The compound power of combination. May 29, 2026

24:39Someone's building the car factories, right? So it's true to an extent in part of the economy, but increasingly across technology and then technology is an increasing part of our economy. As you say, those power laws, the exponential – It is a power law. That's the world we're in. Scale-in variant. And it's interesting too. It happens with so many things in a way where it's just, as I say, it's hard to see when you're in the middle of a J curve. It just feels normal, you know, and it's like, oh, yeah. It is a very unusual human condition to expect that I will get radically better technology in five years' time.

25:18Like that is a very unusual thing. The other thing that, just to bring another, back to financial dimension is that what this shows again is the power of scale advantages and the reduction in cost curves. So why is it that I can buy, or buy, lease with pre-tax dollars? Oh, man, there's a whole episode I could, I'm benefiting from it, so I should shut the hell up. Shut up, Andrew. But you can get a, and I've got friends who are into cars now, But I can get a car that it's got faster than zero to 100 for like$50 ,000. You would have had to have bought a Porsche at some point to do that, right? And we are still at this stage.

26:04Given the – and this is why capital matters, and I'm talking about machines, and it's just like the capital stock of a country is its wealth. And China has obviously been on this path for a while, but they are at a point now where they can really flex their capital stock. We talk about the Tesla Gigafactories. and it's cool, and Elon's doing the same thing, but so is a billion people there, and they have not been idle, and they have these incredible mega factories where it's just like, you know what, I put in$30 of aluminium, rubber, and copper wiring, and out the end comes an iPhone that I can drive effectively.

26:43And my point is, in the same way that solar panels on Europe used to be very inefficient, very expensive, why did you do it? because I'm an environmental warrior, it made zero economic sense in the early stage. Now it's like, well, it makes a huge amount of economic sense. And the same thing is happening for these vehicles. And I feel as though you are going to see, because we were talking about our resale value, you start doing all the calculations. I actually don't think it'll be that great. I would not be surprised to see, you know, it's like the Xbox, right? The first Xbox is great. And the second Xbox, whoa, it's so much better.

27:20And the third's a bit better. and in fact, like, it asymptotes, it plateaus. And I think we're at the stage where it's sort of like the iPhone 2 was so much better than the iPhone 1, right? Yes, yes. And then the 3. And then it's like, you know what, are we up to the iPhone 11? Yeah, it's a bit better. Camera's a little bit nicer. You know, I'm going to upset all the Apple fanboys. Oh, don't you, mate. But my point is is that each generation only gets a little bit better, right? The incremental improvement. I think with EVs we're at the stage where it's like, no, we are Apple, we're iPhone 2, iPhone 3 maybe at this stage.

27:51And so the next three, four, five years, we are going to see my forecast. It's probably not a hot take at all, but I would be very surprised not to see a far, far higher penetration of EVs and to have their capability and costs be radically better than they are now. And then things will start again. It's an S curve. It's not just to the moon. Trees don't grow to the sky. Flat, flat, flat, flat, flat. That, oh, my God, hair blown back. Okay, flat, flat, flat, flat again. But that, everything happens in the middle of the S curve and we're still to the left of that, I forget the mathematical term for the curve, but we're still on the left of that centre point where the greater acceleration, accelerant, is in front of us.

28:38I think it's a really good point, mate. Where do we go from here? A couple of thoughts. This is on the agenda, by the way. No, no, no. I had to talk about my EVs, so let's just make it relevant. It was all going to happen. You know what I think is fascinating? So a couple of things. This is not an argument not to try and do things at a government level or a policy level or a country level that are worth doing and don't happen naturally without human intervention. Those things are always important and necessary and will always be. And, in fact, some of the inventions we're talking about come from deliberate strategy of government putting money into military and scientific organisations to just go and make things, right?

29:16GPS or the internet itself comes out of US military. So there's that stuff. Actually, really quick, a tangent on a tangent on a tangent. I've taken – I've got a Pixel phone and it's got Gemini built in. And when I'm in the car now, I went to pick my son up from school yesterday and I just said to him, hey – I'm not going to say the phrase because everyone's phone, everyone's going to take off and mine's going to. hey, you know, G-O-O-G-L-E. I'll probably work that out at some point. No, we're good soon. Teach me something in five minutes while I drive to pick up my son. It's like, so you got to ask about the weather.

29:53So would you like to know why the sky is blue? Sure, tell me that. And it's like, so you're a 50-year-old man. You should surely know that answer to that question by now, my friend. I thought it was ozone. It's not. I was told it was ozone. It's just oxygen in general, isn't it? No, it's the... Oh, so you're right, I don't know either. Oxygen, so it's the... It's the refractive index of the atmosphere, which is mostly nitrogen. Yes, so basically it absorbs... The sun sends rays in all different wavelengths, different colours, and the blue waves are shorter, whatever it is, different to the other colours, and the other colours are scattered, something's scattered.

30:32They're scattered more easily, so they don't make it to our eyes, but the blue waves get through, and that's why the sky's blue. Yeah, yeah, yeah. Anyway, and then it said to me, do you want me to tell you about, do you talk about the atmosphere, do you want to talk about GPS? Sure, tell me how that works. And it does the whole thing. But because the time is different because the satellites are further away, scientists have to include our science server relativity. Right. So that's all that too. My point of all that was just these things get, we think we're using them like, there's a lot being done in military and scientific organisations that we don't give enough credit to because we don't think, I say we, a lot of people don't think, oh, it's not worth doing, where's the output there?

31:06They're just taking away in their lab. They're not really adding anything to society. Get them out working on something that's going to actually add value. And then GPS happens because Einstein had a good idea and because and because and because and because. And I think that's just really cool. It is, yeah. Anyway, my original point was what was my original point? It's about EVs. The ability for that technology to not waste a crisis, right? So why might we have a massive uptake in EVs? maybe because Trump decided to innovate Iran or to bomb Iran, right? Why did everyone use QR codes? It was dying on the vine until COVID turns out and we had the check-in everywhere.

31:45And so those things, it's not to say... I would frame it slightly differently. I think it was always inevitable, but it just brought, it just fast-tracked everything. Yeah. Oh, 100%. And same with working from home. That's the other great idea. I would have said we were always going in that direction, but if COVID never happened, and it wouldn't be the thing that it is today, but it would still be a thing. Q-arco, it's absolutely. I mean, computers have to see, and they need more dense information than a barcode can provide. They existed. They weren't taken up. I'm not sure we would have gone in that direction.

32:16I don't think history is that directional and always obvious. I think there are examples in life where we've taken left and right turns. That's a hackney news. The beta VHS thing, you know, like it's just, you know, the Techiesol's beta was better. Why didn't it happen? because usage just changed the direction, right? So I think we can look back and go, it was always going to be that or it was going to be this. Personally, I think it's easy to think that. I'm not sure I'd give it that much. There is a path dependence to things is what you're saying. Yeah, and something's fault by the wayside that otherwise might not have.

