Ireland's New Investment Tax Scheme Explained & An AI Pick from Investicon

0:00This episode is brought to you by Facebook. So you were scrolling on Marketplace and there it was, the bike you'd been searching for. You sent a message and it turned out the seller was super chatty, kind of funny, and an avid cyclist. The next thing you know, you're in a cycling crew. Well, a community cycling group. The thing about Facebook, you might find more than what you're looking for. From a browse to a bike ride, this summer, find more on Facebook.

0:30Emmet:Welcome to Stock Club, the podcast where we find and discuss stocks that anyone can buy, many of which we believe will go on to grow your wealth.

0:45Emmet:Mike, how are you doing this week? Did you enjoy Investicon? I loved it. Yeah, it was brilliant. I think I said the same thing after Investicon last year. I've never been, I've never had the introduction of, oh, you look small, you look taller in real life than what you sound like um but no it was great it was great to meet so many people so many listeners of the podcast um on your leisha eric derek and trying to think i'm definitely forgetting some names um just off the top of my head but no i had great chats and i just think doing something like that in ireland provides so much value to a lot of people and look we're gonna we're gonna discuss that in the episode today as well of just kind of how far behind we are in terms of building and investing culture and like i know it's very small stuff and we're patting ourselves on the back but doing something like that in the real world with people and like there's such a varying level of investor there like some people were asking me about the best place to set up their first account and other people are asking no more than me and they're talking about really niche stocks or whatever else so i just think you got the full gamut there and then we're lucky enough to hear some amazing amazing talks from from some of the world's best investors as well and to do in Dublin I think that's special so I am really there's a lot of listeners came up to me at the on the day I just want to thank all of them and I hope you enjoyed it as much as I did because it was brilliant likewise yeah it was it was really good it was a feel-good event the room was full it was a great venue the speakers were absolutely outstanding and the feedback we got was great but I'm not trying to throw roses at ourselves because I totally agree it's small there was 180 odd people in the room but the target we have to paraphrase something david gardner said on stage really can't be seen at the moment we're trying to build something way way bigger and it's a it's a journey of a thousand steps so i absolutely so enjoyed it this year because just everyone was on point it was fast it was entertaining some of the speakers were all the speakers were delightful but some of the speakers ideas i hadn't even heard of so i just thought it was a wonderful all-in-all event and uh it was a nice time of year in the right city to do such a thing yeah and as well you mentioned that like we're trying to go through the recap of everything that was said on stage but i need another like internal recap for all the ideas people are coming up to me with uh because that that was as much of an interesting list and more um so yeah no it was really cool totally agree so you touched on something there which was i might paraphrase to say a change in the investing climate is on the horizon for Ireland and after a lot of conversation in the media and speculation in the newspapers we're on the eve of some important changes for the everyday investor and we thought it'd be a nice time for you to explain what's coming.

3:40Yeah so published the first Monday of this week so yesterday for us recording a couple of days back for when you're listening to this so tarnished uh minister for finance simon harris alongside minister of state robert troy they published what they called the roadmap for taxation of retail investment here in ireland um so essentially what it is is we've talked an awful lot about these new investment accounts that are rolling in so it was outlining what that's going to look like um you know it is it's something that we've been waiting for for ages it's something that we've needed for ages i mean we just mentioned it in the kind of intro there talking about investicon in particular but just on a wider scale ireland is not a country of investors um so they've actually this was from the paper they published themselves our cash holdings sit about like 38 percent of wealth is in like deposits and low income low income savings accounts low low return savings accounts and then our stock market press participation is at 2.3 percent the eu averages for both are 30 and 7.5 respectively so we're one of the richest countries in the eu and yet we are way way behind when it comes to investing and then that's despite like we host all the major financial financial institutions in the world they're down in the ifsc more or less you throw a rock down there you want to hit multi-billion dollar investment companies holding companies whatever else we're an international finance hub and yet our public simply has no interest in investing.

5:13And this has to change. And in fairness to the government, they are, whether we're going to critique them, maybe fairly heavily in this episode, but they are making strides to get that money working and to try to build this culture of investing here in the country. So Monday at the press conference, Simon Harris, he stated, the investment account is about giving people another practical option. It will bring different types of investments together in one account. Take the tax administration away from the individual and give people flexibility to access their money when they need it. And so that outlines it in a sense of kind of what we're going to expect here because they haven't given us all the details yet.

