Market View: Guest argues we are not in a broad market bubble; valuations are reasonable for many mega-cap techs, with excesses limited to a few names.
AI Infrastructure: Core pitch is the bricks-and-mortar of AI—power, transmission, and data center build-outs—as the most attractive opportunity set for the next decade.
Quanta Services (PWR): Newly bought as a direct play on grid build-out, transmission, and power services required to support massive AI/data center expansion.
Alphabet (GOOGL): Positive on Waymo’s lead in robotaxis and Google’s ability to monetize in-car time via ads, positioning GOOGL as a beneficiary of autonomous mobility.
Microsoft (MSFT): Seen as a durable AI winner investing heavily in data centers; leadership notes power is the key bottleneck, reinforcing the grid/infrastructure thesis.
Tesla (TSLA): Long-held position with a nuanced view—FSD success would be a huge win, but near-term robotaxi dominance is questioned versus Waymo’s progress.
Power and Data Centers: Emphasis on energy constraints, transmission upgrades, and cooling needs as essential enablers for AI growth; near-term nuclear is unlikely, shifting focus to practical grid and solar solutions.
Strategy: Favor tangible infrastructure over overhyped private AI valuations; invest where AI demand translates into real assets, jobs, and recurring service revenues.
Transcript
This episode is sponsored by Interactive Brokers. So, are you looking to trade gold, maybe silver, platinum, palladium? With lowc cost and global access? With Interactive Brokers, you can trade spot metals, futures, and options on major exchanges, all from one powerful platform. Get efficient pricing, deep liquidity, and institutional grade tools right at your fingertips. Whether you're hedging, investing, or even diversifying, Interactive Brokers puts the world of metals in your hands, Interactive Brokers, a member of SIPC. Futures of course are not suitable for all investors. And US gold trading is available only to legal residents of the United States, excluding residents of Arizona, Montana, New Hampshire, Rhode Island. Interactive Brokers, the best informed investors. Choose them. Get ready. Get set. Visit interactivebrokers.com/metals and start trading smarter. >> The disciplined [music] investor is all about you, your money, and the markets. Sit back and get ready [music] for this edition of the disciplined investor podcast. This [music] episode of The Disciplined Investor is sponsored by Horowits & Company. If [music] you're looking for a portfolio manager, look no further. Horowits & Company. From seed through harvest, [music] cultivating financial success. [music] >> The government's back open. Ah, is that a good thing? October's eco data may be lost forever. Investors questioning values. We got the poster child in peril. And our guest today is Ross Gerber from Gerber Kawasaki Wealth. All this and much more on episode number 947 of the Discipline Investor podcast [music] [music] waits are not simply recovering A rotation that is not benefiting tech. How could that be? Come on. What are they talking about? Yeah, we're gonna get into this and a lot more today as the emperor's got some new clothes, doesn't he? Andrew Horowitz here and yes, risk assets are out of favor for the moment. I mean look at tech, crypto and the mess that has been created by the very I would say what aggressive super aggressive and reckless promises for companies like from companies like what open AI Sam Alman what he does the poster child of what is going on these days is clearly in my opinion Oracle and we've talked about this a lot the idea that that we have big concerns over the notion of what's going on with the allocation of capital visav things like circular financing, vendor financing and again I'll say it again the word reckless promises about future opportunities from companies like open AI that are basically spending money they don't have and they may not ever have and all of us going along with like hey yeah that's a good idea when in fact we know better. We know that the open as of open ais of the world that are promising what $1.4 4 trillion dollar of spend over the next number of years may or may not be able to do so. But yet the hope is alive. And we've talked about these concerns about this. But again, the one stock I think that is representative of this valuation concern for us is Oracle. And by the way, we are owners of the stock. Love the company. Love what they do. Love the opportunity. But remember things got twisted sideways and a bit haywire when they came out with the earnings last month. And at the same time, Open AI promised hundreds of billions of dollars that was going to be spent on cloud etc. utilizing the open the uh Oracle platform and the stock went vertical. It happened in a flash. went from 240 on the great numbers that they showed to 330. You know, we're talking about a $100 like, you know, close to 40% 38% of an increase in the stock on the promise from OpenAI. And you know, you can't discount what is going on there. can't say that investors were stupid because they got direct and uh very clear signals from everybody involved that this is something that's going to happen. But now where are we? Reality is striking. There is a bit of the emperor's new clothes that is coming out and we saw a bit of a turnaround in many of these tech names. where two what 1617 is the price now from 240 330 back underneath the the price that was actually the day before earnings and the good news was announced. So what is what does this actually if you stop for a second and think about it what does this teach us? I think we have to go back to what we know is that hype can really get things going, but it's difficult to sustain. And we all want to believe, we all want to put our money there. We get greedy. All of us do. But you have to be smart about it. The margin levels that we talked about over the last few weeks that we saw at all-time highs told the story. the fact that we saw companies ballooning their stock price on promises that were thinly veiled, questioning nothing more than, oh, okay, uh, how much higher can it go? Not where are they going to get their money from to do this? I'm sure we're going to get into this whole discussion with our guest today. So, I'm not going to get too deep into the weeds of this, but um this is the reason we actually clipped some profits over the past month. And we've been doing this a long ter time and and um I got to tell you something. I I've been doing this a long time. We haven't been clipping our profits for the long time. Over over time, we have, but I've been doing this a long time. And when things go vertical, it's usually time to reassess. markets can continue on much longer than we anticipate and we know that bull markets can be sustained for a really long time whereas bare markets usually are short. It's just what it is. The optimism is always there. When things are great, I want to buy. When things are down, I want to buy. So, we have to look at this as where are we in the cycle right now? And I think this cycle has got pretty long in the tooth. But that rotation that we saw clearly benefiting things like healthcare, valueoriented stocks, staples, utilities, that was something to behold. The people don't want to pull their money out of the market. What they want to do is just move it. So the bullish intent, the opportunity that is there, the optimism that is held is still pretty strong. Now, with the government back open, by the way, and congratulations. I think we have a key for that somewhere here, right? No, that's not it. There we are. There we are. Congratulations, fellas, for a job well done opening up the government after 40ome days. But what does this mean? Well, we possibly going to revisit this in in uh what is it? January. In January, we're going to get back to that. seems that we're going to start getting a flow of eco numbers. Uh to a degree, we're not going to see much of October, possibly ever. By the way, the the comments out of this administration has been that it it is possible that we will never see October numbers, which really is a problem. It it screws up charts. It screws up trends. It screws up analysis. I don't really understand why it has to be this way, but that's what it is. We have heard from many officials say that the shutdown could cost as much as 2% off of lap right off the top of GDP which will smooth out a bit probably in the following quarter as money comes back people get paid. Hopefully it's not going to interfere too much in the retail experience during what is about to be in a couple of weeks Black Friday and the holiday season. But the biggest issue right now, aside from the things we're talking about, and why markets I think are a little bit squirly, [snorts] is because Fed officials are still talking a bit uh hawkish. And there's a real concern that there's not going to be a gift in the stocking this Christmas of a Fed cut. There's going to be a lump of coal, no cuts in December, which I agree with. I don't want you to get coal, but uh I agree with that. probably at this point without the data as opposed to Steven Moran who says, "Oh yeah, we need to cut another half a percent without the data. How are you doing this information? How are you doing this analysis without the data?" And right now it seems more logical, healthy, and appropriate to wait it out a little bit. Let's see what's going to happen. Let's spend our time thinking about what we do know about and we do see here. There's no rush to cut in December. Make it the next meeting afterwards if it needs to be. Not going to hurt the economy too much. All right, with that, let's get going with this week's guest, and that is uh Ross Gerber. I am very excited to have him back. I always enjoy our conversations. He is the co-founder, president, and CEO of Gerber Kawasaki. wealth and investment management. He oversees the um GK's corporate and investment management operations as well as serves individual clients. He's become one of the most followed investors on social and traditional media. He's been on CNBC