Amazon bells the cat on AI. June 20, 2025

23:38I'll look after. I'm the expert. You just go and keep working. I'll take the fees and do it. And I don't mean that in the slightest. What I do mean is that because of those changes that are happening, because of those people who are, and you're right, investing is investing, but given the role of super as a retirement vehicle, I have no issue with people. If people want to gamble their own money on a speccy minor ETF, knock yourselves out. I mean, don't, but if you want, I'm not going to stop you. and I don't know people yelling at the pod machine now saying super's my money just back off um super you know in that context of to your point people doing real jobs they shouldn't have to decide whether to be in high growth or conservative or cash you know if they want to I guess we let them to some degree but we've promoted choice to the point of an ideological right and it maybe should be but at some levels like we're going to take your retirement savings contributions through your whole working life and make sure there's something left at the end.

24:30And do I, am I saying that I'm the grand pooper who should decide or that the overcharging, you know, millionaire finance bro should decide? No, of course not. But I am saying that, if a fault ETF will do me, I'll get to ETFs in a minute. But yeah, you know what I mean? Like that's, rest shouldn't, in a perfect world, rest should have been able to say, we are going to manage our fund the right way. And again, I know there's no right way and I'm hedging every time I say anything because I know there are examples of horrible behaviour and bad behaviour, just poor returns, AMP's returns, fun returns over years have been atrocious, right?

25:04So could the average person have done better than AMP? Yes. But it does, it just, there's something there, mate, and maybe I go back to my preferred idea, which is a national default super fund run by the future fund, just in ETFs or something. Just like, because, you know, I don't want 58-year-old John or Beryl or Sam or Susie saying, oh my God, that feels really scary. I better go to cash just in case. when they don't have the background to know. You and I just talked about the fact the market fell and then recovered. People on social media said, I'm going to cash because I know what's going to happen next and I don't want to be caught up by this.

25:33And I'm not saying they would, I'm not saying I was always right, they were always wrong. I just, for a Superfund perspective, I don't think we serve the national interest and the interest of the average Superfund member particularly well by inviting them to take a view. No one, no one, the mechanics are saying to me, Scott, I can fix your car one of five ways. Which way do you think? Do you want the aggressive solution should not observe the balance so she's like you're the expert dude fix my car and yes there'll be dodgy mechanics but at least the car gets fixed properly right and if you had some sort of default fund which was free of or as free as possible of all the incentive you know dramas i don't know i just i think for me the story here is i think it's clear at the time frankly and subsequently that rest super members who change their options were making bad choices yeah i think it was objectively the case i think subjectively the case someone listening will say but it should be up to I should be able to get a cash.

26:24I get it. And the problem is this audience, by the way, is not the average person. But it's also the same person who cries foul and wants someone to help me out. And what's the pension if they screw it up? You see it all the time with, not to raid into another territory. Oh, go on. Well, some nurse, you know, buys 18 different negatively geared properties and it goes bad. And it's like, oh, the bank should never have lent me that money. It's like, yeah, but if the bank had withheld it, then you'd be angry about that. So I'm all for personal responsibility. I'm all for personal choice. I think you absolutely do.

26:55But then you just, you, part of that is you can't then turn around and go, oh, but, but, but I should never have been able to do that. It's like, well, you did. Welcome, welcome to consequence, right? I agree with that. Although I don't think as policy we serve the nation well. So as government policy, by saying to everybody that the nurse, the tradie, the brickie, the factory worker, the taxi driver, you should choose your super option. I just, you know, you should choose the surgery. Which surgery would you like? I don't know, doc. you're the expert. You can plate it or we can fuse it. You choose.

27:26Do some research. Jump on Google. Ask a couple of blokes on a surgery podcast what they reckon and then go and make your own choice. It's like, you know, I just, I think, again, I'm awful. We've overcomplicated it because it's, we have. It's just a cash, I mean, it's a gravy train. You want to be on that train, right? Business is good, you know, brother, business is booming, right? Like you want to, you have mandated cash flows 10 % of every, more than of everyone's income in the car. countries 12 in a week and a half time 12 of everyone who earns money in australia is going into into a pot salary yes not not small business but yes although yeah well yeah sorry but you know do you want do you want some do you want some of that actually we don't like clip just a little tiny bit of the ticket yeah we we are we are two percent of the global economy but we've got one of the biggest retirement funds in the world like it's a honeypot it's brilliant but i come back to my point that that is going to be tapped it's i over my lifetime i don't know when i i would bet my first born on it.

28:21Sorry, buddy. It's going to happen, right? For all of these kinds of, yeah. So anyway, it's just so horribly done. But I just, it's what's interesting are these sort of stories coming out now, which is we just said the other week, we're at record highs, baby. Yes, yes. We're at record highs. Unemployment's what, 4? 4.1. I got a forehandle on it, right? And I'm the first to say, well, there's a whole bunch of problems in the economy, right? These are very high level surface sort of numbers that there's more nuance to it than that. But we're actually having one of our major super funds going, there could be some problems here.

28:59Like, what, now? I can understand that the market was down 30%, unemployment was 8%. It's just like, it's sort of, if ever, I just, my greatest concern with all of this is just, it reveals how anti-fragile it is, the whole system that we've built, which is - How fragile it is, you mean? Sorry, how fragile it is. Sorry, you're right. You know, and just sort of like the whole, you know, the North Star with designing a system such as this should be like, oh, we must be as anti-fragile as possible. Because if there is one thing that, like, the sun will rise tomorrow, you will die at some point in time, you'll have to pay tax along the way, and there will be a share market calamity at some point over your working career, probably three.

29:40Yeah, correct, exactly. Probably four. 100%. You know, so like, maybe a good idea to plan for that. Just saying. Just saying. We got there starting to talk about war and markets, mate. So let's very quickly go back to that half an hour later. I always love the conversation. It's great. Just to come back to that, mate, I don't really have a so what other than to remind our listeners that things generally improve over time. That, by the way, Second World War, market finished higher than it started the Second World War. So keep that in mind. is it going to happen again? I don't know. Just remember what horrible, horrible, horrible time that six years was and the market finished higher.

30:19Remember that things improve over time. And I think I suppose to that shorter term point is for all that people still think, well, okay, but in the short term I can play it, right? I can sell now and buy back later, all that kind of stuff. Your point, we're at or near all-time highs. The US market fell 15 % and recovered all of that in the space of four months, five months. Those who said, you know, Trump is killing the world, new world order, everything's going to zero. It's all going to be, you know, again, maybe it still happens, but it probably doesn't. And just kind of, they don't ring a bell at the bottom is the other thing.