5:52So let's get through the nitty gritty before I kind of introduce it. Basically, next year, these investments accounts, they're going to be around for any Irish domicile tax resident who's over the age of 18. It's going to have an annual contribution limit, a tax-free threshold, and then above that threshold any uh any any value of the account will be taxed at a low flat annual tax rate now we don't have details yet on these actual figures these three which kind of define the whole thing so they're going to probably a cap cap as well there i'm sure

6:26Emmet:there's a top top limit so while they're going to tax extra bit extra additional amounts to a flat level you can hardly expect it to be an infinite you know uh ceiling if you know it's not this tax loop for the mega wealthy but but the thing is that they've withheld the details of that that's only coming out uh i think it's october 6th when budget 2027 is announced so depending on how they handle the threshold what the annual tax rate is this could be a great success or it could be completely useless for an awful lot of folk my fear is that you know in avoiding being perceived as a tax break for the wealthy which is kind of a political whether or not it's right politically it could be you know a stick to beat them with they might bring in either like too low a threshold and make this whole exercise pointless but then you know you can't blame them for doing something they haven't done yet so i'm kind of yeah i'm withholding criticism then but for context um those those three main details make it sound a bit like very much like the Sweden's ISK model and then maybe a happy marriage with UK's ISA so for content Sweden has a tax-free threshold around 27 ,000 euro the annual tax rate above that was one percent this year and there's no contribution limit with an ISA there's no annual tax in fact all growth in your ISA is tax-free the only restriction is the contribution limit which was 20 000 pounds this year and that's user lose it if you don't contribute in 2026 it doesn't roll over to the next year now the problem with the swedish model and the annual tax in general is that you can get taxed in a down year so if you are we'll say oh really oh that's that's cruel yeah so if you say 10 grand over the limit that tax that could get taxed at one percent even though you lost money that year which isn't right and again this this makes me think that that's kind of saving perhaps or trying to avoid a political political kind of backlash i'm not sure like i would much rather see a straight up isomodel but so be it um it is a lot better than what we had which is less than nothing it's like you know not even is it enabling investing it's prohibiting investing so i i guess beggars can't be choosers but you would love for them to do it right the first time so i kind of i'm in two minds about that now like where the government does deserve credit is the simplicity behind it so they're building this with simplicity at its core in terms of a product there's no there's not going to be any deemed disposal on etfs held within it you can hold shares bonds etfs other funds other regulated products in there and then And most importantly, I think this was the kind of key cog of the whole machine for me is that the providers of the product will calculate, report, and remit tax directly to revenue on the investor's behalf.

9:24This episode is brought to you by Facebook. So you were scrolling on Marketplace and there it was, the bike you'd been searching for. You sent a message and it turned out the seller was super chatty, kind of funny, and an avid cyclist. The next thing you know, you're in a cycling crew. Well, a community cycling group. The thing about Facebook, you might find more than what you're looking for. From a browse to a bike ride, this summer, find more on Facebook.

9:54Emmet:That's just great. So it's really designed to take all the effort away from the end user who, like most of us, don't have time to get our heads around the multi layers of tax and complexity. and it's just lovely to have a simple product that parallels what was that oh yeah special say savings scheme is that what it was called ssia ssia do you do you remember that mike it was before my time but i had about it yeah it's basically that was i think very much a tax break for the wealthy it was free money for anyone who could put money away that as far as i recall the government would match it to a level and i see everybody landed a whole pile of free money when the Celtic Tiger was just on on a roar yeah um and I was too busy I didn't do it everybody I know did it but I was too busy lashing all my cash over to America to buy shares on the through my stock brokerage firm but this feels like the more grown-up considered benchmarked way for every person to participate so I have a question and I know you don't we don't know anything except or what we're kind of reading um but is there a minimum age can you do one for your kids do you know so they actually mentioned this as down the line potential future kind of evolution of this um specifically so i think we will and it's important i think to view this and we are we're already critiquing it but it is important to view this as the first stepping stone in what will be you know this will be decades and like you know in a hundred years time this will be kind of the the genus of the investment accounts and and investing as a retail investor in Ireland because there are literally no options actually less than no options there are restrictions and like things actively stopping you from investing in Ireland before this so this is where I do give them a bit more leeway and I think with the simplicity they will get by it because you're removing like the daunting thought of the tax situation for an inexperienced investor which is a huge plus um and there's flexibility too there's no minimum holding periods or lock-ins or anything like that so it's simple and flexible which depending on the investor you're targeting and we talked about the numbers there how few people in ireland are investing in the stock market outside of their pensions this product is probably viewed as a introduction to the stock market and so when you think through that guys simplicity and flexibility is very important uh whether that comes at the expense of more experienced investors will depend on the details we get around the tax rate around the threshold around the contribution limits so um yeah without without us again having all the facts it feels like it's the one thing everybody should do to the maximum of their ability i think so like as in it'll definitely be and simon harris said it it's another option for investors and we've got to think about this in terms of who will be investing what options do they have already available to them what stage are they in life you know what i mean like there will be people who want to invest but maybe they're already maxing out their pension and they're putting cash aside for a mortgage so this is a down the line product for them so it is this is this is universally available to every adult in ireland and so with that being said you know like as in people who are into movies might not like very basic movies but if you're trying to make a movie for absolutely everybody you know you have to kind of round the edges i suppose and that's we'll be talking from and talking to experienced investors who maybe want an awful lot out of this product but for to make it applicable for absolutely everyone and to try to make new investors through this product you see where they're coming from a bit um so in terms of providers i think any any authorized provider so investment firms wealth managers credit institutions you know insurers they can all provide this account as well as that this is important non-irish domicile providers can do so as well so that brings in the neobanks revolute to giro trading 212 they can if they want to provide this account and talking about Revolut in particular I think it's something like 80 % of Irish adults use Revolut.