and Fox News and Bloomberg Reuters. He's a contributing writer for Forbes. He's been ranked as one of the most influential investment adviserss and fintech innovators in America. They have billions of dollars under management. So, let's get to that discussion. I think it's going to be pretty interesting. So, Ross Gerber, how are you? >> I'm good. How are you? >> I'm doing great. Uh, good to see you. Good to hear you. It's been a little bit of a while. I always enjoy speaking with you and watching you. You are very much out there talking about all the latest and greatest things. I think one of the things I saw you recently talking about was that about a year ago, year and a half ago, you started teaching your kids how to use AI and they were Yeah. >> They were they were like, "No, I can't do that." And you're like, "Yes, you can. Well, no. It wasn't that they said no. It was that their teachers told them that it was like cheating if they used AI. And I said, 'Well, how much do your teachers make, >> you know? >> Yeah. >> It was like, not a lot. Well, there's a reason for that. It's because they're threatened by the things that might actually be wonderful for education, actually. And so I immediately taught my kids how to use AI, not to cheat, not to write for them, but to help them learn because AI is a wonderful tutor. It's just a wonderful tutor, especially in things like algebra, which if you're like me and you haven't done algebra for like 40 years >> and then your kids like, "I thought you were smart at math, Dad. Do this problem." And I'm like, "All right, let me dig deep into the burrows of my brain and try to remember how to do that. And then I put it into chat and it just step by step explains how to do every problem. And I'm like, damn, if I was a tutor, I would be worried because this is way better than the teachers and the tutors. >> So, did you um have have have you done any like long division like like hardcore long div not not you know I'm talking about the long division that's like difficult? I I somebody recently was I'm like what is that? How do you even do that anymore? >> [laughter] >> Well, you know, I think a lot of school when you think about it in hindsight is really to like learn how to sort of deal with a lot of things whether you actually use them in real life for the rest of your life. You know, I would say most of it you don't, right? >> But like you think about how important it is to do math, you know, like to know just basic math that you use every day, right? M >> whether it's, you know, tipping somebody or this or that. A lot of people can't figure out 20% on a tip, you know. And so there's that. And then you get into the sort of like algebraic equations. And then you get into calculus where my kids are kind of like, well, what do you use this for, Dad? And I go, nothing really. You know, like mo most of what I do is financial. So it's really just like accounting, you know. >> But it's like anything else. You have to have a base knowledge in something. Like if you have a base knowledge in how a car works, at least you have an idea of that. you know if you have a base knowledge of uh if I started only using Excel I don't think I'd have uh the core understanding of how to un you know to to understand the calculations that went into something >> right so this is the whole thing that everybody fears is like that our brains turn to mush because AI brains will just like do everything for us and then we're like not capable of doing simple math or figuring out where things are um or even knowing how to be happy anymore because computers will just do everything for us and and and I That's what I try really hard with my kids is like, "No, put that down." Like, "Learn how to like do stuff." You know, one of the nice things about living in a area that's burned down is that you see a lot of construction. >> By the way, that's not something you hear very often. >> What's nice actually lives in an area burned down except for me. You know, there's like I don't know, what do I got? couple maybe 25 neighbors, you know, that as we're we're on the border, you know, like I I fought the fire and saved my house and in the part of the Palisades where we live, there was a small group of us and and then ultimately saved by the firefighters, but our neighborhood's fairly normal other than two blocks away is the biggest disaster zone I've ever seen. And now it's being rebuilt. And when you see construction, it gives me hope that humans will have plenty of jobs for a long time because I think these humanoid robots, it's going to take a long time for them to be as good to do roofing and things like that. >> Yeah. Let's go to the let's go to the core of this. Let's talk about uh one of the things I know I'll tell everybody else that hasn't maybe heard you before, which is probably only a few people, but um Ross is always on the cutting edge and coming at at looking at these areas particularly in technology. Um, and I want to talk about um, this AI thing that we're talking about here and the notion of what AI is and what it isn't, >> right? I think that's an important distinction that I think people don't really understand. This there's this AI that people think is much more like smart computing. Uh, you know, that and then this AI that is that next level, right? That that kind of uh, thinking >> they call it like AGI like it's smarter than humans. It knows everything. So, where are we? What is the difference? >> Where we at right now is that AGI, you know, AI is still pretty dumb. Actually, if you ask it, what are the best paintings for me to see when I go to the UI Gallery in Florence, it'll give you a good list of stuff that you want to see. But when you say, "Explain to me this specific painting and the story behind it," it doesn't know. And so, the tour guide knows. And so the humans are still vastly more intelligent on specifics than what AI is. And so AI is really good at certain things like languages. It's really good at math. It's really good at analysis of documents or pictures, but it's not actually that intelligent yet. And most of what AI is doing right now is just what I call advanced search where it's like looking at the documents you're requesting and then summarizing them for you and giving you the best parts of that information. And so it's highly efficient right now, but I wouldn't call it super intelligent. I mean, I like it for I love it, by the way. love it for help on minor rewrites, grammar, >> things, just things like that where you take an email and say, "Can you just clean this up for me?" And you get it back and it looks almost the same, but you realize, "Wait, wait, you know what? That was reversed and that looks that that sequence of that sentence is a lot cleaner and looks better." >> It's great for presentation formats, you know, like can you put this into a PowerPoint or like it now knows like when I'm doing I hate Excel like the formulas and stuff and now it [clears throat] like knows that you want to keep doing that formula. you don't have to keep putting it in, you know, things like that. >> Um, so those intuitive things are great, but what you're saying, like for me, like I write a decent amount, you know, and I, it used to really bother me because nobody in the company could edit that good, you know, and I was like, do I have to hire somebody just to like edit documents? And then, you know, you go through this process of this back and forth with documents until you're basically happy with it and then like somebody points out something you made a mistake on. You're like, "Shit, I almost got it right." You know, but I write, let's say, a fund report for the quarter for the GK fund, let's say. And so the way I do it now versus the way I used to do it is I basically um I dictate it into my phone >> and then I put it into chat and I say write this for me in a investor letter format you know and it does it and it's great and if I don't like some of the things I do I just edit it but like >> it's a 15 or 20 minute process that used to be like hours you know. >> Yeah. You know, it's funny. I have um back in during COVID, I did a Monday, it was maybe Monday and Wednesday, but I it was at least a Monday webinar that I invited everybody to come to that wanted to sit there and panic with me about all the stuff going on during co I mean straight up right from the beginning of it, right? You know, what was going on and I what I would do is I would take a pad like one of those yellow pads uh and I would write each day what I'm going to talk about. >> I have that entire I don't know is that 70 80 page pad 100 page pad I guess. I have that 100page pad filled up. I was thinking about taking that, scanning it, >> putting it into um uh you know, one of the one of the AIs and say, >> "Write this in a story for me or something of that nature, right?" You know, kind of like give the give this >> Yeah. Like tell the story of all these notes, >> right? Yeah. I don't know. Maybe something I'll do, but that's the kind of thing it's good at. >> No, it would be great at that. >> Yeah. And and I've thought about that too, you know, because like I saw a customer service thing that was basically chat, but it was like geared toward towards the company. So it was like ask me whatever you want to know about like using my company, but it like was AI. And I was like, dude, this is awesome. I've got to do this where we like feed in everything about like Gerber Kawasaki into AI. And then when people come to the website and they have questions, they can just ask AI about the company and it'll answer it because it will know, you know, and like all of a sudden you've you've like created a customer service function for your business, no matter how big or small your business is that could be extremely effective compared to the current system of like sending a message to some customer service rep. You know, customer service reps are in trouble. I would I would say that. Well, I would also say and go back to your conversation about how like tour guys. I was in a town um outside of Multipiano, Italy