30:48You know, for all of that, for all of that, you know, who knew that it was going to fall? Some people might put their hand up. Okay, do you know how far, how fast, when it was going to stop, when you're going to buy back in? Feel free to at me on Twitter if you were the person showing me the trade receipts where you sold on inauguration day and bought back 15 % lower and then you've held the whole way through. If you're that person, good luck to you,

31:11Exactly. So because even in the circumstance, what you see in hindsight as absolute wasn't certain at the time. So even when you go, it's not like I picked it exactly. I knew it was going to happen. I knew this. I knew that. Well, you got lucky because you couldn't have known it. So whatever premise you think of, I knew it was, I got lucky because I thought I knew it and I happened to be lucky to be right, rather than there was something obvious that was going to tell you this was the bottom or this was the top. So I just want to kind of keep that point front and center. And the other reason, mate, is oil prices have shot up, as I said.

31:41And the questions come a week later. Is now the time to buy oil? Because the oil price is high. And again, just remember that unless you're in front of the trade, jumping on at the end when everyone already knows everything you already know means everyone's already positioned accordingly. Now, it doesn't mean you can't buy and the price goes up. It may well. God forbid that the world gets worse. But maybe it does. But maybe it doesn't, right? And so just because it's happened, I get the question about gold a month or so ago. Oh, gold's on record. Is it time to buy now? So, well, maybe, but maybe not, but probably not because the price is high.

32:11That's not the tail you're looking for to make it worth buying. All you need to know really for the vast, vast majority of people in their interest on any particular asset is, has it been going up lately? Yes. And if the answer is yes, then there is something to be said for momentum in prices because it's just sort of like higher prices attract more people, which make the price go up, which attract more people. not that I would ever ever ever advocate a strategy on that because it's not like turns yeah yeah it's not like a cannonball like in terms of the laws of momentum it's like shooting a cannonball that just stops halfway through and then comes back at you because that can happen in markets right um some weird cartoon cannibal what you know wiley coyote style I mean we see you and I've been in this industry for decades right it's like when when things are bombed out and you're going oh my god this is this is exactly what everyone says that they've been waiting for things are super cheap this isn't this fantastic and like you you can't you can't get arrested and then things are super toppy and frothy and whatever and like there's people just beating your door down to like oh i need to i need to invest i need to invest so it's it's pretty it's pretty scary um yeah what what so so with the with this latest situation i agree i think you've framed it up well um but what else is your is your view do absolutely nothing different so there's two and i don't want to i'm saying that as if i'm about to suggest that no no i disagree i'm just but but i'm yeah so i've said this before in different contexts but two two things for me is firstly if you're not doing it right start doing it differently and so and so what i mean by that is I'm not saying everyone listening now should just do whatever they're already doing.

33:59Yeah. Because if you, and our listeners are smart people, so they probably should, but other people not listening because they're not that smart may have bad strategies in place. In which case, if this is a wake up call, then yes, fix what's going on. So I'm not saying everybody do nothing differently. I'm saying if you've realized all of a sudden, for example, you're not sufficiently diversified, that's a good lesson to turn into something. So maybe do something a bit differently. If you're using leverage and you got close to a margin call, you know what, maybe do something differently because next time you may you may get whacked um so so is it should you do things differently yes if you're not doing it correctly now i'm not i don't have a mortgage on correctly but you know what i'm saying um do it do it properly uh and if you're not doing it as well as you could then yes use the wake-up call second thing so the second thing i would do differently only to is look at areas where an unexpected event or circumstance may have actually changed the investment horizon for your company or companies plural right if you are someone and tariffs are a great example of this if you realize that you're massively concentrated to canadian manufacturing selling nine percent of your product to the us then should you do something differently yeah probably now that goes back to the diversification thing i mentioned before but you may not have thought about source of products you know country of manufacture as a as a diversification consideration but now i think we know that you can and should so if it's opened up your eyes to areas where you are exposed to an unreasonable amount of concentrated risk and i say unreasonable not just concentrated because you can be concentrated without being unreasonable if you're doing the work properly.

35:21But yeah, in that circumstance, with this one, with the wall, I don't know. Are you more exposed to the energy market than you want to be or underexposed to the energy market? They are not unreasonable questions to ask and maybe consider changing. I wouldn't on that score, but you might want to do that for yourself. So am I doing anything differently? No, I've done absolutely nothing. I've not bought or sold anything as a result. I have not changed my investment strategy over the last years, really. I mean, I find better ways to implement it, hopefully. I probably am, the tech boom and bust was a great example, right?

35:55Of everyone who's like, I'll text the answer. It's all about SaaS. I was like, I'm not touching that anymore. We've got an upcoming mailbag question in a couple of weeks on exactly this. I won't steal the thunder of that one. But, you know, there are times when you feel like you're right because the market is telling you you're right. You find out that's not the case. Yeah. So if anything, I would use all of, anytime you get a market dislocation, use it as an opportunity for you to go back to your core investing principles and values, go back to your process and say, does the process still work, firstly?

36:24Secondly, do I need to reorient myself to the process? You can get really lazy and really hubristic when things go well. And you can stop being as, what's the right word? Critical, clinical is a better word, in your investing. So for me, I'm a value first guy, right? Sorry, quality first guy, all about quality. And then I'll build out from there. But can I convince myself that something of lower quality is worth investing if the price is going up, but the growth rate looks good and everyone loves it? And can I? Yeah, of course I can. Can I think, does my definition of quality expand as the market goes higher?

36:58Probably, yeah, really, honestly. And so when you get a fall, it's like, all right, okay, I got burnt in that one. What should I have been doing? So do differently, no. Recommit to the things I think work and try and be more disciplined. Yeah, that's probably the thing I'm doing differently. and by the way not as a knee jerk not as a it hurt me there so that i'm going to change anything because i'm not in fact if you change as a result of these things you generally end up making it worse because you say well i'm never going to buy that again because it fell 15 last month well if it grew 400 last four years then yeah it's probably worth doing and taking the risk so don't don't don't short-term trade don't base it on the recent past only but take the opportunity to learn some lessons and recalculate recalibrate your investment process to make sure you're doing as well as you should.

37:42That's me. What about you? No, I'm actually, I'm the same. I really led into that with hinting that I've got some diversion to take. No, I really don't. I don't at all. I mean, I think I've always expected this to happen. Let me clarify that. It's like, wait a second. I'm not some geopolitical strategist that called that in June of 2025, Iran and Israel were going to go toe-to-toe. And of course they didn't. but it doesn't take Nostradamus to think that the humans are probably going to fire missiles at each other at some point. That's a pretty safe bet. And, you know, particularly in that part of the world and particularly, you know, the way things have been going.

38:21So it was sort of like, you're surprised by this. That's, that's, that's the surprising thing to me is that people who do this for a living seem surprised. Yeah. But I always say that you look at the, the way the market responds to these things. Like, what did you expect? Like, what did you seriously expect? It's like this, this happens like all the time, like all the time. Right. And so that's, that's, yeah. Yeah. I, and what I'm, what I'm always trying to do is that when you're making any kind of investment, you're obviously focusing on the upside. How much money can I make for this? But it's just so important to go, yeah, but what can go wrong?