14:18That would be a real, if you're talking about removing obstacles, you're already in the pocket of four or five Irish adults there. It would be amazing if they did it but the thing is I don't think they will. I don't think any of these companies would be interested in doing the tax reporting themselves. It would be too hands on, it would be too much effort for probably not that much in terms of commissions maybe Revolut just because of the presence they have in Ireland Revolut Ireland could kind of do this almost as a like goodwill kind of thing but I'm not sure I hope they do just because that would really and if I was the government I would really be talking with Revolut right now just in terms of access and reducing as many obstacles as possible because I think that would be a big key in its success whether it happens whether it's worth it for them to do it i'm not so sure um but yeah that's the investment counts it's as i said we can only speculate because we don't have the full details yet it's tough to give a fair judgment when we don't have those three key figures the annual tax rate the contribution limit and the threshold in its best form i guess it could be a happy marriage between the swedish isk and then the uk's isa which have both been incredibly successful if the goal is to drag beginners into investing the simplicity of it looks like a winner and then hopefully it it turns into a first step rather than a complete we've done that we tick the box now we can move on because this is coming from eu pressure uh you won uh christian lagarde this is terrible christian lagarde yeah she was up on stage she just um is bringing in these eu investment accounts and trying to concentrate investment in the continent instead of it all going to the US.

16:03So this is Ireland, in a sense, ticking a box to kind of stay in line with all the rest because we were so far behind. And I'm going to get to the bad news now as well. I was going to say. Because, what would you say is the opposite of a cherry on top of something?

16:21Emmet:The opposite of the cherry on top, I'm going to go away from the ice cream analogy and I'm going to say it's the stone in the shoe. Stone in the shoe. That's fair. That's a lot more polite than what I have written down. Go stone in the shoe. I won't even ask you. And the stone in the shoe. Something unpleasant in the ice cream is what I presume you were going for. No, it was on the shoe as well, but it wasn't a stone. Okay, right. Stone in the shoe. Opposite of cherry on top. Go for it. What is it? But they're pushing out all discussions around existing tax reform on investments to 2028 and beyond.

16:56So that means no eradication of deemed disposal. Capital gains tax will remain at 33 % and anything outside of these new investment accounts will remain pretty much the same as it was which is fairly tragic to be honest I mean they surveyed insurance companies who said 70 % of life assurance exit tax relates to the eight-year deemed disposal charge rather than customers cashing in on their portfolio which is just nuts like you're literally punishing investors for long-term investing. But what's worse than that is these same companies said that in the long-term, abolishing the tax would be neutral to the balance books as there would be exit taxes on full cash pots.

