I buy stonks

JUST IN: AI companies represent 45% of S&P 500

Fernando Mendoza prepares for the NFL draft by building an unreleased set of Lego: Lord of the Rings Minas Tirith

KPMG is laying off 10% of their audit partners. You might have missed the news amidst today’s announcement that Meta is also laying off 10% of their employees. I’ll be blunt: If you work in front of a computer, your job isn’t safe. It doesn’t matter how senior you are (KPMG’s partners literally own the company). Nor does it matter how good you are at your job (Meta’s engineers are among the best of the best in the tech industry). Your job is at risk, and it’s incumbent on you—and no one but yourself—to plan for what you do in your career to proactively manage that risk. Four reasons why this is happening: 1. Competition: AI is reducing barriers to entry across every industries, from professional services (such as the audit and advisory services provided by the likes of KPMG) to software and everything in between. Reduced barriers to entry mean increased competition, which means lower pricing power, margin compression, and pressure to reduce costs—especially fixed costs such as labor, which is the number one expense for most white-collar businesses. 2. Need to Invest: As incumbents face increased competition from new entrants to their market and from substitute products (e.g., vibe-coded homebrew SaaS replacing expensive vertical SaaS products that previously enjoyed virtual monopolies within their respective target markets), they are forced to make sizable investments in technology to remain competitive. In the case of professional services companies, this means large investments in proprietary software (all of the Big Four firms are investing billions in new technology right now); for big tech companies, this means tens of billions of dollars going into data centers and physical infrastructure. Essentially, capex and opex are in the middle of a zero-sum battle in corporate budgets. As companies face the need to invest more in capex and R&D—and as capital markets become increasingly averse to providing them additional liquidity to fund it, out of concerns that the ROIC on said capex will not be accretive to earnings—opex is cannibalized to fund capex. And, again, the primary lever CFOs in white-collar companies have to instantly reduce opex is layoffs. 3. Automation: These competitive pressures are compounded by AI rapidly automating work faster than incremental revenue is able to be generated. In other words, workers are being made redundant faster than companies are able to come up with the new business that might otherwise save those jobs. Some in the tech industry (people far smarter than me, I will add) conjecture that, on a net basis, AI will create more jobs than it will destroy, due to an AI-facilitated period of hypergrowth and a corresponding boom in corporate earnings. But with every company I advise, across the worlds of startups, SMBs, and large industrial companies, I’m simply not seeing that yet, and I don’t know anyone who is. 4. It might feel like ancient history at this point, but many companies are still dealing with the excesses of the Covid-era labor market. Money was loose, talent was in short supply, and software companies, financial services firms, and professional services companies hired too many people too fast, with standards that were too low. They’ve made significantly progress in right-sizing their workforces over the past couple years (return-to-office mandates, for example, have essentially created “soft layoffs” at many large companies), but much work still remains. If you’re picturing your career and your company as you read these words, I can’t emphasize it enough: Plan ahead. Build a network of people outside your company who would want to work with you if your current job were made redundant. Think about businesses you might want to start (it’s a lot easier to keep your job if no one but your customers can terminate you). Set money aside. Be proactive, not reactive. Be a predator, not the prey. Because these trends are inexorable, they’re unstoppable, and, chances are, they’re coming for all of us. Start planning. And start planning now.

My wife left me in the spring of the year I bought my seventh community bank. She said I had become unreachable. She was correct. I had spent the previous eleven months reading 20-year charge-off histories for a $62 million market cap bank in eastern Tennessee and I had, in a literal sense, stopped hearing her when she spoke. I was not ignoring her. I was underwriting. There is a difference, but it is not a difference that matters to the person on the other side of it. She took the dog. She took the good couch. She left the filing cabinet, which contained, among other things, 14 years of annual reports from banks in towns she had never heard of and would never visit. I sat on the bad couch for a long time. Then I got up and I kept buying the banks. The Tennessee bank was acquired 31 months later at 1.8x tangible book. The return paid for the divorce and the couch and a down payment on a house I live in alone. I do not recommend this life. I am describing it, not prescribing it. But I will tell you that the banks never left. The banks paid their dividends every quarter, on time, for 14 years, through two recessions and one pandemic and one divorce, and the banks are still here, and the banks will be here when I am not, and there is a version of fidelity in that which I have stopped trying to explain to anyone who has not felt it.

NEW: AI startup unveils "anti-Grammarly" tool that adds typos & grammatical errors to emails to make them seem human-written.

Today we’re introducing two big steps for health at OpenAI: - ChatGPT for Clinicians, a free version of ChatGPT designed for clinical work - HealthBench Professional, a new benchmark to evaluate real clinician chat tasks We’re excited about what this can unlock for care. ❤️

It’s not just new, it’s newspeak

Do the people in the 15 cars backed up at the Starbucks drive-thru not realize that if they park and walk in, there's no line at the counter, or do they just dislike getting out of their car that much.

Universal HIGH INCOME via checks issued by the Federal government is the best way to deal with unemployment caused by AI. AI/robotics will produce goods & services far in excess of the increase in the money supply, so there will not be inflation.

I keep wondering if this dude will actually retire a hero or just roundtrip most of it, because when it comes to trading, there are very few people who can do what he just did, VERY impressive, but almost nobody escapes the ego trap that comes after. The only escape is to retire from the exact sector where you won the most, and that is a brutal ask when you are young and you just won your first Super Bowl. Why would you leave the field right when the world is confirming you were right? As always the hardest trade is exiting the identity. Also, I see very few people talk about the non zero chance that this whole AI boom just ends up not being a good financial model, and then things crash. We have seen this before across history, where the world gets excited about some new infrastructure like railways, the electric grid, or highways, builds into it very aggressively, and then the economics end up breaking. I think there is a non zero chance data centers are the next version of that, the next global excitement where everyone rushes in, too much gets built, and that ends up bankrupting the economy. And if that is the case, then Leopold probably only has 3 paths. He either does a complete 180 on his take to keep winning, retires, or doubles down and roundtrips all of it.