38:57And of all the things that can go, you know, and, and, and is this investment, how is that going to act in that kind of scenario? And so it's sort of like, Like, yeah, I didn't know the exact nature or character of how events were going to sort of unfold, but there was always going to be some stuff going on. And so as you say, I think you said it really well, which is why quality is always first. Just own good stuff. Yes. Own good stuff, right? Like it's just, you don't want to be picking up. Good things don't always happen to good people, but they tend to. They tend to, right? Don't, if you're, so much of the strategies and nonsense out there is picking up pennies in front of steamrollers.

39:35Like it's a great gig. It's a great gig for a while. It's just like, oh, there's one. Oh, there's another one. There's another, you're picking up money. Oh, I'm making all this money until you should get stuck in a crack. And then it's like, things go bad very, very quickly. And, and, you know, I'm just, I should get paid every time I say this word, but it's just asymmetry, asymmetry, asymmetry, right? I want, I don't want an investment that, that like, oh, it should be okay. And if it does, maybe I go, I make a little bit of a return, but if it doesn't, I'm completely wiped out, which a lot of people who know a lot better or should know a lot better continue to sort of do those kinds of strategy.

40:09Maybe back to the earlier point, moral hazard is a component of that. But I'm just constantly aware of the downside. What have I got wrong? What's going to unfold here? And as this stuff is sort of, I'm reading about it now, I'm looking at my portfolio and I'm going, yeah, I'm pretty cool. Yeah. I'm not, I'm not, I was going to say happy about the share price. Well, share price is doing great at the moment. So I'm happy in every regard. Well, it's gone back nicely, yeah. Yeah, but even if the market, even if my portfolio was down 30, 40%, it has been regularly, recently, not that long ago. If you go to strawman.com forward slash strawman, like if the free account hides the actual positions, but you'll see the chart of my performance there.

40:51And it's like, there was a rough period there for a while. I really, I just like wore it big time. It's easy to sort of say, oh, whatever. It didn't bother me. Yeah, of course it bothered me. But I didn't do anything differently. It was always like, yeah, but most of the stuff I'm holding, I'm pretty confident in. So has anything changed? Yeah, the price has changed. Okay, but anything important has changed? No, no, nothing's changed at all. So that's what I would take this opportunity, if you are feeling a bit nervous, to just stop trying to look into a crystal ball because it's a waste of time.

41:24Just ask yourself, scenario plan, right? Like, okay, full-on nuclear exchange here. What does this company do? Maybe that's a little bridge. I'll just make bomb shelters or put spike beans in caves. We could be in trouble on that list. Step back. I take the broad. You know, and I don't know. The biggest equity position at the moment is catapult, right? It's like, ah, what's going to happen to professional sports? Is everyone around the world going to stop watching professional sports? I don't think so. You know, are professional sports teams still likely to want to give their players an edge? Yes.

42:01I mean, I just don't think that there's going to be any kind of serious long-term structural impact. Or my stealth group shares. No, I don't think anything's really going to happen to them in terms of industrial equipment. Like, that's still going to be needed, you know. I don't know. I shouldn't be listing my stocks. Like my point is, is that go through what you're holding and ask. And it's like, I do worry, like drone shield's a good example at the moment, right? Not to, I've had shares in them in the past. I'm quite happy of how they've performed, honestly. But having been a shareholder, you see that a lot of people are like, oh, things are really scary.

42:40Drones are a thing. That's why I'm going to buy. And it's just like, whoa, that is 100 % the wrong way to look at that particular company. And I don't want to say anything negative about the company. I actually think they're doing very interesting things. But the share price is very much driven on first order thinking and without any view as to what might happen if some of these tailwinds don't proceed in the way that you expect them to, right? It's like I'm making an investment on a very peripheral kind of view of the world and one that is extremely bullish for this story. Yeah. but I've not considered anything else outside of that.

43:19And I just think that is, so please don't at me and say, well, what? No, no, no. I'm the, all the drone shield people who love it will be, it's not about the company really. It's just, it's just a good example of, you know, no, think about it now. I think, think about for whatever reason, everyone's singing Kumbaya and holding hands in six months time and world peace has been ushered in. I don't know. Right. It was just like, is that still a good thing? Not that, not that it's going to happen, but think about these things in advance. That's, that's the prompting I always have when things get, get scary is like, cause you, you should have thought about it already and you clearly haven't.

43:54Cause that's why you're nervous. So take the opportunity, take the opportunity now to do that. And if there's anything that you go in there and go, gosh, this only is good. If, if, if, and if, then you've got a bad investment. You've got a fragile investment. You want, you want the, you want the high quality anti-fragile investment. And yes, you're still going to be on a roller coaster, but, but, but it's going to, It's going to end. It's not going to fall off the tracks. The only thing I'm going to add to that, I think it's perfect, is just you say investment. I'm just going to broaden that to portfolio as well.

44:23Sure. So do it at a company level and then do that company in the context of a portfolio where you're not taking concentrated risks on individual risk areas, whatever they may be. It can be currency, geography, industry, country manufacturers, as I said before, all that sort of stuff. Just be mindful of what that looks like, I think, too. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

44:51Mates, let's change tack a little bit. You mentioned ETFs, what we're talking about, superannuation. And I just want to throw this one in. I don't think I didn't get this one to you. I put the note on the agenda as we were chatting before. I don't know if you saw yesterday, so Wednesday, the Vanguard announcement about the Vanguard ASX 300 ETF. VAS, is that the one? Yeah. We don't even talk about codes. You know that. We talked about companies and investments. I deliberately had to say it. VAS is the code. They hit$20 billion in funds under management. They continue to be the largest ETF in the country.

45:25Here's the stat. The amount of money they're managing in that single ETF quadrupled in the last five years. Wow. It's astonishing. That's the story of the ascent and descent of ETFs, right? It totally is. Totally is. you know what's really funny too people are really offended by ETFs some people on social media I post that just like man this is amazing that was all I said right and then some say yeah well how much that was funds and how much that was performance it's like it's not really the point someone said yeah what about the other ETFs like that's not really the point either it was just a really I don't know if it's stock pickers who don't like it or people don't like the fact that Vanguard's not for profit or I don't know what it was but it was a real and g'day if you're listening and you post it I'm not trying to bag you individually I know a lot of people follow me on Twitter and listen to this and vice versa but I just was really the response was fascinating like somebody didn't deserve it or it wasn't okay or there was a yeah but it was like it just is what it is you know there's a couple people who say well it's been a lot of money printing I'm like dude not 4x in 5 years even Rams are going to play money printing on that one but I thought it was people like yeah have you seen the amount of money printing I was like okay but you know man with a hammer this is not that so yeah I just thought it was fascinating man because again most of it is not actual performance that would have been driven by money printing.