17:38So not only is it prohibitive, not only is it rewarding the wrong behavior, like punishing good behavior, any, the most basic investment advice you can think is invest for the long-term. And in Ireland, we actively go about punishing it, forcing people to avoid it basically promoting short-termism and then it won't even on top of all that it what these insurance companies are saying it won't even actually make that much of a difference financially to the exchequer so i don't know what would they give with one hand they take away with the other like me and you are stock pickers but that's our full-time job we research stocks all day for the average everyday investor who wants to invest in the stock market but doesn't have the time to do the research we do and doesn't want to lock away their cash until they retire what are they actually meant to do these investment accounts are now an option and maybe it's a thing where they're bringing in these investment accounts and they don't want to push investors to new kind of vehicles because of you know it's like okay well we launched an investment account but we also got rid of deemed disposal so we have new investors but they're all just investing you know in the S &P 500 and their DeGiro accounts instead.

18:54So maybe if you're a bit conspiratorial, maybe they avoided doing that to promote the investment accounts themselves. I'm not sure, but like we talk about focusing on simplicity with these new accounts. Meanwhile, where they have the most obstacle-laden prohibitive tax code known to man that they decide will be fine for a few more years. So it's just nonsense. We were at Investicon last week and the Americans were learning about Dean's disposal as if it was a horror movie. You know what I mean? David Gardner was on stage literally like making sound effects like it was scream or something so look it's just we don't need to hear another rant about Dean Disposal on this podcast.

19:31Emmet:David was calling it doomed disposal. Doomed disposal exactly. We had Dean Mary Margaret Frank who's the Dean of NCU North Carolina University who is one of the acknowledged tax experts in the world describe to the audience how you go about assessing the tax events in your life are you taxed at point of entry are you point a tax at point of exit or is there a synthetic taxation point before exit so the deemed disposal says after eight years you owe tax feels like something from goodfellas movie where they get maury in a headlock and they're like give us our effing money like it's just wrong it is so wrong it's illogical it's immoral It is putting the boot of oppression on the side of a nation who have taken all this time to start to aggregate a little bit of wealth.

20:25Emmet:It is the most moralistically wrong tax I have ever heard of in my life. Not that I'm an expert and have a big book of moralistically wrong taxes, but it's bizarre. It's crazy. It's preposterous. It's unfair. And they're talking about both sides of their mouths as well. Both sides of their mouths as well. because your man troy the minister of stage was saying basically that it's like you know archaic it's going to be a thing of the past and yet now we'll push that out to 2028 and beyond so maybe it is just this like let's focus on the investment accounts for now we'll get to that eventually but like saying this for either political clout because you know it is a a topic that people want to hear about and they're not acting on it is that worse than anything they've been doing in a positive sense i don't know um but it just it kind of beggars belief i think it's overly conservative they don't want to change too much at once maybe and i it's a pity that we're ending this segment on a negative because there is a real positive um change to how we invest in ireland i think the success of these accounts if executed well could be a real a kickoff point to bring in loads of new investors in the country but they have still so much to do and and it's a per person or uh what i mean by that is if you're in a committed relationship or a married couple it's one each it's not one per household individuals yes yeah i think so too and if you have children and when they make that changed you know there's a lot to celebrate but for now uh we'll do the irish thing and be like ah it's good it's not good enough and it isn't good enough but anyway it is good yeah yeah yeah so yeah i probably should i probably should have not ended on such a sour note but ultimately i'm gonna drag it up baby because this is a conversation that's so irish so quintessentially relevant to our fellow country people um but i i'm gonna talk about something that's nothing to do with tax-free investing if you're an irish citizen um uh is there anything left for us to say on this mic no no no no i think i've said everything and more well what i've decided to is go the opposite side of the proverbial room to you where you've described something of benefit i hope to all my fellow fellow country people but i'm gonna pick so at investicon we had a range of speakers as we've extolled on this podcast for several weeks now.

22:56Emmet:We've had Bill Mann and David Gardner and Mary Margaret Frank, and we've had a lot of speakers, but one is a gentleman known to regular listeners and known to his mother as Eric Bleeker, who owns 24-7 Wall Street and is the soothsayer of AI investing. And he attended Investicon last year and called out the name of several stocks. We asked for three, but it just kept going. And they are all, they're all up, I think, with only one exception. And they're all meaningfully up. So, but that isn't just a fluke. Eric has been, Eric has a really properly intellectually deep insight into this, I suppose, human theme of the 2020s and beyond.

23:46Emmet:That is AI. And what I'd like to do is just kind of give what I heard is the summary of what Eric said at Investicon and just name one of the stocks that he spoke about. And I'm going from memory, so our listeners and attendees will have to forgive the finer nuances, which is Eric's speciality. So his central message was that artificial intelligence or the artificial intelligence boom is entering a new and potentially far more consequential phase. So we've spoken about chatbots and we've spoken about the entry level AI. Most of us have experienced AI in the form of maybe interacting with ChatGPT or Claude are going onto a website and seeing a little bubble pop up and interacting with it.