32:46In a different world, the adult movie industry uses beta instead of VHS and we're all watching beta right now and we're not because we've moved on. But you know what I mean. They were actually an interesting story. There are actually more dimensions to it than that, which I think we might have talked about on the phone. You're right, though. I mean, yeah. But I mean, the point and the analogy is still a very good one. But what I also think is interesting about that, so you're very correct to point out that there is a happenstance element to it and that it could have easily gone that way. But once it has gone a certain way, it is locked in.

33:21So I think too many people get hung up on that. They go, oh, it didn't have to be that and we could always do that. It's like, yeah, that's absolutely true. Yes. But, you know, we all use AC power, right? Like no one's got. We're driving left-hand side of the road. Imagine if you want to change Australia, it'd be a right-hand driving country with everything that, it's not going to happen. We can change it tomorrow. It's actually super easy to do, but we're never going to do it. And I always talk about the internet, you know, the underlying protocols. They could always be changed. I'm very, very trying hard not to mention another thing where this example fits perfectly.

33:54but those some of these points that get raised it's sort of like it's absolutely correct but also at a point irrelevant it's like yep but we did use VHS and that's what everyone did and that's just how it is and to argue that therefore we could you know the other one remember on the ASX there was an orbital engine company yes great technology right okay and there was a bunch I mean it was nothing I mean it offered I don't know a lot about it but I My understanding, the engineers and mechanics will correct me if I'm wrong, but my understanding is there were trade-offs, there always are, but it had a lot of advantages over traditional ice engines, internal combustion engines.

34:34But why didn't it take off? Now, you could do a big analysis on it. I'm sure some people have, and I wouldn't say it was monocausal, but I would say a very big part of it was because it would require a deconstruction of incredible amounts of sunk cost capital. It was like this is why the, back to EVs, this is why the traditional, the Fords, the Toyotas were dragging their heels. Why? It wasn't because they couldn't build an electrician. They're all doing it now because they have to. The reason why they didn't want to do it is like you can imagine the boardroom. Guys, we've just spent$400 billion in 20 years building up our factories and you want to rip that all down?

35:19They're on the balance sheet. There's value there. If I pull them down, I've got no way of wasting the money already, but I've then got to go on to the market. We just lost a gazillion dollars. We're riding all these things to zero and blowing up. Yep, I can't do that. And by the way, it's the same with the fuel network. I mean, think of a desert in the middle of the Middle East and the local BP and draw a line between those two things, you know, and what has to happen and what did happen and how much money, how many decades and how many probably trillions of dollars were spent in building that up.

35:55And people would, again, we all live in the moment and we can't conceive of how things came to be or how they could come to be in the future. And people will go, you know, with the EVs, oh, there's no charging stations around. And it's like, yeah, but, I mean, a first principles thinker would say let's start from scratch. There's no such thing as a car. There's two paths we can go down. Once you take away the sunk cost advantage and some of the path dependent stuff of these technologies, there's actually no contest whatsoever. But there is, as I like to say, there is nothing more powerful than an idea whose time has come.

36:28You mentioned that. And when you cross the chasm and you start getting, and this is where EVs are getting to now where it's like, because now I'm in the club, I've downloaded the app, so like, gosh, I hope there are some chargers around me. Oh, yeah, they're everywhere. They're everywhere. Right, right, right. And so that makes the decision for the next incremental buyer a bit easier. And then you get these positive feedback loops, more buyers, more demand, more scale advantages, cheaper cars, more cars. You've got more charging stations, more charging stations, less barriers to entry. You know, I can build bigger plants.

37:06I can, you know, all of this stuff, it just feeds on itself and a momentum is developed that is almost not impossible but almost impossible to stop once that is underway. And I'll bring it back to an investing insight, for want of a better term. I think too often if you're like me and you like tech and you like money, you look at something and this is, yeah, tech, yep, that's for me, and you look at something and go, this is brilliant, I'm going to invest in that. And we've talked about that a lot in how dangerous that can be because there's not the case that this technology doesn't work or has incredible advantages longer term.

37:50It's just that it's got to overcome all of these. You've got to prime the pump somehow. You've got to get past these initial conditions. And more importantly, you've got to displace an incumbent that has all of the advantages that you're trying to get. Yep. And so it becomes like the orbital engine. A lot of people lost a lot of money on that. Were they idiots? A lot of them would have been very smart engineers who just looked at it from first principle, and this is clearly better, it's going to take over the world, not understanding sort of those broader points. But my point is, the point I'm building up to is that by the time the train has really left the station and the momentum is built up, it feels too late.

38:29It felt too late to be an internet investor in 2005. It felt too late to be catching the SAS train in 2018. You know, it felt too late to be investing in Apple in 2016, you know, eight years after the iPhone came out. And my point is once the technology has gone into that exciting part of the S curve and sort of the path dependence is locked in, the momentum is building, the cost curves are falling rapidly, the prices of these assets associated with it are all to the moon. It just feels like, oh, I've missed the train. I'm trying to make the case, probably not. You always rightly reference Amazon, you know, it's just sort of like when was the best time to buy it or when Jeff Bezos couldn't get arrested.

39:18You know, when was the next best time? Literally any time, like go back 15 years and any time before that, any absolute high of the market was a good time to buy. And I feel as though once a dominant player has emerged, once the momentum is there, once the path dependence makes a disruption from even a slightly better competitor come along. You're not going to win. You're not going to win. It's too hard. It's locked in and you can make money with that view if you're patient enough, I think. Yeah, that's lovely. I want to go back just a little bit to the point I was making before. The second branch of that was one is the path dependence you mentioned.

39:58The other is just the explosions come at weird times. And so think about the EVs. You mentioned the fact they run off their feet at the EV shop, right? and that's kind of, was it likely that happened anyway? Two-month wait times now. Right? Now, if you believed in the likely path of technological improvement, at some point the battery technology was probably going to be cheaper than internal combustion engines anyway. And so the question was probably, and you'll find out, the infrastructure happens, and by the way, you can also include the policy decisions that people were making, governments were making.

40:31Again, I don't care whether you carry a bit of coal around in your back pocket or you're a diehard greenie, either way, you kind of go, okay, the policy decisions just matter, whether they're justified or not they impact behaviour. So things are all kind of true on that. It was probably the direction that we're going to go in. The acceleration, to your point, the S-curve acceleration, sometimes it's just the natural way of these things. Other times there is a genuine impetus. Right, exactly. They're kind of just, and not only the catalyst for the uptake, but the catalyst for the expansion, as you say, that kind of the boom.

41:00And so it is probably the fact that petrol prices skyrocketed and it might only be for two or three months. But think about the changes that makes to everything from, okay, now people are increasing the investment in the charges because there's more cars to charge. Okay, now there's more everyone's getting one, social proof. You mentioned before about you're seeing every social car you see. Social proof is huge. I've seen BYD sharks everywhere in my place. And it was Tesla. You see Tesla every year. Now the shark is everywhere. And so, again, I mean, Barrel and New South Wales, It's kind of regional-ish, but maybe there's more Utes here than city cars, so maybe it's a different experience where you're listening to us now.