46:41This is genuinely just people going, you know what? It's fun inflows. I want to invest in that ETF. And again, I don't really have a so what, man, other than it's just really, really meaningful. I think it's, you know, I like Vanguard as an organisation for the reasons we've talked about before. But even aside from that, just for any, and again, passive ETF to 4X in five years in terms of the funds, I thought it was just amazing. And the growth, we know there's more inflows into passive ETFs than managed funds. They're winning that war and winning it comprehensively. Speaking of, we'll talk about AI in a minute, but speaking of kind of burning platforms, if you're a fund manager that's not delivering out performance, look out because there are so many better alternatives these days for people to grab.

47:23They haven't been for years, but it's almost, to be a steamroller, mate, it's kind of that. It's kind of the snowball at the same time. It's like it's smaller, it's a bit bigger, it's a bit bigger. People look around and say, oh my God, what happened there? And it's the overnight success that takes, in this case, decades. Right, exactly. and all of a sudden I mean not that we've talked about for ages people know what's happening but if you see the sheer quadrupling I mean if you'd asked me in 2020 so it was five and a bit years actually if you'd asked me in 2020 how much are ETS going to grow by I'd say oh faster than the average market in terms of fund not returns maybe 10 % a year 20 % if you're lucky like quadrupling in five years I don't even know what that compound rate of that is it's probably 60 % is it no maybe not anyway I'll do the numbers but just mind-blowingly phenomenal how much money is going into passive ETFs?

48:08There is nothing more powerful than an idea whose time has come. JP Morgan? Probably. Oscar Wilde. Mark Twain. Mark Twain.

48:24Like ETFs just change the game, massively change the game. And yeah, I mean, it's interesting, right? They charge not 1 % in management fees, not 0.1 of a percent, but 0.07 of a percent. So$20 billion, they make$14 million in fees per year off that. But it's good business, right? It's good business still. I mean, even though that's, I'm not trying to suggest that's an egregious fee. It's very, very, very, very low. But when you're dealing with very big numbers, it's like, it ain't bad, particularly when this is largely run by a computer, right? Because it just follows the index. So there's no There's no big committee of high-paid gigabrains there trying to figure out what do we buy, what do we sell.

49:06It's like, no, the computer will just do it all for you. So it's a nice little business. Like, these things scale really well. To me, though, it actually points to a more fundamental problem, I think, because it's kind of like, it's not like everyone woke up one day and said, yeah, I'd really love to play the markets. It's just like, again, it's like, what do you do as an average person? It's like property I'm priced out of, right? I don't know. Share market stuff, that's hard. That's hard and it's risky, right? It's like, I could do emu farms or stupid crypto coins or whatever. It's like, put it into an ETF.

49:37Yes, right. And that why I'd say COVID is a big part of it as well because there is no better incentive or encouragement to start taking investing seriously than watching a quarter of your purchasing power vanish. Yeah, that's right. Savings just eviscerated, right? And it's just sort of like, I guess I have to invest. And to my earlier point, well, this thing seems really easy and low risk, and gosh, it's been going up, so I guess I'm going to do it. And as I say, it's a super powerful idea. We, as stock pickers, in direct interest to our own companies and livelihoods, often spruik the benefits of ETFs because they are such a good solution.

50:21They're amazing, man. They're fantastic. For people who don't want to try to beat the market, ETFs, they're a godsend. They are literally a godsend. It's like, you mean I don't have to do any of this so I can still get the market return? Yeah. I mean, it's brilliant. Jack Bogle should be knighted and sainted and whatever else, given the whatever honors you can find for him because it's created an enormous amount of wealth for a whole lot of people who now feel they can get into the market. They can do it without even trying to pick stocks. They're probably not going to get scared out when the stocks they pick, despite the best efforts go badly.

50:49The other thing is social proof. And that's the idea whose time has come. By the way, Victor Hugo was the closest, apparently, 1802 to 1885. but I found it's a range of I looked up while you were talking a range of potential quotes and a combination of thoughts but Vicky Hugo is the one who normally gets credited for it but yeah the social proof of that of just like everyone else is doing it so I can that's the snowball right it just attracts more and more people as it goes it's incredible now to your point about stock pick because it gives us an opportunity too I think to some degree because the few people who are competing with us for ideas is great and if it does create distortions that's something that you can potentially profit from you know I don't really have any further I just lament it in a way because it is unfortunate that we sort of are forced to do that and it's also I think what we haven't yet had is particularly in the Australian context there's a lot of people who have discovered, and I'm not being critical, these are great products they are the best product for most people who are interested in getting exposure to the market but no one's had since these things have been introduced and since they've gone mainstream in Australia, we haven't had a share market crash.

52:01Yeah. We had COVID. I know we had COVID. That was a month. That was a 30 % blip in a couple of months, right? I mean, fastest bear market in history though. Not nothing. I'm not saying, yeah, yeah. But it's like, again, history is useful here. Like you can have bear markets that last two years and drop 50%. Yeah, that's correct. I'm not going back to 1304 here, like multiple times in the last few years. GFC was 16 months, I think. Yeah. It's an awful grind. Just kept going. Oh, and something like 10 years to get back to the previous peak, you know. So it's sort of my worry is that, no, that's not a worry.

52:38Again, it's just something that you must go into eyes wide open. Of course. And it'll happen. It'll happen at some point. And then people are going to be people and they're going to panic. And this thing that was really great and easy, and it gave me this wonderful exposure and it helped me sort of, you know, get out of the shadow of inflation, et cetera, et cetera. Oh, great. I'm going to sell because it's scary, right? And it's like, that is going to happen. So if you are listening to all of this, I'm just, again, back to the earlier point here, internalize that beforehand because it's going to happen at some point and then people are going to be going, well, you're going to see that$20 billion shrink radically, A, because the fund itself, the market has gone down and B, because people withdraw their funds.

53:23Yeah, that's true. I don't know. I don't know what my point is other than just it's not always rainbows and lollipops, right? Not to be doom and gloom, but it's just sort of like these, again, it's the cake and eating it too kind of thing. Yes, low risk. Yes, easy. Yes, good returns. In small riding down the bottom, on average, over the long term. And we'll be volatile in the mid-time. Exactly. That's not a reason not to do it, but people miss that part. Like, yes, on average, okay, over the long term, right? Not every single point in time is not going to go up 10 % per year. So just bear that in mind.