24:36Emmet:there. That's how the average person on the street has interacted with AI. But now it's becoming autonomous and it's spreading across all types of enterprises, every enterprise set. And in doing so, it's creating, I guess, an extraordinary race to build the physical infrastructure required to support it. And again, we've spoken about this on the podcast, Mike, usually under the auspices of Amazon's build out of all its AWS and AI servers and how Google is possibly at the front of the race and we've spoken about Anthropic potentially having a two trillion IPL. We've spoken about loads of things about the giant players but you know when you get a little more down to it if you got a bunch of women and men and people in Truman said hey we got to build some AI they got to do physical stuff.

25:26Emmet:And the main trust of Eric's chat was that the scale of that race to build the stuff is just so hard to overstate. Like estimates of hyperscaler capital expenditure have risen so much just even since last year's Investicon when at the time the combined spending by Amazon, Microsoft, Meta, Alphabet, Oracle and SpaceX potentially was they said at the time is going to reach about 1.4 trillion in 2027 and now in some cases individual companies could be investing seven to thirty times as much as they did in 2023. So what we're talking about is companies spending absurd numbers on the build out of AI.

26:19Emmet:So much money, the normal human brain doesn't really understand what that means. We are creatures limited in our thinking by the exposure to what we see and interact with. So when you hear of a million, you can picture it. When you hear of a billion, you think, when you talk about trillions, it is an absurd amount of money. So we're talking about spending that reflects a profound change in demand. And all these businesses, they're not doing it because they just want to keep up the Joneses, because they all independently, whether an absolute airport hanger full of MBAs, thinkers and tech experts, market planners and watchers have seen that this is the way the world is going.

27:03Emmet:And agentic applications, these are the applications that perform tasks, use tools and complete workflows with limited supervision. Agentic kind of is left to work on its own. They have moved from a tiny marginal share of AI activity at the moment to the dominant source of usage. Things are changing fast. And adoption is also spreading way beyond software engineering. it's creeping into legal work and sales and recruiting and marketing and healthcare and finance just name an industry and AI is is really re-engineering reimagining re-targeting the way that those businesses and industries work and as agents perform more work token usage sharply rises which forces AI companies to secure enormous amounts of computing capacity and if I may pause for a minute so those who interact with ai might have heard of the expression tokens i need tokens and as a just a rough rule for our listeners interest 100 english words in an ai system uses about 130 tokens so it's the measurement it's it's i guess you could call tokens as the currency of ai because ai models have limits on how many things they can process at once so it's the conversation for your own personal usage how many tokens did i use today it's like how much money did you spend today in ai world and ai services such as anthropic and claude and all the rest uh anthropic is claude sorry such as uh claude and chat gpt they generally charge in accordance to the number of tokens uh that they read and generate so that's just a by Either way, it's how does an end company like MyWallStreet know how much money they're going to spend with one of the AI providers?

29:03Emmet:And that's a consequence of how many tokens they're using. Now, getting on to our experts. So scarce capacity can generate exceptional revenue. It's the simple good old fashioned supply and demand curve that's existed since the birth of commerce. And it allows newly constructed data centers to recover the cost of being built really quickly. So we can see, well, one can see the rollout of these massive data centers, whether we're being told they're the size of Manhattan or they're going across a field on Athen Rye. The cost of their build is evident. Any person can stand and look and go, well, that cost something.

29:43Emmet:But the scale, the speed at which the money being spent to build those things is coming back into the company's concern is huge. So it's a land grab. Hyperscalers are building as fast as possible to capture today's really attractive returns. It's analogous, I think, a bit like Bitcoin mining 15 years ago, though no one really knew Bitcoin was going to go the way it did. those who did it early were able to recoup the cost of the electricity they were using to get those bitcoins into their their drive or their wallet or whatever it was wherever you park your bitcoins um so they they what we're talking about is the land grab and while model developers are out there to compete for every available cluster so with all of that said at investicon last week eric argued that the most interesting opportunities possibly don't sit with the obvious AI leaders, the companies that we talk about and read about.