41:38But, yeah, and so that kind of would have happened anyway, probably, I think it seems to have been the direction of the arrow. But and could you have predicted literally a week before Trump bombed Iran this was going to be when it was going to happen? No, because otherwise people would have already done it, right? You didn't need to, though, either. Well, yeah, but I think in terms of I guess my point, though, mate, was from an investing perspective. I've used the example a million times. Tesla shares went nowhere, literally nowhere for five years and then 10 bagged in some stupid amount of time pretty soon after that.

42:07And so kind of directionally, you didn't need to know when, but it was worth saying if you have a conviction about the destination, you can't, literally can't pick the timing. It's back to timing. That was kind of the point of, you know, did it matter? Not really unless you were someone who was waiting for it, in which case by the time it happened it was too late. And so that's kind of the point, right? So if we're going to go from A to B, yes, you'd like to be faster. Yes, of course, you'd want to be overnight. Yes, of course, all those things. And you can still be wrong because maybe we don't get to B for all the reasons we just talked about with VHS and Beta and all that other stuff.

42:37But broadly, if you have a thesis, trying to imagine you can guess or graph the uptake of this stuff. You can't, but that's why I like the term nowcasting instead of forecasting. Right, right. If I know something will happen, you know, and it's just like, And, you know, I know. If I have very high conviction, something will happen. Yep, yep. You know, at a point in time, I can't ever predict the exact timing of it, but I can see what's going on now. Yes. And I can see what happened yesterday and the day before that. And if you observe an accelerating adoption rate or anything like that, it is, again, you've got to be careful with extrapolation, but that is a very different proposition to, oh, in 2028 is going to be the year that everything takes off.

43:24It's like, who cares? Who cares if I only bought Tesla five years ago, you know, five years before it took off. Who cares? That's how all great investments go. Nothing and then everything at once. It's like we go, oh, the market compounds at 10 % a year. No, it doesn't. No, it doesn't. It goes down 30%. Then it goes up 3%. Then it goes up 80%. And then it's like, who knows which one of those events is going to be. But I know, quote unquote, I know that probably the markets are going to keep compounding it. So do I try and wait for that best entry point? You can, but it's a Mug's game. or just get on the bloody train because the destination is set, you know.

43:59Correct. Sorry, mate. No, no, that's exactly the point. The other thing I would say is when you're on the train, don't lose heart while you're on the train. Don't get off. Right, exactly. I mean, of course, if you realise the train's going the wrong direction, get the hell off. Oh, yes. I'm going from here to there. I thought it was going to be quicker than this. I thought this was a fast train. I'll get off and get a faster train from somewhere else, all that kind of stuff, right? Yeah, yeah. Waiting is so hard. Right, right. When you see something clearly, it's going to kill you, man. That's a challenge.

44:27So, you know, remembering that that's the story for me thus far. The other thing I will say too, mate, is we talk about this kind of nothing that everything. That I think is also true of technology. And I've made the point before, and I'm no technologist, I'm certainly no futurist, if you think about household batteries, for example, and just the impact on the grid, you know, we will look back at some point and go, oh, it was at that point that everything changed. And maybe it's 25 years away. Maybe it's 25 days away. It's probably somewhere in between. You think about, I've done the numbers on a home battery a dozen times and I can't make it work for reasons, but if it's a whole generation of battery take away, I'd be shocked.

45:05It's probably half a generation or, you know, and it's just, you mentioned scale before and we've talked about uptake, we've talked about networks, we've talked about social proof. Those things all at some point will generate enough scale. So I got a Powerwall one where we first moved to this house 10 years ago this year. In fact, only a couple of months away from 10 years ago. and I did it for environmental reasons. I mean, yeah, we're going to save a little bit of money on electricity, but we're never going to get our money back. That was just the rationalisation. Totally was. To make yourself feel better about it.

45:31Totally was. That's all it was. I could have got panels on the roof. I thought, while we're there, we'll get a battery. That'll be good. The other, oh, I mean, quick investing tangent, mate. I don't invest in a life tangent. Be careful with framing in general, but framing in particular. So I've spoken to so many people over the last few years who've said to me, if I get a battery and solar, I'm going to save this much money. It's like, yeah, you will. So I'm getting a battery and solar. Before you do, is the battery making your money or is it the battery plus solar? And it's kind of when you break it down, all the savings are coming from the solar and the battery is still costing money.

46:05But when you bundle it, and if you're a solar and solar, why wouldn't you? You can buy 10 grand of solar panels and save a fortune. You can buy 20 grand worth of solar panels and batteries and save a little bit less than a fortune, which means the battery itself actually costs you money. Now, you can do it for environmental reasons. I did. But when you bundle something like this, it's all in the frame. They present it that way. Look how much money I'm saving you with this whole entire suite of solutions. What are they trying to do? They're trying to send you a battery. So that's just a little behavioural hack.

46:33Just keep that in mind. But, mate, we are – I am almost at a point where I can justify a battery financially, almost. At some point that crosses – right? And when it does, here's the thing. It's not just going to happen. They're not even a Nostradamus-level prediction either. That's just like, again, extrapolation of cost curves. I mean, there's some point at which the chemistry can't improve and whatever, whatever, and that's probably years away. But, yeah, I mean, when we've been to the hammer, we've stopped improving it after the first year. It doesn't have to be lithium-based either. In fact, a lot of the new ones aren't.

47:02Correct, correct. So it depends on what the chemistry is and what the prices are and all that. Anyway, my point is when that happens, though, that's a massive tip of the point, not just for me. It doesn't make me slightly negative ROI to a slightly positive ROI. That changes the story for everybody. I mean, not literally, but almost literally everybody. And so you go from, to your point, early adopters, I'm doing it because it's cool, I'm doing it because it's fun, because it's Tesla, because I love Elon, because I want that virtue signal, because I want to save the planet, because I want to. So now your question, which is just I'm getting a car, I'm getting an EV because I'm mad not to, the same will happen to the grid.

47:34Well, again, maybe it doesn't because, again, chemistry is chemistry and physics is physics and there are limits, but I think it's a pretty good chance that at some point we tick over that line. Once you do. Any limit there. Right? And once you do, then it's kind of like, well, now we're away to the races. And that happens. So, again, your point, you know, slowly then suddenly, that's exactly what's I think most likely to happen in some of these things where it goes from a nice idea, interesting, maybe I can justify it, maybe I'll put a couple extra bucks into, who wouldn't have a battery now?

48:03Why would you go the grid if you can go the battery? Because the battery is going to save you a fortune every day of the week. You're mad not to. It's ideology at a point. It's just like I just refuse to, so I'm going to. It was like, okay, you're on the M4 with a horse, you know, and like, okay, you have all the things to sort of like, you know, all the hills to die on. But I'll go back to the original point. One of the original points I was making. There's no original point. Here is electricity. Yeah, yeah. We've known about that since any, you could rub a cloth on an amber rod, right? Like the ancient Egyptians had a conception of it.

48:38Right. But even since the Industrial Revolution, we are now, 2026, talking about the evolution of the grid. Yeah. Like the power grid. Yeah. It's been around for forever, right? And it's like, and that's why I say the internet is such a baby because it's like, here we are with something that's far more basic, far more basic, and we are still iterating, enhancing, you know, and I agree with you. I think the grid will look very, very different in the future and not look different for the sake of dairy. It'd be far more efficient, far more robust, far more practical, far more utility value, all of those kinds of things, at least if we don't screw it up and distort the hell out of it along the way.