just I don't know a month and a half ago. It was called Orvietto and I was standing >> Oh, I love that town. >> Great town, right? I was standing in front of the >> You talk about the one on the hill. >> Yes. Yes. Yes. >> Oh my god, that town is so cool. It's >> It's like the only place that was never conquered because it was like >> so well built. >> Yep. any that beautiful church with the dome and all that and >> Yeah, it was the church with the Jewish stars in front of it. >> Exactly. So, I went in front of it though. I'm standing there and going, "What am I looking at?" Gosh, I said I literally said this, "I wish I had a tour guide with me right now." And then I'm like, you know, I have an idea. So, I went in, I turned on my AI and I started saying, "Hey, what am I looking at right now? What is this? What is this? What is this?" It gave me a pretty good discussion uh about what I was looking at. Right? And people, >> that's what I would do, too. >> The people I was with >> had no idea how this was going. There was this product available, right? And they're like, "What is that? What are you doing?" I'm like, "What do you mean what do I do?" It's co-pilot from Microsoft. It's just a nice easy app that just, you know, gives me all this stuff. And they were like the whole time freaking out. Let me ask this. Let me ask that. It's fascinating the amount of things that can be done today. We talk about some of the small items, right? Whether it's the formulas, the uh teaching a little bit, the uh the rewrites, um the brainstorming, the organization. companies are spending an awful lot of money on what they hope it to be one day, right? Where we have the ability for it to I don't want to bring up the Terminator kind of thing, but think, right? You know, I want they want it it it to think and and then therefore it can do other things, right? Okay. >> So, there's a big question about what's going on right now. Is it in a bubble? What's going on? Um, we've seen some rockiness in a lot of names after I've been I'll be honest, there is one particular thing I've been talking about that's concerning me. It's the vendor financing circular financing the issues particularly with open AI particularly with open AI and I'm like wait what what you know you're promising you know $1.4 four trillion dollars on losses over those years and and all these companies are making you know are basically banking on this or or you have like a Microsoft that is paying big money like let's I'm going to use a number just a stupid number a million dollars to a company XYZ and then they turn around and utilize that to pay back Microsoft for a 5-year contract on Azour right and basically >> or Soft Bank selling six billion in Nvidia stock to buy open AI stock which will buy Nvidia chips >> right So you basically in a way companies are taking money off their balance sheet and putting it onto their income statement, right? That's what they're doing to to to boost up their profits. You have Open AI making these promises like Oracle. Oracle for example, you saw what happened there. We actually uh full disclosure own Oracle. Had that great pop after earnings and then it's just basically deflated from there back down to >> Yeah. But it's up 100% in the last year. >> I got that. I'm just talking about from that one announcement. I'm just talking about the announcement. >> So with all that, >> you want a smooth You want a smooth stock market? >> I do. What do you mean? Straight up. There's no doubts of course. >> How long have you been doing this? It doesn't work that way. >> Hold that thought for a second. We're going to come right back to that. Uh I want to talk about Interactive Brokers for a second. I I don't want you to be fooled by what you see out there. These zero commissions that you see all over the place on crypto trades because some brokers add a spread to the price you pay. But at Interactive Brokers, there are no hidden fees and you'll pay much less than you would a place like Gemini, Robin Hood, or Fidelity. Keep more in your pocket and trade crypto for less coin at Interactive Brokers. Trading cryptocurrencies involves risk and is only for individuals with a high risk tolerance and the financial ability to sustain losses. Compare other brokers fees and see how much you can save at ibkr.com/crypto. Now, getting back to Ross Garber, we're talking about bubbles and we're talking about the valuations and I guess I guess the question is, you know, Ross, is are we in a is it a bubble? Is it a bubble? >> Definitely not in a bubble. We're not in a bubble for many reasons. I' I've been in bubbles. Fortunately for me, I was in two of the biggest bubbles ever, and I'm sure you were too with the real estate crash, which um you know, fortunately during the real estate period of time, I wasn't in real estate much, but whatever real estate I had at that time, I lost 100%. Let's say, and during the com crash, which was extremely painful. Um I had also made a fortune in the previous five years. You know, the S&P was up 20% a year from 95 to 2000 before the market peaked and then went down about 50 to 60%. So, if you go back into the bubbleish eras of those times, when there's a bubble, >> the feeling is manic, like everybody is making money doing this. Why are you not doing this? That literally nobody questions the bubble. What they question is why you're not doing this. You see what I'm saying? >> Yeah. Why are you saying when you got a whole bunch of people every day going, "Are we in a bubble? Are we in a bubble?" You know, for sure we're not in a bubble because you're only in a bubble when nobody's questioning it, >> right? What a big I understand that, right? That >> and then somebody like me who's like trying to be rational who manages billions of dollars is trying to be rational. It's like Palunteer stock, you know? >> And you're like trying to be rational. It's like explain this valuation. There's no explanation for it. So, yes. Is Palanteer in a bubble? Yeah. I mean, there's a couple stocks that are absurd. Tesla, you know, maybe is a little overpriced, you know, but it's like when you look at the market, when you look at Microsoft and Google and Meta, Meta is like 20 times earnings. I mean, come on. What bubble are they in? >> It's kind of interesting though that that that you get you get to the point that things are if if you don't want to use >> So, Microsoft's PE was twice as high during.com than it is today. >> Correct. That's Microsoft. You look at Palant. Yeah. No, I get that. Um, you know, you look at you look at um what happened with Michael Bur. Did you see that last week >> he uh put out a letter to his CL they he closed shop? He closed shop by the way. Fascinating. >> Closed shop today. >> Closed shop like done. >> I mean it's not really a shop. Okay. It's 150 million, you know. >> I know. But still he closed. He didn't have to close >> like three clients. >> But he could he didn't have to close. I don't know if he was making a statement. He's gonna >> No, I think that his AUM, you know, you have to have at least 100 million in AUM to file a shop and he was at 150 million and he short a bunch of stuff and and and you know, quite frankly, I I think he just doesn't want the scrutiny. >> Yeah, I would agree with that part. I I I think so. And he just gave up and threw his hands up and and all but kind of fascinating. Um some of the stuff >> see this bet this betting business is a tough business. >> You mean talk about options and all that? >> Well, yeah. and just this idea like I'm going to like bet that Palunteer is going to fall to $50 in the next two years, which is what he's betting. And he bet 10 million, let's say, on this bet. >> And I'm going, you know, >> he doesn't even make money until it gets to $50. And I'm like, you know, when you're doing these kinds of things, it it seems to me that you're not good at just buying Google and being happy with that, >> right? You know, like I always figured if I can make 10 to 20% a year over the long term, consistently over long periods of time, you make millions and millions of dollars, which turns out to be true. Buffett, probably the king of all time, made, let's say, 20% a year over the last 40 years. I mean, he's made fortunes. So, you don't have to go out and make 100x your money and be the big short guy, you know? Well, he was lucky the first time that it all paid off for him. He should just be happy. You know what I And there's a lot of people that did the same thing he did. They didn't have the financial wherewithal to stick it out as long or the uh the >> the coonus. Yeah. Yeah. Yeah. And they just got out and got killed and he just stayed in. That was great. So, who knows if he's going to be right by the way. >> But it's a horrible way to make money. It's like a really hard way to make money versus buying Google and just like sitting on it for the next 20 years. And and you know, since we brought up Microsoft, if you bought Microsoft at the high in 1995 and you held it to today, how do you think you did? >> You did very well. >> You know, you bought it in 99 at the absolute high. >> Very well. >> You know, how did you do? You know, and so like the truth of the matter is Microsoft's been wildly successful. Valuations have changed over time, but what we're beginning on with AI is what I call useful computing. See, what most people don't understand is most of the data we've gathered over the last decade and we put it onto these server farms on AWS and we've we have these great, you know, uh, abilities to buy things and get them right away or to entertain ourselves endlessly on video games or whatever. This has been a wonderful era of growth of the sort of cloud-based computing system. But what happened was you look at all this data and you go, what's the point of it all? like I got a Salesforce like so what what does this tell me? It doesn't tell me anything. It's organizational. >> It's two dimensional. Two dimensional >> but it's two dimensional. Now all of a sudden I throw AI on it and I say and I'm able to talk to it and I say to you, you know what? Who are my best