30:45Emmet:The next stage of the boom, he says, will be defined by bottlenecks. And these bottlenecks are seemingly mundane components and systems without which trillions of dollars of planned infrastructure cannot operate. So you interviewed him on stage and he threw out three names and many more actually that I never heard of. Did you ever hear of them Mike? This episode is brought to you by Facebook. So you were scrolling on Marketplace and there it was, the bike you'd been searching for. You sent a message and it turned out the seller was super chatty, kind of funny and an avid cyclist. The next thing you know you're in a cycling crew, well a community cycling group.

31:30The thing about Facebook, you might find more than what you're looking for from a browse to a bike ride this summer find more on facebook no no it's very niche manufacturers very niche yeah what do you call behind the meter stuff so like you're talking about for sure really specific really specific electrical manufacturers it's deep stuff and like as an air it's deep stuff eric's level of research and his expertise is really put into context i suppose the level you need to be at to really find the next opportunities um oh yeah for sure it's why it's kind of intimidating to invest in these next gen technologies because the the insider knowledge needed to stay not just to see what has happened but to see what is happening next is very in-depth.

32:27And listening to Eric was slightly intimidating for me because I was like, we have a great knowledge of what makes a great stock. But when you're talking about the trends and what's happening at this speed with this like high-level technology, that is a different skill set. So it is great to hear the experts like that.

32:49Emmet:But I totally agree. And I did envy you up there because you and I were mostly doing a round robin on the interviews. And when I heard Eric, it's an outpouring of deep intellectual understanding of a very complex area. And you did a brilliant job, by the way. I should have said it to you before now on air. But I mean, you're brilliant. But the nice thing about Eric is he doesn't need a whole lot of questioning because he just goes off and talks. Wind him up and let him run. Let him go. That's right. And actually, do you know something? um before i keep describing and name the stock he put together this absolutely stunning uh website for all attendees of investicon which paints the picture with beautiful graphs of where ai is going and who's behind it and what stocks one should invest in right now and what i'm going to say to our listeners is if you sign up to profit which is built with ai we're going to send you that website and the password to use it it's really really powerful and one of the things we heard from attendees is that's something else that thing that eric put together um i'm gonna name one of the stocks now but if you just want a deal on profit just email frank at my wall street dot com and say emmett said this thing in the podcast because as much as frank loves us he doesn't listen to all the podcasts so um yeah so one of the things that eric said to you uh on stage mike was one specific bottleneck is networking and future ai clusters will connect hundreds of processors within a rack tens of thousands across a data center and probably millions across different regions so when you build all these routers and routers they all have to talk to each other and moving information between all those chips is becoming nearly as important as the chips themselves you know it's a it's like uh that old joke about you know the first vacuum cleaner in ireland and throwing the soot all over your floor and realizing you don't have electricity like it's no good if you can it's no good if you can't have all the routers and gooders talking to each other yeah and not only that but the lack of supply has inspired a lot of efficiency gains of getting the most out of the chips in the compute that you do have and you see that coming from China but we're seeing it in the US more and more as well so this is on that trend too.

35:13Emmet:So what it means then when I say routers and gooders to get a little more technical is the world needs faster optical connections and specialized cables and technologies that bring communication components physically closer to processors and these could therefore capture an increasing share of the industry's spend because all eyes in the AI world go to NVIDIA when they bring out the latest big black chip huge big thing usually the size of a of a shoebox but thinner and it's ooh but you know it has to go somewhere as almost as specialist as that very chip and a second more immediate constraint is good old-fashioned electricity and data center developers are submitting power requests that dwarf the capacity currently available from regional grids.