53:57I'm relatively hopeful, because I'm an optimist anyway, that people who bought the ETF, who drank the ETF Kool-Aid, have also drunk the long-term Kool-Aid and the dollar-cost average Kool-Aid. And maybe that's something to hope, but I'm genuinely hopeful that most people who've done it are doing it because they're doing the, they're doing the frankly Scott Pate's got a lot to you know a lot of credit for this stuff Jack Boge for inventing it a whole lot of communities of people the fire community others who are like we got this the people who are getting into ETS hopefully they're doing it because they get the whole story now it's not gonna be everybody but I'm hoping and maybe just beyond hope maybe just because I need to believe that actually it won't be quite as bad as it might otherwise be I could be wrong but I'm hopeful there won't be as much freak out at that point yeah with luck we'll see let's move on we've taken up a heap of time we've got a couple of things left on the agenda so we'll see what we get to I'm going to throw in very quickly he says hopefully knowing we're going to talk for 25 minutes on it Jim Chalmers on Wednesday addressed the National Press Club and has said that tax reform is on the agenda has also said that the three million dollar super tax is staying because they've quote got a mandate end quote which I hate from anybody I just think it's saying we shouldn't do bad policy because people voted for it it's just the world's most stupid thing um do they have a mandate yes if someone comes with a better idea should you ignore the better idea and say well they voted for that thing no of course not they did here's the other thing by the way they changed stage three i think correctly despite having a mandate to keep it where it was because they wanted to change it this time they don't want to change super so they've got a mandate to keep it it's like which one is it guys oh you're politicians i get it so there's that what i what i really really like um in the offing if not in the delivery depending on what happens is that for the first time in a very very long time a government of the day and frankly any major party politician is actually talking about budget repair and and proper budget management now does it happen i don't know labor have been no it doesn't absolutely scared uh witless of every possible shadow and you know uh possible risk with the exception of stage three they did almost nothing during the last term of any significant consequence um mostly absolutely nothing if you're a labor voter out there just hear what i'm saying um frankly most labor voters should be disappointed that what they hoped for from their party didn't happen, which is a different thing.

56:08Again, I'm not going to give political advice. But the government, the Treasurer has said, we have an unsustainable budget. We need to take action to get it back into balance. Now, notably, he didn't say cut spending. He did say tax reform. So I think we can assume that's code for we'll put taxes up. Then whether, to your point, they have the guts, the whatever's to actually do it. That's an open question. I'm not sure history would suggest they do. Second term, maybe things change. maybe they do become emboldened if they remain high in the polls maybe they'll do something i don't know um but i will say at the very very least i'm glad it's being talked about i hope they have the guts to follow it through because we do need budget balance i will say when you say we should we should fix the budget but i'm not going to mention spending i think that's a massive missed opportunity we and i've talked about you know not wanting to be tarred with a doge brush but but recognizing that efficiencies are probably possible um so they're kind of squibbing the harder decision of actually let's look at savings as well that would be kind of nice uh but i don't know mate in in the in the world of in the world of the least worst at least we're talking about and i'll i'll give the credit the treasurer a little bit of credit um range soon when they follow through obviously and you know you don't get your credit for talking about it you get credit for doing it but telling that is a start when neither major party talked about the election neither major parties talked about it for how long 10 years gosh can't remember um So yeah, hopefully the treasure actually follows through.

57:31Yeah. Yep. We'll see. I know that they've arranged another talk fest, as you described as performance art, which is all it is. Performative nonsense. Yep. Yep. It's just... And by the way, can I put some bones in there just because you threw in my mouth, which I'm very happy to have. Why call a summit? And I see you off air. It's not like they're going to go, go, oh, I had no good ideas until I sat down at this table. All of a sudden, I've got a good idea. The fact that the idea of the government can't possibly at some point in the next two months send an email out to as many people as I want to say, hey, guys, we know we've got a productivity issue.

58:07You do too. You've probably had a thought about it. What do you reckon we should do? Get the emails back and then go from there. But no, we're going to have a round table with people coming into an office. They'll be on the news of all people walking in the government holding a summit on jobs and productivity. And so people walk in with their suits and then nod their heads and very solemn and serious. And all of a sudden, we have the media soundbites and 15 seconds of video on the nightly news saying, look what the government's doing to fix jobs and productivity. It's performative nonsense. Well, it's worse than that.

58:33It's worse than that. It's all of that. And then all of these ideas will surface and they go, yeah, we're not going to do that. Yeah. It's like a wrong commission. Ken Henry's tax review. Yeah. It's like anything. It's sort of like, hey, we really looked at this closely. We made a big deal about how we're open to suggestions. And it turns out that we had all these brilliant ideas. Awesome. Which ones are we going to do? None. Or this little one over here. And then we're going to roll it back a couple of years later. Like that's, that's the nonsense of it. So you look, I don't, again, I shouldn't be bar humbug.

58:58It's great. They're talking about it. I'm not going to hold my breath anytime soon. Um, again, I just point to, and I, some of, I've got to, I'm talking out of both sides of my mouth a lot here too, because a lot of the figures I quote, I just think miss the broader picture and what, what the econocrats sort of describe as a good economy would be what most of us in the real world would acknowledge as, as what is important with the economy. but at least in terms of the metrics that they look at. This is a purple patch, baby. We're doing wonderfully well here, right? And it's kind of like if we can't run a surplus now.

59:32That's it. If we, like. Well, let's see, we can, right? That's the other thing. We can run a surplus. Well, we can. We can. If we're not prepared to, yes. We're not, yeah. Like, so what's it going to look like? Again, I don't know. It's not saying it's tomorrow. I don't know what, but at some point in time, we're going to have a reset. We just, ah, right? Or we have just a long period of, you know, protracted period of sluggishness or whatever it happens to be. And then I'll be like, well, we have to spend. We have to spend for, quote unquote, the economy. And it's like, yeah, but we're doing that now in the good times.

1:00:01So I feel as though the reality is, the political reality is, is that all of the things that need to be done are for all intents and purposes impossible. Not impossible in any way, shape or form, practically, but politically. Politically unpalatable, yeah. Can't be done. unless you want to go send your party into the wilderness for the next 10 years. Again, people always talk about Hawke and Keating and Howard and Costello just to sort of balance it up there. I mean, they did some pretty big things that were for the greater good. In the modern era, I can't see it happening because we're too focus group driven.

1:00:38We're too short-term oriented. There's no big bold idea. I'm just so despondent with it all. So yeah, I take your point. Go, Jim. Follow through. Do something bold. Right. And the opportunity is for us to hold them to it. Do you want to talk about Rex or Amazon's AI, mate? You can have the choice. Well, Rex is just an easy one. In other words, it's just to say, oh. Tell me in a few words why that reaction. What's the new news and what's the reaction? So the TLDR is you've got a regional airline that didn't run itself in a viable fashion. And so like any business that is unviable, eventually you run out of cash and you can't pay your employees and you can't meet your obligations and you go out of business.

1:01:21And that's a little thing we call capitalism. And it's a kind of an important corrective mechanism to make sure that, you know, we do things in the most efficient way possible to ensure the widest prosperity possible, at least when implemented properly. So this airline didn't do that. And because it's a thing that flies, it gets treated as something different to every other business on the planet other than still works perhaps. It's just sort of like it's become this national emergency. And in reality, just left to its own devices, someone will come in, buy up all the hangers and planes and assets at bargain basement fire sale prices, and they'll refloat the thing and there'll still be flights going around.