clients? Not based off AUM but based off client satisfaction and um deposits divided by aum. you know, like, you know, who are really my best clients who refer me the most people and then it could like spit out a list, you know, and then you could make modifications. So, being able to now use data, put them on GPUs, build new data centers, and this is why I'm not worried about that the the spend. See, what most people when they say, "Oh, it's losses forever." Now, Google, Microsoft, Apple, all these companies have so much cash and they make tons of cash and it sits on their balance sheets kind of like what Bergkshire Hathway is doing right now. This provides no value to shareholders. Okay. So having $75 billion in Microsoft's balance sheet that doesn't do anything helps shareholders none. So I'm in the camp you either buy back your stock or you pay dividends or you invest it. So when you invest in a data center you're making a capital investment like into a factory that will not pay off in year one. you are spending a pretty large amount of capital, let's say 10 to 20 billion to build this data center and then your expectation is over the next five to 10 years you would recoup your capital and make a return and it will support your other businesses. Right. >> Right. >> And so when people look at what Open AI is doing and say this is crazy or incestuous or whatever, what they don't understand is that if a open AI doesn't do this, it will not be the leader in AI. And so it is such a competition to see who will divide up the the the wealth of AI creation that if you don't invest now and if you don't go full out like Elon did and like Meta's doing, you you have zero chance of competing against them. >> But this is very Elon. >> Apple just chose to stay out of the game. Apple's like, I'm out. >> What Sam is doing is is very Elon, right? It's it's making these huge huge huge pie in the sky which by the way it doesn't always pay off. Let's be honest and I don't care how it doesn't but they're going out. Open AI just seems to be a little bit on the edge to me from the aspect of it's difficult enough for a company that is established and making earnings over the last 50 years that is well known and with a product that has been tried and true to to forecast more than let's say a year out. These guys are trying to forecast five, eight years out on a new uh technology that is unproven. >> They basically have to get to the next level before this happens and spending an all an awful lot of money on it. Now, I'm all in favor that it's all going to work out great and everybody there's enough of a pie for everybody to share. But >> I mean AI was what I'm going to go out on a limb here, five years, maybe three, but five is really the the totality of the technology of what we're looking at today. Well, that's hard to predict. That's hard to predict because, you know, these GPUs, they'll have better GPUs, but they're so good now. >> I, you know, I don't know what the depreciation lifespan will be for these, but I I suspect that they'll run for some time, even if they're not the most cutting edge chips, you know, five years from now. So, so we get >> but what I think is what you know going back to what you were saying, you know, Sam Alman is cut from the Elon Musk cloth of massive statements about stuff because you can't raise money from Silicon Valley unless you just the hell out of people. And that's the way it works in Silicon Valley. I say this all the time, you know, like private equity guys pitch me all the time like, "Oh, we want to buy part of your company and this and that." And if I tell them the truth, which is we're going to grow 20% a year for the next 10 years, and you can just put it in your formula and figure out what we're worth, you know, it's just not as exciting as if I tell them some fantastical story about how we're going to redo finance like never before and and I need, you know, hund00 million to build the greatest AI financial planner ever. And I could probably raise on a two billion dollar valuation, you know. Yeah. If I made up this fake story about some AI financial adviser that will have all of our combined 30 advisers intelligence put into one. So they know how to do IRAs better than anybody else. [laughter] You know, >> it's true though. >> So that that story I could sell I could raise tons of money, >> right? You're notating. >> There's guys doing it now. There's guys doing it >> literally. And and anybody listening, he's not overstating. This is this is not for me. I'm just I'm I'm good. I'm good. You know, like what I think is that humans are amazing. I think tech people don't give humans enough credit because they're not such great humans. And so when you are around great humans, you realize like this AI stuff is exactly how Star Wars will be. Okay? And I think Star Wars is a wonderful vision of the future. And when you think about how R2-D2 and C-3PO work together in in Star Wars, I think that will be how robotics will look like. and AI in the future where you have a humanoid robot that's super annoying that tells you statistics and you have this weird purpose-filled robot that will actually do stuff that is very useful for you. And I think that it won't look like a human. And so I think what the future brings right now is a completely open field. And anybody who has this claim that they think what seven or eight years in the future is going to be like, it's not going to be like that. and we don't know, right? >> That's the fun and beauty of it. >> When I invested in Apple, I did not know about the iPhone. I didn't know that that could exist. I was pretty happy with the iPod Nano at the time, you know, >> but I think where the risk is is if you remember back in the days, one of my first great stocks was a company called AOL. And it's very much like Open AI, >> very much so. >> Well, because they're the first in. Well, not the first. >> They were the first in. They sent out tons of discs to everybody so that you could have online access. >> People didn't really sign up at first. It was like $25 a month, which was like a lot of money in '94, '95, you know, and like they just and people are like, "What is this strategy? Just send everybody discs in America and like they're just going to sign up for this internet?" Like what is what do I even need this for? Like email, you know? >> What's that? What's that? What's that? >> You got mail, you know? So like my generation, you got mail was like like a big deal, you know, right? >> And and so when I signed up for AOL in '95 or '94, I was like, "This is awesome. I'm going to send somebody an email and there was like nobody to send emails to, you know." >> Mhm. >> And AOL was a revolution. And all of a sudden, you could plug your computer into the wall and it would do stuff, you know, and you could But AOL rallied like crazy until 99. I was fortunate enough to be at the New York Stock Exchange at the top of the market in 1999 when Time Warner purchased AOL. It was the craziest thing I've ever seen. That's why I know bubbles because I was in it, you know. Yeah. >> And so at that point from 99 to today, AOL still exists and I think it was just sold again to some weird company in Europe for some reason, which I don't understand, you know. >> I mean, what does it have? I mean, that was that was with >> AOL's mail and news. That's the app right now cuz I still have my AOL address and I still use AOL and I use AOL and Yahoo because it makes me feel good. >> Oh, well, there you go. You know, it's funny. I read a number of years ago, I read a Harvard Business Review. >> I don't use Instagram. Oh, no. >> You know, it makes me feel bad. [laughter] Um, a number of years ago I read a Harvard Business Review article and it was talking about the second in the second in uh, advantage and it was this discussion of things like AOL or other companies that you could think about that were um, taken over by the second in where for example it was McDonald's and Burger King or you know you look at the different companies that are out there that have that and that could be something because they look at you know for example Lowe's versus Home Depot right the second end was Lowe's and right and you look at that and there's something to be said about like who is going to be that second in that's going to learn whether it's a perplexity whether it's uh you know Google's whether it's going to be XAI I don't know you know which by the way supposedly raised another 15 billion or something >> yeah I was stoked because I own some of that and I think they raised their 200 billion valuation which means I doubled my money >> there you go I'm >> which is interesting because uh the valuations there I think are a little bit nutso >> well if you want to talk about bubbles the private market is where it's at >> yeah You're talking about credit or equity or both? >> Both. >> Like the way my business is so freaking weird sometimes. Like the way See, the whole purpose of private investments was that it wasn't for the public, >> right? And now they're trying to sell private investments to the public, but they're not liquid. And then what happens is you don't have a market. So they'll say, "Oh, we're raising at this at this valuation. We're raising at this at this valuation." But it doesn't mean those companies are worth that. Do you see what I'm saying? >> Oh, I understand. I get >> So, like, so like people are like, I want to get in on Andrill and they're like, all right, well, we're raising money in series F at, you know, you can buy 5% of the company for, you know, 75 billion, you know, so is Open AI worth 500 billion? Like, no way. Right. >> No way. >> Right. Right. >> But it doesn't matter. It doesn't matter because >> that's a funny thing because it doesn't matter because >> because only private investors, you know, which are supposed to be smart and sophisticated investors are are dumb enough to pay that. I guess >> I have clients that have more private equity and and hedge funds and even interval funds that that we have to babysit until we can unwind them, >> right? And you know