49:18Well, that's it, right? And it won't be a straight line to the point made over and over again. We're already in the grid. This won't be an iteration. So kind of like no one, who talks about your point very early on was like, hey, I just had electricity put on. Who has that? You don't because why do you, right? So we've iterated it slightly and I'm sure it's become more efficient and I'm sure we've got better at doing it and all those. You have modest little iterations like the car, right? Ice car gets invented. The fuel efficiency improved out of sight over 70 years, but the engine functionally didn't change much.

49:49And the efficiency really asymptote too, really flatlined after. It's like the latest Toyota isn't that much more efficient than the one last year. I mean, noticeably and worthwhile, and it's a positive piece of progress, but it doesn't change the game, it's just, hey. And then all of a sudden it's like, bang, whole new thing. And so, you know, transport has not changed much. The car is not from the outside changed much, and yet it's entirely changed. And so the grid, you talk about the grid, we've iterated slowly, we've improved it slightly for 100 plus years, and at some point we're like, bang, what does a grid look like when every person who can put panels on their roof or even just buy energy in off-peak times and spread the load?

50:27What does it mean when there's grid level back? I mean, this is, revolution's probably too strong, but I think evolution is not strong enough. There is something meaningful. There's a break in the trend. And I think that's kind of worth pointing out. I think it's worth calling out because that does change things really, really meaningfully in the context of the way innovation progresses. And I don't think as investors we need to know the answer to that stuff, but it's worth remembering that even some of the most storied companies, the Kodak, and again, it's a horrible example, except that Kodak was stupidly dominant for decades and decades and decades and decades, and then it was all over because photography went from, again, how do you feel about developing a photo in 1980 compared to 1880?

51:08Not much. I mean, yeah, industrialised, sure, and colour, sure. I mean, those are big things, right, particularly at that point when you've got colour, it's like, man, this changes, feels like it changes everything. Kids look up Aunty Jack on the ABC when colour came to television. You've seen that video, haven't you? Yeah, yeah, yeah, it's funny. But that's, you know, so nothing changes and everything changes. I think that's also worth kind of keeping in mind, and whether it's just an amplification of what's already happening, which is kind of what it is in the short term. I want to just kind of go back to that point, mate.

51:37You talked about the changes that are kind of happening. We kind of day by day they don't feel big and there's a real human challenge between being able to foresee a change and understand compounding in advance but in the event, even given this rapid change, we've taken it all in our stride. I mean, I think about the technologies you and I have adopted. since we were kids, right, three channels on the television, you've got to press the button. Then you've got a single game console with the Atari, you push the cartridge and you have to blow on the cartridge, you get the dust off to make the connections work.

52:11And then so even in our lifetimes, our relatively modest lifetimes like we are getting old, how much has changed? And we've absorbed it all. And if you tried to, if one of our parents were in a coma when we were born and then revived today, their heads would, I don't know how someone who doesn't know the world could even start to absorb that 50-odd year change. I've always thought I'd love to get in a time machine and give a caveman a Malteser, you know, just something really ordinary, like what the hell is this? I mean the size, I mean the offal from an old mammoth. What the hell is this thing?

52:55That is the most random and wonderful example I've ever heard of that story, My multisans or caveman is fantastic. But I think that's why I want people to keep that in mind is it's a way to conceptualise the future that we can't conceptualise in that sense. You can't think in compound exponential. It's really bloody hard. And so the best way to do it is to think back in our own lives and go start listing those things that have changed over that period of time and ask yourself 10, 15, 20, 25 years ago, could you have been able to conceptualise that stuff? Now, I'm not saying it will happen in the same way or the same size, the same speed or the same areas of endeavour, but if and when things like that happen, our lives are the best way we've got, particularly for us.

53:38Our grandparents couldn't have done that because they had no way of, I mean, I really feel sorry for particularly some old people. I'm funny, old people are super tech savvy and absolutely up with the rest of the world. But if you haven't kept up, to your point about you started probably not wearing shoes to school and now you're trying to deal with AI. I mean, that's, you know, like seriously, if you haven't kept up, how the hell do you try and re-engage with it? The Walt Disney are the cavemen. Our grandparents aren't cavemen, but that's a huge thing. We at least had the ability to kind of learn through it.

54:06The digital natives these days are on top of us. They're going to smash us anyway, mate. Oh, absolutely. But that change, think about the future in a compound way. I really do think the best way is to try and take some lessons from your own life and go how much has changed in a really short period of time. Now imagine what the shape of that line looks like moving forward. If you just roll it into whatever area, it's probably AI and it's probably the internet, but it's probably also energy and it might well be transport and, and, and, right? And it's just an incredible, incredible reminder, I think, our own lives of the sorts of change.

54:36It didn't feel notable at the time. Yeah. But taken as a whole, it is just revolutionary. You go. Excellent point. So, yeah, the practical so what? How do I do all of this? There's a couple of things. Part of the reason for the general J-curving of everything is how one area of technology impacts another. So, I mean, EVs couldn't have happened without improvements in battery technology. Some of the features on the car couldn't have happened without software improvements and a lot of the AI stuff that's in the car as well. It actually couldn't have happened without some more advanced material science and just in terms of how tyres and stuff.

55:15It's like there's so many disparate things you wouldn't think work and it's just like, oh, it's actually, I've talked about it before of the humanoid robots, like a lot of the actuators and stuff actually aren't that, I mean, they're much better than they were, but, you know, the game changer was the software. That was the game changer, right? And that is, and let's say that he's become more of a thing. It's sort of like that's kind of cool in and of itself, but if that's as far as your imagination goes, you're missing the bigger picture. Yeah. Because what does a workforce that never sleeps or strikes or whatever, like, oh, you know, oh, it means that, oh, and then like there's all these other things.

55:52But I think from an investing standpoint, it's sort of like, I come back to the other point I'd make before is don't try and be too navel-gazy with trying to predict flying cars and teleportation or like, you know, sci-fi really weird stuff. Even if there's some things happening in labs around the world that are really compelling. Yeah. The fast follower framework for me is the way to go. You do not have to be first in Apple. You don't have to be first in Amazon or anything. You just have to now cast, not forecast. It wasn't a great exercise in foresight in 2005 to go, oh, shit, yeah, the internet's a thing.

56:34Yep, it's definitely a thing. Yep, there were some valid concerns. Maybe it wasn't going to be much more than the fax machine, as Krugman said, you know. But it's like you can absolutely have a very rational standpoint in 1993 about the internet, which is laughable in 2003. Yeah, yeah. And in 2003, it's not that you had to understand what was going to follow after it, other than that this is here, this is baked in, this is only going to get better, right? And, again, it would have felt late. It would have felt late. A lot of these stocks would have, yes, crashed after the tech crash, but still, you know, well up from the bottom.