36:07Emmet:In Texas alone, proposed connections to the electrical grid amount to multiple, many, many times, the peak electricity consumption of major global cities. Transformers and switching gear and grid interconnectors can take years to secure while power station or power generation across the U.S. has barely grown this century. So what's happening is this is prompting a real rapid shift towards behind the meter generation, which is what you said a few minutes ago, power produced on site and delivered directly to the data center. And what effectively is happening by bypassing the transmission grid as it's known the electrical grid and some of it as some of its most constrained equipment developers can now bring new capacity online sooner so we think about turbines and fuel cells natural gas infrastructure specialist power providers and so on could consequentially become important secondary beneficiaries of ai and then just before i get to the name of the company inside the data center another architectural change is approaching nvidia is encouraging the industry to move towards this 800 volt direct current system dc system which improves efficiency it reduces the amount of copper required and it's very interesting for electricity nerds i'll give i'll give eric that because i sat there and for a few minutes my eyes went commercial break and then i came back in because it really for the other 99.9999 % of humankind who isn't an electricity nerd it's kind of hard to keep connected to but either way that transition could disrupt incumbent suppliers of of electricity and create new markets for advanced power semiconductors and more compact methods of delivering electricity to processors so i'm going to unveil just one of the recommended stocks from investicon where as i said broadly by 30 stocks were recommended over the day by the greatest investors of our time so bleaker eric bleaker's chosen opportunity in the area is drum roll nobody heard of it before vicor which is on the nasdaq v-i-c-o-r ticker v-i-c-or and its technology addresses a problem that becomes more serious as computing boards grow increasingly crowded because power has to be stepped down before reaching the processor but traditional converters occupy valuable space that sit too far away from the die so the greater that distance the more energy is lost through heat my friends it is basic physics and it becomes and it gets harder to supply these extraordinary power demanding chips so vikors vertical power delivery modules are designed to move that conversion closer to the processor and eric said that i compared the opportunity uh with two earlier millimeter size breakthroughs which was high bandwidth memory which benefited from being positioned much nearer to compute die and co-packaged optics which shortens the distance traveled by electrical signals and if anyone is left listening listening to this podcast it will be a miracle because it's very nerdy but but this stuff folks is the bleeding edge of the cutting edge and really is the real deal and both those two technologies they created enormous new markets because at ai scale even a few centimeters in a data center can carry mega economic consequences and before i shut up i'll just say that the decisive catalyst may be whether nvidia substantially increases the voltage delivered directly to future trips uh chips i mean to say because if it does eric says that vikers approach could move from just being a nice attractive engineering solution to being one of the essential enabling technologies so it's a bit of a if then statement there um but revenue and earnings are already expected to grow strongly so it offers a way to invest in ai build out without simply buying into another model developer or semiconductor giant and i'll just wrap up by saying that i i found that the broader lesson is that uh ai's winners just keep changing memory yeah oh yeah i mean like you and i got a whole bunch of wherever the bottleneck moves to yep memory and processors dominated one phase and networking in power is likely to dominate the next phase.

40:51Emmet:So rather than predicting which model wins, investors can look for scarce technologies every competitor needs and for small physical constraints sitting in the path, I guess, of an unprecedented wave of spending. And that's where his three recommendations were focused. And that was Vicor from Investacon. Yeah, see, I feel like I need an electric engineering degree you just understand all that how does this sound and i know like this is where the money is going for sure whether it's how long it lasts you know what i mean these are all cyclical manufacturers and we're in the middle of a boom cycle that's kind of unheard of that you know like as in there's a boom bust every now and then for these cyclical manufacturers but this is just 10x anything they've ever seen oh yeah but in terms of the longevity like as in if you're buying stocks for 20 years do these fit into it i'm not really sure it makes it interesting and it's it's it's kind of the ai debate in my head it's why i not actively avoid ai stocks but if we're talking about stocks and genuinely recommending them for 20 years you know on our paid services um does the ai cyclical nature of these businesses fit that so yeah it is an interesting debate i think we could be here for another hour if we wanted to talking about it but instead i think what i'm suggesting now next week we're going the least ai affected business we can find on the public markets how does that sound sounds good okay so talk about something that your grandpappy would have understood yeah and hopefully that your grandchild will still be able to benefit investing from in that yeah i have a bunch of names and i'm sure you do too because really it's exciting and for some very interesting when we talk about ai and how it feels like the 1999 of of the internet um but let's just talk about a good old-fashioned company that's just going to keep on growing them their profits yeah all right i think that's it well i've nothing left to say i do you know me i always have something to say but i'm not going to say anymore that's it i'm finished i'm not saying anymore i'm finished i'm talking no more damn it thank you for joining me and thank you everyone for listening in uh especially those around investicon last week another uh thank you i remembered a few more names i'm just looking through my linkedin because i got everyone to add me there it was the easiest thing to do so laura anya as well thank you very much it was great chat with you and we will talk to you next fall is the perfect time to refresh and reorganize your space at the home depot find power tools and tool sets starting at 50 to help tackle diy projects home updates and more whether you're drilling brackets to support new shelving or sharpening your hedge trimmer blade with an angle grinder the home depot has the tools you need to check projects off your list shop labor day savings at the home depot and gear up for fall projects with the right tools to keep your projects moving.