where you whether it's some of these guys are buying whiskey barrels. >> Yeah. You know, or or they're buying some other who knows what. Last year >> there's so much garbage private stuff. It's it's now see you know because we manage a lot of money and we have a lot of money come in every year. So we're one of the we're call 100% organic. We don't buy firms. People just give us money to invest because we're good, >> you know. So every week we take in let's say 10 to 20 million of new capital. Mhm. >> Okay. And so these people call us like rabid dogs, you know, and so I got every private equity company pretty much calling us like rabid dogs except the huge ones which like don't need anybody because everybody calling them for some reason. Yep. And so so they all call me and and it's all the same, which is access. Like, oh well, we have access to private stock and this and private stock and that. And it's like, but what does that matter if you're paying five times what the company's worth? >> Yeah. Plus a 15% spiff, >> right? Oh, I don't even want to go into all the fee stuff because, you know, we're an RAIA, so we charge 1% or less typically for pretty much all clients unless you're a super small client. And so like, you know, I try to keep my fees all in at 1% or less with the ETFs and whatever. And so it's like, you know, when you think about a hedge fund or a private equity guy coming in and saying, I want two and 20, which works out to be something like four to 5% annually if they're successful, >> it's like I'm like, why would you get paid five times more than me, you know? And then they're like, oh well, we're happy to share some of these fees with you because obviously it's excessive. Not to mention not to mention that they're creating their own valuations on the to get to the 20. >> Yeah, that's what I'm saying. You know what? I can value my company. I can value my company. We're a private company and I and there's like eight formulas I could use. You know what I'm saying? Which formula would I use is the one that gives me the best valuation, right? >> Yeah. I I I get it. >> And by the way, did you see that Schwab purchased a private equity platform? Just what? >> This is what happened. This is what happened. So we you're like, "Oh, we should be doing private equity like because we're Gerber Kawasaki and we want to be able to like do everything that clients want, right?" >> And so so I'm like, "All right, I'll look into it." So first company we talked to Equities End, right? Equity End, good company. I really like these guys. And we talked to Forge, too. But I didn't like Forge because the stock is public and they're losing like tons of money, you know? Like I was like, "This is not a good company." And so of course Schwab pays 600 million for it. Uh-huh. >> And and and then like this equities end we were pretty close to starting to work with, but then it got into like, well, okay, I want to buy something today. Like, what can you actually offer me? And it was like four or five different securities. You see what I'm saying? >> Like total. And so I found one and I was like, "Send me the information on this." And they sent me the information. Um, and I'm looking at this stuff and I'm like, "This these valuations make no sense." Of course, there's no negotiation in any of this. And then, of course, there are different fee structures depending on whether it's an SPV or whether it's a direct purchase or, you know, it's like, and I was like, you know, I've invested in probably 10 private companies in my life, you know, I've I've gotten a good return so far on maybe one of them, you know. >> Well, not only that, you got you have the capital calls, you have all that. It's it's it's a crazy >> Yeah, but like I invested in Tesla and I invested in Bitcoin. I invested in Nvidia too, right? 10 years ago, >> right? >> Okay. And I've without capital calls, without >> without any of this >> with total liquidity and no two and 20. >> And I'm a stock market investor, so that's part of it, too. I'm a trader. So, if the thing doesn't trade, it it doesn't work for me because I take advantage of days when the markets are down to purchase stocks. I take advantage of the markets, you know, and so if you're good at this, which is very hard to be honest, it's very hard for me to do it, too. It's not like I have some special skill other than I have no emotion towards money, you know, which is really one of the key features to being able to invest. >> Mhm. >> Well, is not being emotional about money because you often are losing or gaining lots of money in one day. Like today, I am losing a lot of money. And we're not going to be specific about the days, but other days I'm making lots of money, but you know, it doesn't matter to me. What matters to me the most is doing the best we can for our clients and and that is where I care. Like I want to pick the right stocks and do a great job because a lot of people rely on us and we want to do the best job possible for them and you know not just be a bunch of lemmings buying the S&P and and you know Yeah, I get it. I get it. Listen, I see that all the time. Stuff comes just like you stuff comes through my door. I'm like >> who is creating these portfolios? And by the way, from some of the big companies, right? Some some major names. I'm like what? Why would they create this portfol? You know, you have somebody who is conservative in all equity. You have somebody that's, you know, aggressive and they have this like, you know, weird portfolio of just and, you know, because they got talked into this whole factor or something like that. I want to switch gears. I want to talk about back to the humanoid robots, the idea of R2-D2, C3PO, or we can call down the the the lost in space robot, or we can look at um, you know, Terminator and what's going to happen there, or even, you know, or or even how Wow. You know, >> well, I kind of I kind of think that it's possible that a robot might come back in time and kill Elon, >> you know, like maybe we're living Terminator right now. Oh, >> you know, I see what you mean. >> And like, you know how like the Terminator came back to kill the person that was going to stop the Terminator, >> right? That's going to solve the whole thing. >> Sarah Sarah. Yeah. and and and and and so what I fear is Elon's robot army, you know, like I I don't think this is good. I I don't actually think humanoid robots have much purpose to be honest. I think if I'm building a robot, I would want it to be built specifically for what I want it to do. But to be walking around my house and folding laundry, you know, my kid said, and I thought it was very smart, said, "Why would you spend a trillion dollars? Why would Sam Ultiman spend a trillion dollars to make a robot so it could fold laundry? >> Yeah. >> Like Rosie Rosie from the Jets. >> Yeah. Like like I get it if it would only cost 100k to develop something like that. >> I'm going to spend a trillion dollars. Maybe I want this thing to do more. >> But the whole idea of of humanoid robots, listen, we know that Elon, I know that you have a long history, made a lot of money from Elon. He's quirky. Let's just say that. He's quirky >> and he's a little bit immature >> and um he you know he wants to do these things that somehow seem fun. I mean like you know let's let's play baseball with a humanoid robot. Let's let's you know let's stuff like that. But robots don't necessarily have to be humanoid, right? They could be u no automation machines of some sort and they could be then smart thinking, right? Whether it's like you saw in some movies where um uh uh glass spills from a table and all of a sudden the robot is a little round thing like a like a little rumba is is automatically goes and cleans up the mess, right? Or or or maybe somebody's having a a health issue and all of a sudden there's some device that uh detects it in the house and then utilize whatever. >> Well, they kind of already have that. >> Right. Right. Well, we have some of that. But you know what I'm saying? >> Looking for one of those for my mom. >> You know what I'm talking about. Right. these the or or the Amazon pickers which we have too but that whole thing which creates mini robots or even nanos by the way to solve uh healthy >> yeah but I think like this is where we get into this like fantastical area of thought when when we're looking at the MAGA movement that I think has you know you sort of say are we really advancing as a society are we really moving to the Jetsons or are we kind of haven't gone anywhere because when I was in Orvietto I think those people were way smarter than us. >> Oh yeah. >> Today. >> Yes. >> So if you go back thousands of years, I think they were actually smarter than we are today. And Orvietto is proof of it. >> You know, it's like these people were super smart. How did they build this stuff? How did they get everything up that hill and then I was dumb enough to put in the mapping to to drive through Ovettto. Oh yeah. Okay. So then I got stuck in the middle of the city and I started yelling at my wife, "Why did you just put in the mapping? This is an ancient city. It's not made for cars, you know. So, I'm starting to panic cuz the car doesn't even fit in the road and I don't even know what to do, you know? >> And then I couldn't even turn right cuz it was not wide enough where I would it was telling me to turn. So, I went the wrong way up a street and sure enough it opened up into a parking lot. I was like, "Thank freaking God." >> And by the way, I must have been in that car with you cuz I had I had that exact experience by the way. Exactly. >> I'm sure you did cuz you put into Google, take me to the restaurant in Orviet to the main square. Right. >> That's right. >> And then it tries to kill you. Yeah, >> talk about AI. >> Show me a way through Ovetto that doesn't kill me. That would be great. >> Let's continue with the robot and the whole robo taxi thing. >> So, here's the idea of technology. All technology that has been wildly successful simply makes our lives more efficient and better. It simply does that. Okay, Uber