57:15So you don't have to look around corners. What you have to do is understand the nature of compounding, of past dependence, of things being locked in because of their independence to other things. And there's a few examples around of that kind of stuff. Network effects are a great addition too. Network, I mean, dude, you're making me laugh so hard not to mention something. But, yeah, all of those things, right? All of those. The argument you were using then was exactly the one you used for Bitcoin. Let me say the word because I might as well. There you go. There you go. There's a reason. There's a reason I'm excited.

57:49I'm very good. Yeah, yeah, yeah. But the other point is, and this is particularly who the Bitcoiners out there, is that you or the EV enthusiasts or the whatever, whatever the AI enthusiast is, is that you framed it really well because when we look now, 2026, we look back and we talk about the iPhone and it was like, it wasn't that long ago. Well, imagine being in 2007, you know, and saying 20 years time. Now, when you say today, there's going to be a thing, let's go with EVs, right, or just electrification. It's going to be, is it going to be bigger in the future? Yes. Are we at a point where this isn't a slam dunk but look far, far, far more likely than it ever has at any other point?

58:38You know, yes, it does. Is that the foundations of a very firm investment thesis? Yes, it is. Now, the problem that you'll get, though, I think a lot of people can get there. And then, as I said before, it's the patience that gets you. Because once you see it, you go, oh, this is inevitable. I mean, I remember having arguments with various relatives about self-driving 10 years ago. It'll never happen. It'll never happen. You know, it's like, yeah, well, it's happening. It's actually now. Yeah, but no one's going to use it. And it's just like I was right. That's the point of the story. Full stop, I was right.

59:16I was right. But what I didn't appreciate and what has taken a long time to learn is that you can be right and early. And it's still fine. It's still fine. But once you form a thesis on this, understand that the next 10 years is – When you imagine waiting 10 years, it's like that's forever. You might as well ask me to wait infinity. When you look back at the last 10 years, particularly the older you get, oh, it's a blink of the eye. That was a literal blink of the eye. It's 10 years is 10 years is 10 years. It's a unit of time that actually forwards or backwards, it doesn't make any difference.

59:53But so many investors shoot themselves in the foot because they just can't imagine that they will be around in 10 years' time. I guess they know that they're going to be. It was like, I can't wait that long. And the other trouble with it is, is like you pick any of the technologies that we've talked about that have changed the world and have made literal billionaires and the richest people on the planet, you know, it wasn't a straight line. They all had massive, they had the smartest journalists in the world calling them has-beens and lost it. We had people all through Wall Street and the investing class pointing at share price charts saying, ha, ha, ha, you don't know what you're doing, the share prices collapse.

1:00:33And it's just like, no. And who made money? And I'm saying made money, like real money. Was the person, yeah, okay, they saw it. And, yeah, they recognised at a point where it was sort of, there was like it was carrying forward under its own steam. And that, well done to you. But the real credit goes to the person who just sat through it all. Totally. All the FUD, all the volatility and just said it's going to happen. And that's not a pig-headed stubbornness with investing. No, no, no. I mean, there's someone out there today going, no, Laserdiscs are coming back. I'm staying with it. That's right.

1:01:10My Segway shares are still going to go to the moon. You know, there is a point where absolutely the thesis busts. Yeah. But you've got to look, I think, as an investor, underneath the share price, underneath the fads and the hype and the desperation and the FUD. And it's like what are the – the word fundamentals gets thrown around in our industry all of the time. Yeah. And it tends to mean things like numbers in a financial statement, but I think there's more fundamental fundamentals than that, you know, and it's just like, yeah, I mean, like, we'll stick with the EV kind of thing. It's like my thesis is that these will become cheaper and better and more people will adopt them and the more people that adopt them, the people that provide these goods will prosper.

1:01:57You know, not all of them, but some of them, and some of them much better than others, but it's going to be a very, very up and down kind of line. So what do I need to do here to see if I'm right? Like I've got to check the pulse on a pretty regular basis. Well, I log on to my ComSec account and I see the shares are down 10%. I was like, does that invalidate the thesis? No, I'm not looking at that. What I want to look at is, okay, what have BYD sales and Tesla sales and XYZ sales been in Australia? Oh, oh, they're growing. Okay, that's interesting. You know, list a bunch of data points that you can reference that's outside of all of this that will help you cut through the noise.

1:02:35And if you are seeing the thesis play out in terms of the fundamentals, and it'll never play out exactly as you see, but like directionally you're going in the right direction and the market's not awake to it yet or the market's moved on to the next shiny thing, it's just like hold true. Hold true to your, in fact, buy more if you're able to because you've now got a point where it's like things are even cheaper and you've got more validation that the thesis is accurate. It's like there are some things out there that the risk-reward proposition just gets better and better the higher the price gets.

1:03:11And, you know, again, I'm trying hard not to mention something. But I guess that would be my view of it. I think the wrong take that people have here is that you've got to be very early to a new technology and that once you see it, tomorrow the rest of the world will wake up and realise you for the visionary that you always knew that you were and that you're going to be rich in three years' time. It's like, no, it's going to take a long time, it's going to be a lot of doubt and you're going to be wrong a lot of the time, but this is the game you play. That works, yeah. And if you do it right, and it's simple but not easy to use Buffett's term, but if you do all of that, you are in serious danger of being insanely wealthy in 10 to 20 years' time.

1:03:53And it's like, oh, but I don't want to wait 10 to 20 years' time. And that's why you won't be wealthy. Correct. I don't know what to tell you. You won't be incredibly lucky or just be patient, right? And one, I can do what I can do, improve my luck. But I can very much focus on that patience element and patience is going to see you very well if you're going to invest in this way. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

1:04:53Can I go from patience, mate? I say, here's the Vanguard index chart. Over 30 years, 10 grand becomes 140 or whatever the numbers in the given year. All you've got to do is put 10 grand in and just do nothing, and you'll have 140 grand. That's the beauty. This is the hack. This is the secret. This is the trick, right? Shout out to the OnePage Investing Plan out soon in a book sale near you. And it was not just the Vanguard index chart. All good book source. By the way, if you want the audio book done, I mean, and you need a nasally annoying voice with lots of ums and ahs and stammers, I'm available.

1:05:24Just saying. I've got that covered. Don't worry about that. Okay. Okay. So you do the Vanguard chart. This is what you've got to do. Or you invest. Wait, that's it, right? Sounds too easy. Well, I think people say, but who'd do that? Like, that's the point. That's what I'm trying to tell you here. Actually, not many people. Right. But the point is, like, this is all you. So you're right, no one else does. So do it. The criticism of the idea of, like, no one would do that. what you're saying is you can't imagine being patient enough to do that. That's okay. Yeah. But I'm giving you the secret. I'm handing you six figures.

1:06:01And it's not even that big a secret. It's like it's right there. It's not. It's not like under a blanket. It's just sitting there in the front yard. There it is. It's borne out through history. It's not even like I predict. It's like, no, I'll tell you what happened in the last 30 years and saying the future market is the same. He cracked the Da Vinci code. Yes. I think if you try this, maybe possibly it'll work. Trust me, bro. I was like, no, no, here's one I prepared 30 years earlier. This is literally the story. That's the first thing. Second thing, you mentioned people and kind of you mentioned the Segway.