1:02:03There'll be some disruption in the rest of us. But no, let's spend the equivalent of a first rate, first gold-plated hospital on bailing out this business. More specifically, the creditors to the business. Because they borrowed it. Part of their problem was they borrowed it up to the eyeballs. Because, again, we've got any fragility and resilience. Yeah, exactly. Hey, we run a really tough business in a cutthroat industry. Low market capital intensive. Massively capital intensive. Hmm. Hmm. How should we structure the balance sheet? I know. Let's take on ungodly amounts of debt. Nothing could go wrong here.

1:02:40We're captains of industry. yeah I'm paid four million dollars a year as the CEO but I'm worth it because I'm a genius and like and it blew up it blew up wow well that's really surprising so I feel the other airline ever that's tried to accept version of Qantas did the same thing right okay so I was like okay well you guys are idiots I guess you're gonna have your take your medicine oh no you're not gonna take your medicine oh no no me and Scott and everyone listening we're all gonna pass the hat around and the taxpayer is going to like bail you out. No questions asked. Like no questions. It just, it beggars belief.

1:03:13Anyway, I'm getting my pitchfork and I'll meet you all in Martin Place. Let's go. Because this is outrageous. You know what's worse? If it's possible. The government actually paid out a creditor 100 cents on the dollar to go away. Why? Because they didn't want, because the alternative would have been they bought Rex down. And the government was so desperately politically. Right, I know. I'm not defending it the slightest. I'm telling you why. I'm not saying it's okay. The deal was that the creditor basically was like, here's the negotiation. You love Rex, don't you? Yes. I'm going to kill Rex unless you give me the ransom.

1:03:46What do you mean? Well, they owe me$50 million, and I'm going to call the liquidators in right now. Or you can write me a check. What would you like to do, Mr. Prime Minister? I'll call that bluff any day. I mean, you're right. You're 100 % right. But even then, if you're a politician, all you need to do is explain, like, hey, I'm the Prime Minister of Australia. I'm not the Prime Minister of Rex Airline and its share lines. I'm Prime Minister of Australia, right? Which credit is, yep, yep, yep. There is 0.001 % of people that I look after who have a direct exposure to this, right? And of those people, they took investment risk, right?

1:04:18And as you would if you invested in property or shares. It's not about the airline. It's about regional communities. It's like Waila. The government doesn't want to save Seelworks to save Gupta's backside. They just want to be able to say, we kept Waila afloat because then we won't hate us. It's politics. It's not even money. It's politics. People are electoral politics. But even then, like how many people are in that particular electorate? And it's not about throwing them to the walls either. It's about just sort of like be angry, be upset, upset at those buggers that drove it into the ground.

1:04:45The ones that are going to get walk away scot-free with our money. That's who you need to be angry at. And also just remember someone else will come and fill a void. If there is a demand for this and clearly if people are very upset, there is very much a demand for it because we rely on all the things that they are going to say. We rely on it. It's super critical. It's like, wow, that sounds like an opportunity for someone to deliver a service and make money. Like that feels like very, like if I was an entrepreneur with a few hundred million dollars to invest and there's someone out there screaming, saying, we really desperately need this.

1:05:19Like, okay, I'll provide that and I will get a return for my investment. Like, I'll do that. So normally you're the optimist. I'm the, you're the senior, I'm the optimist. I agree with all of that, except you also know the realities of politics, right? Right. So the number of people actually fly on wrecks, There's a hundred times that many people who want Rex to exist because they want Rex to exist. So how many people are annoyed if you let Rex go broke? Every single public story where you've got an opposition leader out there saying, they destroyed Rex Airlines and they could have saved it and they didn't.

1:05:46And now good people of Bathurst and Gold Coast and Geelong and Wayala and Mount Isa and whatever. You haven't got an airline anymore. But that's when you stand up and go, you don't just take it. You stand up and you go, sorry, why am I being blamed? I'm the prime minister. I'm the government. I've got nothing to do with this private commercial operation here. I understand that you're angry. Here's the name and addresses of, maybe don't go that far, of the people that caught. Be angry at them. I hear you, mate. I think, again, our roles are unusually changed. I don't think that flies politically.

1:06:19I don't think people think that deeply about it. I think they hear Rex died on this PM's watch and they could have saved it and they didn't. It's their fault. The percentage of those people who go, but actually I'm not mad at the PM, I'm mad at the airline, are a fraction of the people who are. You're right, actually. Yeah, they let Rex die. That's a bad thing. Same as Whale, same as the Steelworks. It's exactly the same as the Steelworks, right? Yeah. Who actually, I mean, there are a thousand people, two thousand people at Whale that might be impacted directly and indirectly by the Steelworks closure.

1:06:47Yeah. But you know, you jump on social media, Matt. The number of people who want to justify Whale are being saved for all of the reasons that somehow justify it, take that away and say, this was the most responsible economic decision I could make. It's not going to fly with a politic. I'm not defending the government doing it at all they should have done it differently if you want to save it, save it responsibly take ownership yes, at least do that at least do that it's the no strings attached thing that I don't get 160 million dollars so far let's move on one more because we won't get finished angry you said it was going to be short Hulk angry there's a meme there somewhere with you with a green face I'm not clever enough you can do it with AI you'll follow the podcast if anyone wants to do that by the way send it to me oh please oh god ram angry it's 100 % happening now well I was listening at this point mate don't worry Amazon I mean it's a massive massive issue to bring up at the end of the podcast it's the benefit is we've talked about it a little bit before Andy Jassy is the Amazon CEO I'm an Amazon shareholder for the record he came out basically this week and said we will have fewer white collar workers at Amazon because of AI just outright and I posted on on Twitter that you know AI is not coming it's here and we've talked about it before you're a massive user of AI you've talked about it before I use it probably less than you but I use it a lot we can't use it for work for certain reasons at the moment largely just internal ones but yeah there's a question about whether our members want AI created content how it feels it's like you know people want to believe it's something done by hand if you use a tool does that make it better or worse we've even had somebody out team by the way say is it cheating to use AI?

1:08:26It's funny, you know, we don't consider using a calculator or Excel cheating because we could do the maths ourselves in our heads. So AI is just that, it's just an adoption process and people are getting their heads around it. Jassy reckons Amazon's using it for hundreds of different purposes right now, AI. He reckons there'll be fewer white-collar workers. It is going to, I'm bullish on the potential for AI to improve living standards. I am increasingly concerned there'll be a dislocation of employment for a period of time that might be months to years at some point, just because when companies...

1:09:00Again, I can't cite this because I was told it secondhand and it might just be complete rubbish, but I was told on social media last week, I think it was, apparently some company or department had like 150 workers and replaced with AI to do that particular task. This one that we didn't talk about at the time, Goldman Sachs CEO, David Solomon, said that they can... He records 95 % of an IPO prospectus can be written by AI. And all he really did is he was through the last 5%. Now, think about, he said, that would normally have taken six weeks work for a team of people. So, you know, I'm not a doom and gloomer.