is a perfect example of that. >> Uber when it came out, taking cabs sucked. Horrible. >> It never was a good experience. You call these people, they may or may not show. And when when my my business partner actually showed me Uber the first time, I actually had my own driver. You know, I tell this story a lot. And I used to call this guy and he would pick me up and take me to clubs and wait and then drive me home, okay? Because I didn't want to get a DUI and I'd go out and I was single. And he goes, "Oh, we got Uber. You don't need Alex anymore." Coincidentally, guy's name's Alex. And you don't need Alex anymore. I didn't want my real Alex to get upset. And uh and I and it's like, "You don't need Alex anymore. I can go on my phone. I can order a black car cuz Uber was originally just black cars, you know. And I ordered the they ordered the car on the phone. It came, picked us up, we went out clubbing. It was really fun night actually in hindsight. Um, and then we called the car and it took us home and I was like, "This is amazing technology, you know, like amazing." So when you think about the cell phone for example, like before cell phones, you know, you just didn't communicate, you know, and all of a sudden you got a phone. It was like I could walk around with a phone. I think my first phone was like a Nokia, you know, and and you'd make calls. There was no texting. And then there was the Blackberry era when we came up with this innovation that we could text, you know, >> so like most technologies really make our lives better. And now we finally reached a point where technologies are making our lives worse. And the example of that is social media. So like today, there's no doubt in my mind that Steve Jobs had no intention that young people would be walking around staring at phones all day. That is not what his intention was when he built the iPhone at all. >> He didn't think so at all. He was thinking like, "Wow, this is great. It'll connect to the internet and you can listen to your music >> and make calls." >> You know, >> that was pretty much it. I agree. >> Yeah, that was all. And so today, like the Facebook era and the social media era, you know, is basically just like destroyed the minds of our youth. And they're fine doing this, the technologists, because they've made so much money doing it, you know. Um, but it hasn't added to our lives. And that's where I fear this robot stuff goes. See, having a robot that just walks around and does laundry is not going to improve my life in any way because the person who does it in my house is quite nice and I have no reason to replace them. Okay? There's not an inefficiency here, right? You know, right? >> So, when you think about where are there inefficiencies that can be solved with robotics, there are lots of jobs that are quite dangerous or difficult, you know? And so you're like, "Okay, I put a robot in charge of like cleaning the turbine engines of the plane or something like that, you know, where it's like dangerous or, you know, or unhealthy, you know, like mining jobs are unhealthy >> window cleaning, you know." >> Yeah. Like those dudes that go outside on highrises, that could definitely be something that's a robot. and and humans do this, but you know, you're like, if we could just come up with an easier way to clean windows on highrises, that's a great use of a robot. You see what I'm saying? I get it. It just stick to the window and go up and down all day. And I got this robotic uh kitty litter box and it really just like my cat poops and it does this circle and it gets the the poop into a bag. >> Oh, that's helpful. That's helpful. >> It's wonderful. That's good. >> I've never cleaned crap once. I've had this pet. You don't and you don't need a trillion dollars to to program that. But what about the robo taxi which is the >> again uh I think more than anything I think uh well we don't need robo taxis. Why do we need the robo taxi? What is the whole thing with Elon with the robo? Is it a carrot though? Is the robo taxi a carrot for Tesla? Cuz if somehow it's almost like a trigger for investors >> the the the idea is that we're not going to drive anymore. So, there's somebody at Tesla named Elon Musk and maybe some other people who think people like us are going to stop driving and that these robo taxes will be ubiquitous. They'll be everywhere and you'll just like step out onto the street and a robo taxi will pick you up and it'll take you home. And then you want to leave for work, you step out of your house and a robo taxi will pick you up and take you home. I I'm not really sure about this this vision because it would involve replacing like pretty much every car that exists >> which is good for Tesla which is good for Tesla. >> Well, yes, but when I talked to Elon originally when we actually cared about climate change and I said to him once I said, you know, it was a question actually at one of the events and I said, you know, if Tesla can make X amount of cars, like how many years would it take like if we make as many electric cars as like how many years would it take to replace the vehicle fleet? And it was basically like 20 years, you know. So it takes 20 years to replace the vehicle fleet if you if everybody just bought new cars that were autonomous. So if we had something that actually worked today and you say, "Okay, there's 75 million vehicles sold globally annually, who could get up to 75 million production of autonomous vehicles?" You know, it's just not going to happen. So So people are going to drive regular cars until I die. That's what I think. And I'll be one of them because I love driving. >> But you also I would I would I would I speak for you. You would not be unwilling to get behind the wheel of a quote unquote autonomous driving car and let the car do its thing. But >> I take Whimos all the time. I take Whimo now all the time. I don't like Uber because Uber is a horrible experience like from the the perspective of a robo cabab. So that's the innovation is getting the human out of the car. And most of the humans driving Ubers in LA are not from LA. They're not good drivers. They don't smell good. It It's just not a good The whole time I was thinking the smell. I didn't want to say it. I was think as I'll say you're talking about every time I can spend $180 to go to the airport in an Uber and it smells like crap in a car. Something happened. And I hate to tell the guy this, you know, and I'm like, "Dude, you've been sitting in this car for 73 hours straight and it reeks, you know." >> Yep. From everything. I'm like, >> so what about what about >> when I get in a Whimo, it's like smells like roses. There's no person in there. >> But Whimo could be any car with a Whimo with a >> Whimo tech. That's the big issue. And that was the hope I I thought really from from a Tesla standpoint that they would have the services component that would pay for, you know, they would bring in all sorts of money. And that's why that I think that Elon keeps I see it. He keeps on talking about this and every time he talks about it, the stock goes up even though sales honestly suck at Tesla, >> right? I mean, >> it's worse now than ever, right? But like, >> see, the whole cab thing, too, is I always like had this vision that Tesla would make these amazing electric vehicles that could drive themselves because what I actually really want is when I'm driving to the Dodger game in the World Series, that I can just push a button and it will drive me. >> Yeah. Congratulations, by the way. >> So, thank you. So, if [snorts] I can push a button and my car drives me around completely safe like a Whimo. >> Yeah. That's a huge win for Tesla. >> Huge win. >> So, so the model is we sell you a car and it can drive itself and it's electric and I think you could sell 10 to 20 million of these a year and that was the original goal of Tesla. Okay. But once Elon came out as an extremist, which is what he is kind of, >> it's like, you know, he turned off like pretty much everybody, you know, and then it was like, well, the right-wingers still like him and then he turned those people off. And so when you're like, who actually likes Elon anymore? It's basically like white male tech geeks that love Tesla. That's it. >> Not a big market. >> It's interesting because you said when you originally started talking with Elon back in the day and while you probably bought Tesla as a as a stock, which you made a tremendous amount of money on, I know. >> Remind me of Apple. >> Yeah. Right. But now, I mean, the Ford F-150 Lightning production being cancelled. >> I know. I'm so pissed about it. I'm so pissed because Elon forced these companies to go electric and I care about climate and I think climate solutions is where there's money and so it's like now all these companies are like thank god we don't have to do this anymore and compete with Tesla so we can go back to selling gas guzzlers and making much bigger profits. >> I mean the hybrid the hybrid is not the worst idea for >> no hybrid is a good solution >> for like an F-150 where you're worried about the I mean you can get the torque don't get me wrong but worried about the the longevity of the truck. That's the range anxiety thing. There's a lot of range. I I I just thinking about it gives me anxiety on that, you know. >> Well, you know, it's one problem that I've never had and as much as you worry about it. Now, the new Rivians are 400 miles a charge, so it's farther than a gas car. Um, >> you owners, you own Rivian stock? >> I don't own the stock. >> You see the pay packages came out? >> Yeah. And you know, I don't know what's wrong with all these people, you know, but like R.J. has not done a great job. You know, no offense, I I love Rivian and and so just full disclosure, I I love Rivian. I don't own the stock. I own a car. I own a car which I really like. I think they make wonderful EVs, but I think operationally they're just challenged. I just don't think they have the work ethic and the type of focus like Tesla had to to really get to where they need to be. They just need to be pushed harder and and that's a