1:06:32And I think it's fast because the reason we're getting into this one is you talked about if you see something that you think is going to be great. What's really important, and you didn't mean this either way necessarily, but just to take that point and really hammer it home, not something I want or I love or I think is brilliant. There are some diehard Segway fans who are still driving their Segway around and can't realise how the hell the rest of us can't see how brilliant they are, right? Yeah. And that's great. I mean, they are brilliant. I've been on. Yeah, totally. It's me too. They're heaps of fun, yeah.

1:06:56Right? But no one buys them because they're kind of just not that practical. And so for all, and what happened, right? We went electrification, self-proposal Segway, and the rest of the world ended up going, no, e-bike. Yeah, it's surprising. Right? And it's not either or. I didn't necessarily see either of them. If we're all driving Segways right now, would I have been completely shocked? No. So, you know, Segway lanes in the city. It's very easy to laugh at the Segway, but there is a parallel universe. It's like, yeah, they're really cheap. They're great. I can go up to the shops in them. Yeah, yeah, yeah.

1:07:26Now, I don't really know. I haven't thought about this because you just raced it, but it's an interesting thought experiment. And this is really important, mate, not to find the actual answer, but to think through the range of possible outcomes to inform your probabilistic thinking. Yeah. So I'm not saying how would you have picked it wasn't Segway, but it was an e-bike. It doesn't matter. I mean, it does if you learn something from it, but the lesson isn't how could I have possibly reverse engineered my thinking so I would have come up with e-bike rather than Segway. I mean, yes, the process is useful, but it's the process that's useful because in a dozen other parallel universes where driving Segways and e-bikes never get invented or are written by a few people, we go, oh, isn't that quaint?

1:08:06They're like the old bikes we used to use. They've got an electric engine on them. Isn't that cute? And the rest of us are going past on Segways, right? So the message wasn't, the lesson isn't, be able to predict exactly what's going to happen. And you made the point about the fast follower thing. Maybe Segway's going to be huge. Yeah, maybe. I'll keep an eye on it. If it starts to become huge, I'll jump in. You miss your early gains. I might. So that's one thing. The other bit of that is just the human nature. And I think I don't know this, mate. I'd love to hear your thoughts. You mentioned path dependency.

1:08:33I think path dependency is to some degree psychological as much as anything. And so are Segway's better than e-bikes? The Segway fans say absolutely. I don't really have a strong view, but my view is, the view I do have is, no, they're not better. But here's what I know about myself. That view isn't rational, right? That view is my emotional response to, I know how to ride a bike, and I'm used to riding bikes, and bikes feel, and we'll get to self-driving in a sec, because that's the last point I want to jump in. It feels like it's more comfortable, because I'm used to riding a bike, and so I've either learned to ride a Segway, or I can strap an electric motor to the frame of my bike.

1:09:09Well, I don't want to make a massive jump. It's simple, it's easy, it's safe, I feel good on it. Maybe it is simply just a better form factor anyway. I don't know, rationally. But it's almost a second-order question, right? It's like, what do people gravitate to? The point is it's right for you. Right. Exactly, exactly. And even if what's right for you is the thing that's not right for anyone else, if that's what's carrying you forward in this investment, that's why I say you've got to look at the fundamentals. But there's a point in time, segues, they look great, they're the future, I'm all in.

1:09:39Bill Gates is riding one around. Yep, yep, yep. Brilliant. Okay. Well, what are the fundamentals? Well, more than anything, the rate of adoption. And there comes a point where it's just like, well, there's no J curve here. There's not even an upward sloping curve. That's right. At that point, it's like it's broken regardless if it's right for you and you're right to think that it's right for you because only you can make that judgment, which is really what you're saying here, which is just to there are things that just make no sense to some people. and it's like, I would never get that. It's like, the EVs are classic, right?

1:10:13I would never get an EV. It's like, yeah, because of this being because of that. It's like, what's the point in arguing? And it's wrong of me to argue because it's clearly not right for you. You don't want it. And I might think it makes a huge amount of sense, but that's me. But the point is for that other person is like to not invest in that potentially because you don't like it is wrong. You make the point before with VB. It's like, oh, VB is cat weed, you know. No, no, drink is like, yeah, but a lot of people do. Everyone else does. So do you want to make money or do you just want to only invest in things that you happen to like and think everyone should think like you?

1:10:46Sorry. And conversely, by the way, the people who love their craft beers, their craft breweries go and bust all over the drink. But their beer is better. There's no business model there. It's not enough for that to be true. Last point for me, Matt, quickly. You mentioned self-driving. And I posted about self-driving. There's a great chart. It's on my Twitter feed. It's too far back to look for now while we're halfway through the conversation. I should have done it before. But basically it's just the number of miles. Waymo, is Waymo Google's company? I think it might be. Yes, I think so. I'm just guessing if it is.

1:11:12The number of miles they've clocked up for self-driving is just going through the roof, right? I still have debates about it. I was like, no, it's happening now. I would like to see where. So I tweeted this, right? I tweeted this exact graph, which is to the point we're getting to. My point is this is going to be huge, but, and this is back to human nature, but also it's in some cases is the struggle between and the eventual overwhelming of, I presume, but we'll find out, human nature versus the ability of technology to do what we want it to do and how comfortable we are with unleashing that technology.

1:11:46Because a lot of responses I got were combinations of, well, some of us just like to drive. Cool. That's cool. Others were, I've never let a robot take over my car because it's programmed to drive me into a wall. It doesn't care about my life. So, okay. And I don't. Obviously not read any Asimov, that's all I'll say. Well, I mocked that a little bit. Oh, actually, I'm going to stop only because you mentioned Asimov. The future is already here. It's not evenly distributed. It comes from William Gibson who wrote New Romancer. Oh, okay. There you go. So there you go. Because I looked it up ages ago when you were talking about it and so I had it on my screen and you mentioned Asimov.

1:12:20I went, okay. So yeah, William Gibson wrote New Romancer. That's his quote. All right. Back to the point about soft driving. What I think is fascinating about is a couple of things. Firstly, I don't – I think you have more confidence in the inevitability of things than I do and maybe just a higher conviction or maybe I'm just more sceptical or I don't know what it is. There's a world in which we don't have full self-driving for decades and decades and decades, right, because we just simply – humans aren't prepared to say I will accept it despite the overwhelming evidence and everything else that we will know by them, which is – and it probably – someone tweeted me, Apparently the Tesla accident rate is less than the average accident rate we're using for self-driving.

1:13:03In other words, Teslas are currently better than humans already at self-driving, avoiding collisions and deaths and accidents, right? And so on that basis, everyone should have a Tesla, I'm never driving again. I'm always going to let the machine do it. But we can't because we're like, well, what if the autopilot and planes, right? What if the Tesla crashes? I want to be able to take over. It's like, you're not listening to me. You're more likely to die if you have your hands on the wheel than if you let the machine do its same thing. Mathematically, you're more like, yeah, but I'm not comfortable with that.

