:20 our um what do we call him what do you call curmudgeon uh no good way in a good way i don’t even know
1:35:27 what curmudgeon means curmudgeon means contrarian or curmudgeon like yeah yeah yeah that’s not gonna work
1:35:36 you know um he humanoid robots he said he said i don’t think that’s gonna be a thing he said we really need
1:35:44 robots that are going to be able to carry a lot more in terms of weight than those things will on
1:35:54 those stilts and in my mind kind of flashed um transformer robots they’d have legs and all of
1:36:01 that you’d be able to fold them up so they look like a tamp tank and so that’s what i said on uh i know
1:36:07 this doesn’t sound so crazy to you but uh i don’t i just imagining the future going to disneyland when
1:36:15 i’m 11 years old we had just come over uh from ireland and seeing someone holding a phone on the
1:36:23 carousel for progress and you know saying i’m gonna have one of those um it sounded crazy at the time and
1:36:30 i felt a little crazy but i always so you think we’re gonna have transformer robots yeah so the robot
1:36:36 that cleans my house can transform and maybe become and everybody left at me but i think that’s gonna
1:36:44 happen another one was and this was on these are just little ideas in terms of how things hit my brain
1:36:52 but uh someone was talking about boring which is another one of elon’s companies the underground
1:37:02 transportation digs tunnels and stuff yeah i forget what someone said in a post on x but i my answer was
1:37:10 mars obviously and people were laughing at that and then as they were talking about they’re saying of
1:37:16 course they’re going to put that transportation system underground we learned why you shouldn’t
1:37:22 have it on top of the ground from earth so just a little things catch me in a funny way it’s not
1:37:28 the craziest they’re just like oh maybe that is the way things are going to work i wonder if if felon
1:37:32 dies before we get to mars or if he just dies in the next 10 years from anything from any cause
1:37:38 how much of an impact that will have on our rate of progress generally with space and electric vehicles
1:37:45 and humanoid robots could be quite profound he is getting us so far along that you know there’s just
1:37:53 going to be a runway he’s created for years and years think about it mars 2040 50 you know
1:38:00 kathy thank you thank you for doing what you do and um that’s a sort of multi-faceted
1:38:06 point of gratitude because you do so much um you do so much in educating all of us in terms of innovation
1:38:12 investing and what the future looks like but also from your funds perspective and your company’s
1:38:16 perspective you do so much in open sourcing and putting the research and the work that you guys do
1:38:21 out into the world when you don’t necessarily have to but as i’ve heard you say it’s a great benefit both
1:38:26 to the world but also you do it because it also brings people to your fund right and um it certainly
1:38:30 did for me that’s how i came across you many many years ago when i had was reading some research with my
1:38:35 my brother around investing in the future and innovation and understanding your thesis around
1:38:40 all of those things but also from the education side you’re distilling this complex research into
1:38:46 simple um language and information that the next generation can understand so that this
1:38:49 moment of transition doesn’t catch them off guard and that’s an incredible thing but
1:38:54 but i have to say as well you’re such an inspiration for the very fact that you have achieved what you’ve
1:39:00 achieved in your life it’s it’s exceed it’s extremely rare for someone and i don’t always like to talk
1:39:04 about gender or race or those those kinds of things but it’s a point of it’s a particular point a
1:39:10 pertinent point in this case because you have succeeded in a very male-dominated industry and i
1:39:16 think just your presence your existence alone is going to inspire lots of women um and men people like me
1:39:22 um to pursue finance and investing as a career oh so thank you so much for doing what you do and
1:39:25 thank you for being who you are it’s incredibly important and you’ve demystified so many things
1:39:30 for me over the years even though we’ve never met um but watching your videos and reading the research
1:39:34 that you guys put out so i’m going to link all of that below and link to your websites and your funds
1:39:39 and all those things so people can learn more but yeah thank you thank you steven thank you for doing
1:39:45 doing what you do and and it’s been an honor and a privilege and i know you have an incredible audience
1:39:52 so you’ve built a fantastic business here and i have a feeling uh that this new world that that
1:39:56 you’re fearing is going to be very good to you i hope so yes thank you
1:40:05 the hardest conversations are often the ones we avoid but what if you had the right question to start
1:40:11 them with every single guest on the diary of a ceo has left behind a question in this diary and it’s a
1:40:16 question designed to challenge to connect and to go deeper with the next guest and these are all the
1:40:22 questions that i have here in my hand on one side you’ve got the question that was asked the name of
1:40:29 the person who wrote it and on the other side if you scan that you can watch the person who came after
1:40:34 who answered it 51 questions split across three different levels the warm-up level the open-up level and
1:40:40 the deep level so you decide how deep the conversation goes and people play these conversation cards in
1:40:47 boardrooms at work in bedrooms alone at night and on first dates and everywhere in between i’ll put a
1:40:53 link to the conversation cards in the description below you can get yours at thediary.com quick one
1:40:58 just give me 30 seconds of your time two things i wanted to say the first thing is a huge thank you
1:41:02 for listening and tuning into the show week after week means the world to all of us and this really is
1:41:08 a dream that we absolutely never had and couldn’t have imagined getting to this place but secondly it’s
1:41:12 a dream where we feel like we’re only just getting started and if you enjoy what we do here please
1:41:19 join the 24 of people that listen to this podcast regularly and follow us on this app here’s a promise
1:41:24 i’m going to make to you i’m going to do everything in my power to make this show as good as i can now and
1:41:28 and into the future we’re going to deliver the guests that you want me to speak to
1:41:31 and we’re going to continue to keep doing all of the things you love about this show
1:41:41 thank you you