management issue. So R.J.'s is a great marketer and he's built a great brand, but I I just don't I just don't see the like when you go to Tesla like I I was reading about like the Tesla meeting all hands meeting they just had where Elon's now basically saying 2026 is going to be the hardest year of your life because if we don't achieve all these things we're going to be in trouble and I was like I was like as much as I hate the fact that Tesla's in this like really tough situation I'm like I love the work ethic. >> Yeah, sure. >> I love it. sleeping on the floor. >> Elon will die. He'll die trying. That's why I don't bet against these people. You know what I mean? And so, you know, I still own $90 million worth of Tesla stock somehow. And, you know, people say, "Well, you don't like Elon. You don't like what they're doing in their direction." I said, "I'm not saying they're going to fail, though. I don't know." >> Yeah. >> I don't know. But I'm not betting against them for sure. But what I do know is that I'm not going to give up driving. My kids will drive, but they probably don't care as much as adults. I I don't think Tesla's technology in its current hardware setup is good enough to compete with Whimo. Whimo completed a million robo taxi rides last month in California. This is impressive. They're everywhere where I go now. I think they're the first mover and because it's Google, I think they dominate. I >> I think and they have the best >> messing around has cost them, >> right? Oh yeah, they got plenty of money, right? It it it's and there's a reason for Whimo to exist beyond taking rides because Google understands they've got you captive in the car and they're an ad model and so when you're driving for your 30 minutes in the Whimo soon it'll be things like do you want to watch ads and your ride will be cheaper, >> right? >> Stuff like that. >> Yeah. >> Okay. So it's we're getting to a point where Google can really monetize the cab in a different way than Tesla, >> right? >> And and so that's to their advantage. Tesla selling cars that drove themselves is a better business than being a a a cyber cab. The other thing with the cab business that's tough is they kind of assume that because there's no driver that the making money part would be equal to what the driver would make. So, if you're a full-time Uber driver, let's say you made $65,000 last year. So, their assumption is like, well, then if I'm a full-time robo cab, then I'll just make $65,000 profit because I don't have a driver. But it doesn't quite work that way. >> And one of the reasons is is because, you know, like there's certain times that drivers make more money than others and the drivers learn when they want to drive depending on demand. And so when there's a concert that lets go and and there surge pricing, drivers make a lot more money than in the middle of the day when there's no demand. You see what I'm saying? So the way Uber works and the big challenge that they had early on in their existence, if you remember, was surge pricing on New Year's Eve. >> Oh, I remember. I remember. >> Okay. And so you go out to your party on an Uber for $28 and then you try to leave, you know, at one and it was like $128 and people would freak out, you know, but that was just like the supply and demand dynamics that they hadn't smoothed out. >> Over time, they got enough drivers that drivers just come on on Saturday night that want to deal with drunk people who drive across town because they make more money doing that, you know, and drivers come off. So the idea that we're gonna have just like millions of these cabs just like kind of just waiting around for rides all day long doesn't sound like margins going up. It sounds like margins going down. >> And that's what my perception of what will happen with cab in 5 years the cabs will be free basically. >> Wow. >> And and you'll have to you'll you'll have to watch ads you know you'll watch YouTube. Oh god, no. Not don't don't talk about that, dude. But a giant >> That's not us. This is what the kids do. The kids are perfectly fine trading their their brain cells for free. Yeah, I see it. Hey, listen. I want to just quickly finish up on something. First, I want to say something, Ross. I really enjoy talking to you. Seriously. Thanks. I I have guest I I have I have so many guests. I've had 950 shows on this particular podcast. I have >> Wow. >> I have so many guests I've had over the years. And and and you are a treasure. I really appreciate that. >> Oh, thanks. I I really appreciate that. That's why I like doing your show because I enjoy talking to you. >> So, let's talk about the massive energy need for >> Oh, I I'm investing in this >> these data centers. And I and I actually have a few investments we made on companies that I usually would not invest in. I'm like, okay, at the beginning of the year, like for example, full disclosure, SMR, Oaklo, CEG, you know, these companies have made me >> be careful with nuclear. >> No, clearly, but I I'm out of them primarily. I just I just hit them a little bit recently this week again, but we made like 600% on these things. So, I'm I'm clean I'm clean on on those profits. Let's talk about that. Where are we going? >> So, so this is actually the part now you're getting into what I'm actually working on. So, we look at AI like any other gold rush where it's like the most obvious place you think to make money is usually not >> open AI, you know, Microsoft. Not that I I think Microsoft will do fine, but I'm just saying where is the real money to be made. And one of the things that I learned when the Palisades burned down was I started watching infrastructure being rebuilt. And the first thing they started working on power. They're still working on power. And I I started hanging out with these power guys, right? Because they're outside of my house every day. And they're boy, these guys are like it's a such a specialized skill, okay? like putting in power transmission lines and all this kind of stuff. It's not like you could just like go to school and do this and be good at it. It's you're climbing poles, you're dealing with high-owered wires. It's a skill that you learn through working on the job. It's it's a union job. And the way the cities do this is they outsource to companies. So, it's not like this like we do have the Department of Water and Power here in LA, which is unique, but most power companies are privately owned or they outsource power uh services like uh transmission lines and fixing stuff. And one of the things I learned first hanging out with the power guys was that our infrastructure is pathetically old. The power that they were taking out of the Palisades, many of the poles were over 80 years old. They literally My neighborhood is is was built 80 years ago. I I think it was in the 50s and 40s and it's the same polls. Okay, so it gives you an idea how aging the infrastructure is in the United States for power. Now I started studying this many years ago with electric cars because what I was concerned about was power in the same reason like if everybody had an electric car, do we have enough power to do this? And if the price of power goes up substantially then that defeats the purpose, right? >> Yeah. And then we have these clean energy sources like solar and nuclear. And so you've got [clears throat] many issues here to address. First, I'm building a big data center, let's say, in Arizona. I think OpenAI said they're going to build a trillion dollar data center in Arizona. So you're talking about this massive footprint of things. Now, if you've ever gone into a small data room in an office, for example, let's say it's a one room with a bunch of servers, it's hot as hell and you got to run air conditioning through this stuff and you got like a thousand wires, you know, plug in all the server stuff. You got to hire all these people who manage it too, you know. So, running these things is complicated, expensive, and use a lot of power and a lot of humans, right? >> Yeah. >> And so, we started looking at this and where I was like, "Oh my god, this is the opportunity." And it started with GE Verona for us which we made a nice return off >> symbol GEV. >> Yeah. And then you know I stay away from so my >> but they also they got a big pick because of nuclear too. G Verona >> right. But see my stepfather's the one of the leading nuclear scientists in the world. So if there's anything nuclear related I know more I I can learn more about this than anybody else. And he like works with the department of uh he he's retired now but department of energy. He's very close with everybody in the nuclear power industry and he's literally the dude who like it builds nuclear power plants and he he has a very simple answer. There will be no nuclear power coming online for 7 to 10 years. It takes that long between regulation, building, safety and then you got all the nimbies who go crazy when you try to build anything nuclear near them. Okay, so nuclear power is not a short-term solution for AI. >> So keep that in mind. Okay, it's a long-term solution and one that we should address. And the government needs to subsidize nuclear because it has very low returns for investors. And so now the Trump administration announced that they're going to be supporting uh nuclear power, which is a great positive step, but there will not be any nuclear coming online anytime soon. Okay, look at it that way. >> Okay, >> on the other side of the coin, we have natural gas, we have solar, we have other forms of energy. The best form of energy is from the sun and it's solar power. So we have the ability to scale, you know, power generation pretty well if we want to using traditional methods, but we also need transmission and we need infrastructure and we need the ability to, you know, >> to capture it, >> scale scale this up, right? You know, >> and it's just a huge investment like it's so much work like physical work building a data center, you know what I mean? And all the power around it. So we just bought stock in a company Quanta Services PWR and and Quanta Services um really does all