1:13:30And I think that's the fascinating thing in terms of human nature, right? We don't, and thank God we don't live in a purely technocratic world where the computers get to decide everything and everything's hyper-rational and there's no room for emotion and love and all the wonderful and terrible things. You know, we're not purely rational actors. And so to the point of if it's true, the tweet told me it was, it may not be, that Tesla's already safer. Our lawmakers should be doing whatever they can to reduce the road toll by getting us to incentivise us, whatever it is, maybe the self-driving lanes, maybe the transit lane.

1:14:04You're driving the transit lane if your car is driving itself. You'd want that to be true, right? We're not ready for that. There's no lawmaker in Australia, probably not in the world, who would try and somehow push more self-driving because when the eventual crash happens, there's the I told you so's. Now, I knew this was never going to work and back in your box, chocolate and maybe self-driving goes ahead and then goes backwards for five years because we just kind of go that accident happened so we can't do that thing anymore and it's just it's a fascinating study in human psychology and i that i mean that's interesting in itself but again it kind of goes back to your s curve goes back to your j curve there's all that stuff which is there's a rational path and then there is a very human path and some of that is i will take the new idea and run with it others i i was one of the idiots who when the apple iphone came out i got the choice when I worked at Blackboard.

1:14:54Do you want an iPhone or do you want a BlackBerry? It's like, I want a BlackBerry. I want a physical keyboard. I'm not an idiot. Of course I want a physical keyboard. Yeah, yeah. And I was just dumb, right? It was just absolutely dumb. So I didn't get the first iPhone. It was iPhone 1 or 2, whatever it was at the time. I wanted the BlackBerry because I could send emails on it and it was, you know, and it was at the time felt to me because I was an idiot like it was much better than the iPhone. Well, you and the Microsoft, you and what was it, Steve Barmer? Steve Barmer, yeah, yeah. Barmer, yeah.

1:15:23Same thing. I mean, you weren't Robinson Crusoe on that one. No, we were both very wrong. Anyway, it's more the point of human nature. It's not to disagree with the point we were just making before, but it's the other side of that coin of if you can see a likely eventuality, just remember it's a human world and that can accelerate like with the Iran staff or the QR codes or it can retard like in the I'm not prepared to accept. Let's not get too political, but, hey, it's long late in the podcast. The anti-vax stuff, right? That very kind of, there's both those forces happening always and ever at the same time, and the rate of progress is going to be defined by all of those uncertainties.

1:16:01But the human ability to get comfortable with whatever the thing is, particularly if it's a new thing, I think we can't touch and feel ununderstand, and I do wonder about AI and I worry about, you know, the potential political and social upheaval of meaningful, you know. We're still dealing with effectively 50, 60 years of globalisation. I mean, the rise of Trump et al is largely a very delayed response to, hang on, those people over there are taking all our jobs, which is true in absolute direct one-for-one making vehicles, back to your EV where we started. Someone in China is making the EV and someone in Detroit is not making the Ford.

1:16:37That's very real. But the human kind of reality, understanding of, therefore, are tariffs good or bad, Trump has made a political career out of the simple but wrong answers. And so there is just something in that and I don't know what we do as investors other than just be mindful of that. Don't let any of those thoughts carry you too far away too quickly. Allow for the ambiguity, allow for the complexity, allow for the moving parts in different directions as you try and think it through. Yeah, don't oversimplify, I guess, is my thought. Well, yeah, what you're saying is a version of what we've said often when it just comes to investing.

1:17:11Us. We repeat about ourselves apparently. Allegedly. We repeat ourselves, apparently. Apparently. Apparently. We repeat ourselves, Andrew. Yeah, apparently we repeat ourselves. Apparently. What you're saying is it's important to have an investment thesis, which is sort of the cool modern way of sort of saying it. But what you're really just like, you're going to have all kinds of hot takes that are just not that hot in the end, right? Yeah. Which is fine. There's nothing wrong with that. It's really easy to, again, so many things in hindsight look silly, but I think where the mistake people go with, it's not that they have a certain version of the future.

1:17:48It might look obviously stupid in hindsight, but at the time less so. Where the stupidity enters into it really is when you start ignoring reality in an effort to preserve what you want it to be true. I want self-driving to be a thing. Yes, that's nice. Because of this and it makes sense. And let's have big long arguments about it and rah, rah, rah, rah. And it's like, yeah, well, all that really matters is if you can objectively find some data that demonstrates that actually there is take-up on it. Because at that point, it's sort of like it's moot. Like you, I come back to this idea of now casting.

1:18:27It's just like I can't know the future, but I can see what's happening right now. And I can compare that to what yesterday was like and the day before that was like. So if my thesis is that self-driving, just to go with your example, is going to become a thing and three years later that has not nudged up, it's easy, you're an idiot, you're wrong. It's like, no, really, really sensible thing to think of. Same with the Segway, but it turns out it's not going that way. So the only rational choice is to go, I was wrong and I'm going to go into something else here. It's why it's so critical to do all that kind of stuff.

1:19:04And remember that share prices and markets and financial pundits are going to steer you wrong almost always within that because they will just be in the here and now after clicks after attention and the person who kind of goes yeah I know everything's down 80 % but look underneath the hood everything is just rapidly rapidly evolving in the right direction that's what gives you conviction to hold through the uncertainty is that when you rather than just vibes and I feel and I think and this it should be and I hope it's just like well, the thesis was that, you know, we will be doing this and we just are.

1:19:39Here's all the data that shows that we are doing this. So you can laugh at me all you want that the price is down, but until I see the reversal in that more fundamental trend, then my thesis holds true. I'm going to stick at it. So it's so vitally important to dare to dream, if I can be a little bit more poetic about it, dare to dream. Yeah, yeah. But be realistic enough to understand when your dream is not ever going to be realised and you'll strike out all of the time. But every now and again you'll see something and you'll be able to sort of track it and you'll be able to see its continued evolution.

1:20:16I mean, that was SaaS. That was SaaS back in the day when we were working together. You know, it seems hard to think of now. But, you know, it's like why wouldn't I have a server somewhere that does all of this? I'm not maintaining the hardware. Where is, well, I've got to send out a box with a CD-ROM and I've got to maintain all these different versions. It makes no sense. It makes no sense. And there was a very, very reasonable thesis to think, hey, people are going to do more of this. It's actually not even going to be a, it's just going to be the way that we do it. So let's see what corporates are doing.

1:20:46Oh, every year that goes past, more and more people are adopted. It's like, I'm right. I'm right. No, I don't care what the share price is. You know what I mean? So there's all of that. The other thing that you touched on very broadly was this idea of social proof, which is a big one for me as well, and this concept of the Overton window because things just change. It was some guy called Overton, as I understand it. He just basically sort of said that these political windows or what's socially considered normal or reasonable or acceptable shifts very radically. There was a time when it was perfectly a normal, respectable thing to have some slaves.