1:09:34I'm not a scam monger. I don't like hyperbole if I can avoid it. So I don't have a prediction for AI. I don't have a prediction. Other than it'll be used a lot more. It'll create a lot of value. It'll create some serious disruption for businesses and for employees alike. and I think we're only just at the very, very edge of that. I think we'll see a lot more of it over the next couple of years. And the pace of it is much, much faster than most people realise. It goes back to where we started, mate, which is an idea whose time has come. That breakout, I think, is kind of happening now-ish. Even then, it still feels a bit under the radar for most people.

1:10:06You don't see it a lot. But I suspect in a year's time, we're having a very different conversation. Oh, yeah. I mean, it's always that it's a technology lands. everyone gets super excited it's going to change the world a year or two later it hasn't changed the world until we go it didn't work didn't happen not recognizing that these are usually a very very slow burn right like um like when electricity first came to to the large cities they were just it was just a mess and everyone was really up against it it took decades decades to roll out right and it's just like it changed the world changed the face of the planet from space looks completely different and forevermore will, right?

1:10:45And it's the same with the internet as well. I was there in the nineties. Like I was there, it was like, it's going to be everything. And it totally was. And it's like, it just took a long time. And that to me, it's so interesting when I speak to people about AI, because I'm so bullish on it. And funnily enough, I've got no direct investments in it, right? Because it's still too early. That's a conversation for another day. But in terms of what the technology means and what it will enable, I just think it's like the genie's out of the bottle. and people go yeah but I used it the other day and I asked it to do this and it wasn't perfect so it sucks what but a magic brain in a box just wrote you a 10 ,000 word essay in 30 seconds and it wasn't like to the quality of like you know some Pulitzer Prize winning uh you know writer and and it's not good and it's also it's also having used it pretty consistently for a while I'm still blown away because the improvements just keep getting there.

1:11:43So a commercial operation like Amazon and a pretty ruthlessly commercial one isn't rolling it out for vibes. Yeah, that's right. They're not going to do it because it's cool. It's the future. No, no. They're going to do it because they're going to save money on it and they reckon they can maintain or get pretty close to maintaining the service delivery standards. I would say improve them is what they'll be aiming for, by the way. A hundred percent. And, yeah, I think this is a prerecord, so it hasn't come out yet. But I really think it is going to have a massive impact on employment. Think about it this way, right?

1:12:16There's a thousand different, every sector, every occupation to some degree will be touched by this. But one thing that to me is super obvious is call centers. Because call centers suck anyway, right? There's a very low bar to improve on that. So if I can have someone who is like infinitely patient, infinitely more articulate, infinitely more well-connected and versed, instantly trained, learns continually, never sleeps. You know, it's just like in Australia, I just used AI for this. Okay. So, but there's a link here. I don't know. I can't do the verification on the fly, but let's just take it for what it's read.

1:12:55In Australia, there are 36 ,000 people who work in call centers. Your job's gone, right? Not now. Maybe not next year. It's gone. In five years, three years, it's gone. I would posit because that is right in the wheelhouse of AI. Globally, when you want to go globally, you've got 5 million people who work in call centers. That's gone. That's just, think about that, right? Think about drivers. How many people are involved in driving? Either delivery, logistics, Ubers, taxis, is just like, you know, as an occupation, it's quite a significant one as well. I don't have time to type it into the engine and do it.

1:13:35That's largely gone too. That's increasingly diminishing. Think about the people's like, I've got a sister-in-law who works in law and she's adamant that, you know, lawyers are too special. They'll never be displaced. It's like, well, maybe not the high-end silks. Not yet. But I tell you what, all of the interns, all the people doing discovery, all the people going through or doing the mundane kind of stuff, they're gone. They're already being displaced. You know, think of all of the lower level stuff is gone. It's, and people are too, I think, binary on this. It's like it either replaces everyone immediately or it's a fail.

1:14:12And it's like, no, it'll be a transition. But if, in fact, we've had interviews recently on Stromer with certain CEOs and they've been saying it's like, well, for us, because every company's got a lot of developers on it these days. Like, you know, program is a pretty important skill set. But it's like, yeah, we're not getting rid of our CTO. We're not getting rid of our lead developer. Our lead engineer, a team of high-end engineers are absolutely not going anywhere. But they now have an army of agents that can do the mundane, easier kind of stuff. And it's just going to wash through everything.

1:14:45And it accelerates too. This is the other thing. We like to think in linear kind of things. So it's sort of like, oh, it's kind of cool. It's kind of cool. Oh my God, this is great. I can't conceive of using anything else. Exactly. And I would say just on your point too with The Motley Fool, not to make any comment on the business whatsoever, but the idea of like people will feel cheated. I totally get that view if they feel like, wait a sec, some of this content is being written by AI. I think it will very rapidly shift to, I don't really give a stuff. If it's a human, if it's meat or it's silicon, I just want the right answer.

1:15:22if you're telling me that the Motley Fool has some agent that will be 20 times better than Scott Phillips at picking stocks right bye bye Scott yeah I want it tomorrow exactly yeah but don't you want a human no I want a good stock team oh better yeah same as coverage and we won't use it for I don't think well there'll be a time mate maybe we won't use it to help us pick stocks at the moment we're not using it to write what we call coverage so updates on company results for example right and the idea is kind of hang on I don't trust AI enough to have it do. I want to know a person's done this work.

1:15:56But to your point, at some point it flips into why are you not using AI to help you? I'd be getting better content if you let AI help you rather than pretend it didn't exist. It's like, you know, it's like, imagine a newsletter investment service was there. At the Molly Fool, we don't use calculators. We believe in doing it ourselves because calculators might make mistakes and it gives the right answer. We don't use the internet because that's cheating. Exactly. Excel is, yeah, cheating. We believe we should make our people use desk calculators with paper printouts. And you're not doing it in a vacuum because there'll be competitors out there that do and there'll be ones that spring up and they'll go, because we don't have to pay Scott Phillips $4 million a year or whatever you're on.

1:16:34I'm not going to harp my salary anytime soon. Sorry, mate. Seriously, come on. I didn't mean to loan it there. I'm not going to have this play to take less money all of a sudden. But it's like we can have Scott Phillips that's twice as good and cost us like$4.82 a month to, you know, it's like, it's, it's a game changer. I use it. I use it all the time for my research. And it's just like, again, you've got to, you've got to distinguish. What does that mean? I'm not going, Hey, chat GPT, tell me what stock I should buy. Enter. And then no, it's like, here's an annual report. I'm looking for this.