1:21:21Like, don't you? Do you wash your own car? It doesn't make any sense. Of course I've got slaves. And it was like, and then that all of a sudden, the Overton window shifted. It was more of a fringe view that, no, that's not right. I've really gone to a dark place here. I'm sorry. You tend to late in the podcast. People come for the insights early, stay for the dark references later. Well, people don't realise. I mean, that wasn't long ago. That was not long ago, actually, right now, you know. But my point is that there is a social shift and that's important because, like it or lump it, politics plays a role in all of this kind of stuff.

1:21:58I mean, it wasn't that long ago when we had a Prime Minister out there talking about, you know, EVs in a very derogatory kind of way. Ruined the weekend. Now, A, because he just happened to be an idiot and a moron in, you know, every sense of the word. I say that entirely apolitically and not affiliated with any party, honestly, I do. But it was clearly done. But at the time, he wasn't going out on a limb politically because a lot of people thought that. Yep. No politician, well, maybe some, most politicians aren't going to say that. Yeah. Shout out to Matt Canavan, is going to say that anymore with a straight face.

1:22:35Yeah. Because the Overton window has shifted because the zeitgeist has now moved to a point where it's like, you know, it's not really a radical statement to sort of talk about these kinds of things. And that's also an interesting thing from an investment standpoint. When you see that shift taking place, I think it's a very reaffirming observation that the thing that was ignored and then laughed at and then challenged and now it's just a thing is just sort of like, oh, you're on to something. You're on to something when you tip that point. I remember having discussions with my parents about Facebook.

1:23:11Why would you? Why would anyone do this? I don't get it. Guess he uses Facebook more than anyone in my family. mom and dad, right? Like, you know, and it's just, and it's, there's a million things that I had discussions with that I completely turned out to be wrong. Of course, right? But my point is, is that it, that is a data point that you can not hang your hat on, but can help strengthen your conviction when you sort of say, I think this thing is going to happen. And I no longer need to have a discussion about this or a debate about this, which is a non-controversial take to sort of say a certain thing, you know that you, not know, but you can be very confident that you're on a trend that has some real legs to it.

1:23:57I would, you know, it's like talking about electricity now. It's going to be very hard to try and sell someone a gas turbine to put in their backyard to power all of that. You know, it's going to be hard to do. But maybe there's a future out there. Someone invents a very, very, very modular, a very tiny nuclear reactor, size of a suitcase, put that in the garage and you'll never run out of power. And it's like, can you imagine, can you imagine, let's say, take the example to the nth degree. Let's say I invented that. Let's say I put a kilo of plutonium or whatever it is in that, right? And then for the next 50 years, I've got as much power as I need for my house.

1:24:34I can guarantee you that the division politically and socially, we would be having very rigorous debates on social media and everywhere. It's like, oh, oh, I'm going to put a nuclear, you know, a reactive device in my game with my children and where I eat. It's nonsense. And it's just like, but assuming the technology is advertised, there comes a point where it's like, Scott, you don't have a suitcase reactor? And you're like, no, I was born on the grid and I will die on the grid. And once that Overton window is shifted, it's just like, of course you do. Why? It's just better and cheaper. And it actually turns out that a lot of the safety issues weren't a thing.

1:25:17You know, and it's sort of like so many of the debates are just laughable or irrelevant at that kind of point. So I'm not just going to sort of say something has to be perfect, but just that level of social acceptance, it's one of the many tells or one of the many signals to look out for when you start seeing things talked about in a slightly less derogatory, slightly more, it's a bit more embraced. It's another nudge towards, yep, the fundamentals and the trend is strengthening as opposed to disproving the thesis. And I think that's your point about fast following, which I can take it back to the point you made, which is, you know, that was my point before of just the range of outcomes is not as obvious as you might otherwise assume in theory.

1:26:03but once the practice, once the reality, once the evidence tells you something's going on, doesn't mean it can't put it out, the Segway put it out. So pick your point at which point you want to adopt. And we haven't mentioned it before, the guerrilla game. But the other, I'm going to go to the whole book because it's way late in the podcast, but the idea is basically start small and add regularly if and when the winners start to be clearer. So, you know, I think the Segway's going to be a thing. I'll invest some money. Gee, it's really, really turning a thing. I'll invest some more money. Oh, it's stopping a thing.

1:26:28Okay, it's time to sell. E-bike's going to be a thing. I'll put in a little money. Gee, they really seem to be a thing. I'll put in a bit more money. Man, they're really a thing now. This is a great company. Make them really profitably and really successfully and I'm going to invest even more now. And, yes, you've missed the early wins and, yes, you wish you'd go back and take the Segway money and put in e-bikes instead. But the idea of kind of adding as the coast becomes clearer, as the likely outcomes, never guaranteed, but as they become more likely, then, yes, you're not going to get the big percentage wins as you might have done earlier, but you're also not going to suffer the same degree of losses.

1:26:58You have the evidence already home. It's why you always have to frame returns through the risk-adjusted framework. I know it's a mouthful. I know it's a really wanky finance bro thing to say. But it's not. That's what matters. Your return must be considered in the context of the risk that you took. Yep. So on Strongman, we've got all these play money portfolios, right? And there's people on there who have just like crushed everyone. But when you look at their portfolio, they put the maximum allocation they could into a two-cent stock that happened to strike gold. That's right. And I'm not trying to take anything away from it, but it's just like you get the best returns.

1:27:36Like on the leaderboards, you're the top of the pops for that particular period. But the risk-adjusted component of it is very different. There's someone under there who got a half as good a return. Yes. But the investments they made were going to work out six or seven times out of ten. The ones that you made and worked out would have normally only worked out one time out of 10 or one time out of 100. Risk-adjusted matters. Because we've often made the analogy like the best return is the lottery ticket. But on a risk-adjusted basis, it's the dumbest investment you can make. And you've got to look at it.

1:28:10You've got to look at it in that way. And that's why I always say that there is absolutely lots of different examples where things get more expensive on the price. And there's our little human brains. We just sort of focus on that. But there's lots of the price goes up and up and up with the risk-adjusted return. But like on a risk-adjusted basis, the investment merits go up and up and up and up. It's more and more of a no-brainer. And you're just like get over yourself. Yes, wouldn't it have been good if you bought it? Yes. Yeah, I agree, Einstein. That would have been wonderful. But that was then.

1:28:40This is now. What are you going to do? And don't comprehend the error by saying it's too late. Yep. Yep. So, oh, okay. You think the internet's going to peter out. Okay, fine, maybe you missed the boat. And this is just a temporary boom in the full arc of human history and we'll look back and laugh at how we all did this internet thing. Or you might suspect that, no, it's got a long way to go and, you know, et cetera, et cetera. Beautifully done. I think we pretty much took this one out, mate, but a fascinating conversation. We're very glad you brought yourself an EV. Go on. So we had a conversation before this, like, what are we going to talk about?

1:29:18Yeah. And we always had a bit of a preamble. This was an entire preamble. There was no topics touched. This was all the lead-in. This was all the tansy for the podcast. Correct. And now we always do that, but I think this is a first where it's actually full 90 minutes of preamble. I bought an EV this week. 90 minutes later we're done. That's the take-home message. And with that, enjoy the rest of your week. What little there is. Enjoy the first half of your weekend. We'll see you on Sunday morning. Until then, Fool on. Cheers.

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