1:17:10What can you tell me? Oh, okay. That's really interesting. Let me just double check that. Okay, cool. Now, is there any other thing? And I'm just, I'm having a conversation i'm just using it as a tool i'm the one hopefully that's in charge i'm the one calling the shots i'm the one going in the direction that i want to go i'm the one that's using it but i've often used the analogy i'm using it in the same way i would use an intern fresh out of uni totally right like are they am i going to outsource my thinking and all the work to them no god no but he's in your report read it and tell me what you find yeah yeah why and i can do that for a 20 a month subscription yes yes i'm going to do that and i'm doing that and also It's a game changer.

1:17:46Yep, yep, yep. Makes you more efficient. So much more efficient. More output, all that kind of. I told you the other day I wrote an app, right? Oh, not an app. I built it. I've got no programming experience. None. I don't even know how to do HTML. And I put a valuation tool on the blog. It's free if you want to go check it out. And it's just, I'm not saying it's, I'm not saying it's like any programmer will look at it and go, this is Fisher Price kind of stuff, right? It's like, yeah, it is. There's nothing, nothing advanced. But I did it, I reckon, in about in under an hour and a half, probably something like that.

1:18:15So good. And I was like, and it would say, I'd say, I want to build a webpage that does this. And I was like, and it was just failed. I was like, oh, no, no, you got that wrong. Okay, I fixed it. And then I'll say, I want you to do this. And I went, I don't get what that means. Explain it to me like I'm 12. Okay. Pretend that, and it did. It treated me like an idiot that it needed to. And I was like, oh, that's what I do. And I just went back and forth, back and forth, back and forth. And now, now it's live and it works. like that is i i've said to you off air if i was starting the business again now time to market would have been reduced by an order of magnitude yeah and so what are the expenses i'm still needing a lawyer i'm still needing an accountant to sign things off but i can probably batch it all up and just say i just need you to review this and sign it thank you it's super easy i don't need a web designer for the for the artwork and the layouts and the ui kind of stuff which is like I'll do that myself with AI.

1:19:14And it might take me a week, but previously it took three months and 40 grand. Yeah, exactly. So anyway, I'm bullish. Me too. Bullish slash terrified. Well, and that's like, keep both those things in your head because I'm in exactly the same place, right? We're not going to stop. It will be huge. Those people say, oh, it's going to do this. It might do that. Okay, yes. But what? This is the time to accept reality and not pretend it doesn't exist. We've had, God love them, both the employers and union groups saying, you must regulate this, you must regulate that. It's like, if they do - Oh, that's coming.

1:19:48Well, if they do, we're going to get ring-fenced. We're going to get surrounded by everyone else who doesn't do it. Like, to pretend it exists in a vacuum. God love the actors and the screenwriters in Hollywood who went on strike because they were using AI. Yeah. If the Hollywood studio isn't allowed to use it, I'm going to do it, you're going to do it. We're going to put it on YouTube, and we're going to get a lot of people watching it. And you don't save anything. You circle wagons, you might delay your decay by a year or two. But this is not the solution. these things are going to come it's like the people went on strike because the weavers when the spinning jenny was introduced right yeah the blacksmiths when the car came through or yeah did you delay things by a bit maybe did you end up winning the war no did other people get a head start because you did that and so other organisations who didn't have those problems did yeah absolutely we're going to have to recognise the economic and competitive reality because it is not going away it is going to be here if there are going to be downsides then and they will be okay cool let's acknowledge them and deal with them let's not say we shouldn't use AI because because it's going to happen.

1:20:43The question is, how do you deal with the fallout? How do you deal with the impacts of causes? And that's my issue with employment. Like manufacturing, by the way, let's not pretend white collar workers are special. So it happened to manufacturing workers for years. But this is the white collar example. Those people thought they were saved because they were somehow knowledge workers. Guess what? Knowledge in a box, as you say, mate, is now 20 bucks a month. So two points. And I've used this all the time. I just love it, though it's the analogy of adopting gunpowder right like it's just like you can choose not to adopt it if you want but you're just going to be crushed right like there there are some things when it comes to adoption it's just like you you have to you know you're gonna you don't have to like it it might have all these unintended consequences that you're not happy about all these externalities might directly impact you and your profession and your livelihood yeah but ask japan how that turned out when they decided to stick with the samurai sword instead of instead of the musket, right?

1:21:38Didn't go well for him. Tom Cruise made a movie about it, right? Like, it's a thing. The other thing is, the other point I'll make is... Just Tom Cruise makes a movie about it doesn't mean it's actually a thing. Maverick isn't real, just so you know. What? I'm sorry. Oh. Yeah, I know. Sorry. Oh. Okay. But he is a spy, though, right? Oh, yeah, no, yeah. Okay, cool. The mission was impossible. It's fine. Okay, thank goodness. Thank goodness for that. But the other thing is we're at a point now where we don't have to make these statements based on what we think the technology will become. The technology could plateau where it is right now.

1:22:21In other words, if anyone who's ever followed the AIC knows that they go through what are called winters every now and again. in other words the the state of the art progresses in fits and starts and not steady steady it's not each year ai gets better every so often someone makes this massive breakthrough changes everything and then it plateaus for 10 or 15 years and then someone figures out oh there are these things called transformers that we can do this oh that's really cool and then it just but so so there are there are a lot of people particularly if you start listening to some lex friedman podcast with Sam Altman and all these others.

1:22:58They're real pie-in-the-sky kind of conversations. But my point is just like it stops today. Today. This is as good as AI gets for the next 50 years. It's still going to change a lot of things. It just hasn't been built into things yet. Yes, because people haven't used it. It's the adoption. Well, it'll develop as well, by the way. Your hypothesis is, I know you're saying it won't, but if it did. And that's the thing. The technology is out there. just the adoption of the technology is going to be the hugest part of this part. And then it'll get better. So it'll be incrementally better. But yeah, just like, hey, I can use a offer for this, but I'm not currently doing it.

1:23:34If I started doing that, would that make me more efficient? More output cheaper, whatever? Yes. Okay, well, I should start doing that. As they get adopted, that will absolutely do it. Yeah, 100%. Yep, yep. 100%. Mate, that's been a very fun conversation. We've covered a lot of ground, but I think we've probably outstayed our welcome on people's pod machines. That being said, I think a couple of days, they'll be happy to have us back. Will you come back on Sunday? I will come back on Sunday because it is the last time I will speak to you in five weeks. Also, ironically, no, this Sunday you have already spoken to me about three weeks ago.

1:24:05Oh, that's true. This next episode we record will actually be the last one we publish before I come back from holidays. So in fact, when this goes to air, I'm only a couple of days away. Oh, okay. There you go. Not this one. This one's going live this week. It's a bit confusing. Sunday's going live in five weeks time. Well, in the real world, it's the last chance for me to vent and get some stuff off my chest. So I'm very much looking forward to it. Settle in, fools. It's going to be a good one. All right. Enjoy the first half of your weekend and until Sunday morning. Fuller. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned.

1:24:37General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services License 400691.