that you know the the servicing the transmission lines the it's really a bricks and mortar play on AI >> is that is that specific to solar or is that specific to >> No it's specific to all the different types of energy generation they do more the like servicing like connecting it making sure the wires work you know like the whole bit generation of the power. >> Is it like a baker used for the oil industry? >> Kind of. Yeah. Yeah. Yeah. So, >> so they do all the hard work. Now, it's not a high margin business because it's labor intensive, but it's you can't do anything without these people, right? Okay. Right. >> You just can't. So, we're looking at a couple other companies now in this area as well, which I'm not going to talk about because we haven't done anything yet with them. Um but like essentially this infrastructure is really the play is it you know and and infrastructure in the United States is terrible terrible. I mean in the city of Los Angeles for example you know cuz I work I'm working trying to get rid of the communists running our city and you know so we got one city council person in who's wonderful Tracy Park who's who's wonderful in West LA. Um, and you know, and we had a meeting and she was just like, you know, the infrastructure in LA is so bad and antiquated. Everybody's upset about the fire. They don't want to know that 40% of the fire departments in LA are just unusable right now. The trucks don't work. You know, like infrastructure just is so old in our country in so many places and it needs to be invested in. And part of that is the government and part of that is the private sector. And so we're going nowhere without power. >> No, clearly. No, there's no question about that. >> We're going nowhere. It doesn't matter how much we talk about AI. They got Satia said it the other day. Satia Nadella from Microsoft said, "I got chips. I got a building, but I don't got power. So, we can't scale any faster than we're scaling until we have power." You know, >> right? >> And and boy, you know, this is not something you do in a day. So, you know, if you're talking from scratch, I'm building a solar battery system, transmission lines into a new data center. This is a massive investment. And that's what's happening right now. So the good news is these are investments all in the United States. They create lots of jobs. It's very labor and skill inensive. And if you're a young person and you don't want to go to college, you could get a great job in the power industry. There's just no question. >> So So that I think is one of the most interesting and important and crucial investments you can make as an investor. in my fund GK right now. We we we have two of these and we just had a stock Amphanol which does all the wires in the data center. We've owned a stock called Train Technologies which does air conditioning systems which I originally bought because they do heat pumps for um for climate change and and now it turns out you know we need all these air conditioning things on data centers too you know so train is in a great position with global warming and the huge demand for air air conditioning just in general because most of Europe doesn't actually have air conditioning and then and then of course um now this data center demand is just wonderful for cooling uh products and such. So, Train is in a wonderful position as a company as well, which also has exposure to that. So, we're continuing to build out what I call the the bricks and mortar of AI because I think that's in a lot of ways more interesting than the AI plays themselves, >> right? Because because either way those could win. They win because of every see I posted this the other day for from 1875 to 19 let's say to 2000 or to when the internet was created let's say 1875 to 1995 let's say >> right >> oil the industrial era right >> factories roads trucking you know this is how we built America you know and America is this wonderful story the railroads the the the the communication, the telegraph that was laid next to the railroads, the communication. And when you look at infrastructure is what America made America wealthy. We weren't a rich nation. We were a bunch of farmers until we had railroads. And once we could trade and move goods and communicate, all of a sudden that infrastructure made America extremely powerful and wealthy. Okay? because all of a sudden consumers all around not just the United States but even globally could have access to our food for example our cattle so shipping cattle from Chicago to New York right so now you go from 1995 to the president's all been about the internet which runs on electricity so we've moved from an oilbased power system around cars and trucks and oil and factories to now an electricalbased system that ideally cars and trucks and factories and everything will work on electricalbased systems out. Okay. And the problem is is none of that infrastructure, the railroads, the telegraphs, that it hasn't really been built or what >> or what we want it to become. You see what I'm saying? So for this vision to be actualized in the next 20 years, which is our lifetime, infrastructure is going to be the absolute key to the success of it, more so than the innovation itself. >> Yeah. Amazing. Ross Gerber from Gerber Kawasaki. We'll have the information on how to get in touch with you over on the show notes for episode number 947. You can find them on Twitter. You can find them everywhere that social media is. Um, and I really appreciate you coming on board today as always, giving us a just an incredible depth of information on all sorts of topics. Thanks so much. >> No, no, I appreciate it. Now, now I want to go buy some more power stocks. >> There you go. Go get them. >> I convinced myself. [laughter] >> I'll see you soon. Thanks. >> Yeah. Take care, Andrew. >> Great. How great how great is that discussion with Ross? I mean, we have a great synergy there. We should probably do a show like more regularly. I think I'll have to talk about that. Anyway, uh things are uh interesting to say the least of what's going on right now in the markets. I think you make some very good points with regard to, you know, we're not necessarily in a bubble, but we're in a valuation question mark and there is great opportunity to be had right now. now and then it's going to be winners and losers like we've seen, but yet at the same time there's a lot of money to be made, a lot of money be spread around. So, we'll keep a watch on that for you as well. As I mentioned, go over to the disciplined investor. You can see the show notes, everything. And by the way, we have some AI generated show notes if you want to read it and catalog it on the episode show notes page. So, that's over on the disciplinedinvestor.com. I want to thank you for joining me this week and every week. A shout out to all of our great clients. Thank you for all that uh you've done you do and thank you for believing in us, trusting us with your hard-earned capital, your life savings. We hope that many more of you will come on board over the next uh times, [music] the weeks, the months, the years that we're here. Plenty more to go of the disciplined investor. Stay disciplined, stay investing. Uh keep your head up and watch for the opportunities. Thanks for joining me this week. I'll see you again real soon. This podcast is intended forformational [music] purposes only and does not constitute personalized investment advice. Investing involves risk including the possible loss of principle and past [music] performance is not indicative of future results. The views and opinions expressed are those of the host and any guess and may not necessarily reflect those of Horowits & Company Inc. an investment adviser registered with the US Securities and Exchange Commission. Registration with the SEC does not imply a certain level of training or skill. 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TDI Podcast: R2D2 – The Truth About AI (#947)
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This episode is sponsored by Interactive Brokers. So, are you looking to trade gold, maybe silver, platinum, palladium? With lowc cost and global access? With Interactive Brokers, you can trade spot metals, futures, and options on major exchanges, all from one powerful platform. Get efficient pricing, deep liquidity, and institutional grade tools right at your fingertips. Whether you're hedging, investing, or even diversifying, Interactive Brokers puts the world of metals in your hands, Interactive Brokers, a member of SIPC. Futures of course are not suitable for all investors. And US gold trading is available only to legal residents of the United States, excluding residents of Arizona, Montana, New Hampshire, Rhode Island. Interactive Brokers, the best informed investors. Choose them. Get ready. Get set. Visit interactivebrokers.com/metals and start trading smarter. >> The disciplined [music] investor is all about you, your money, and the markets. Sit back and get ready [music] for this edition of the disciplined investor podcast. This [music] episode of The Disciplined Investor is sponsored by Horowits & Company. If [music] you're looking for a portfolio manager, look no further. Horowits & Company. From seed through harvest, [music] cultivating financial success. [music] >> The government's back open. Ah, is that a good thing? October's eco data may be lost forever. Investors questioning values. We got the poster child in peril. And our guest today is Ross Gerber from Gerber Kawasaki Wealth. All this and much more on episode number 947 of the Discipline Investor podcast [music] [music] waits are not simply recovering A rotation that is not benefiting tech. How could that be? Come on. What are they talking about? Yeah, we're gonna get into this and a lot more today as the emperor's got some new clothes, doesn't he? Andrew Horowitz here and yes, risk assets are out of favor for the moment. I mean look at tech, crypto and the mess that has been created by the very I would say what aggressive super aggressive and reckless promises for companies like from companies like what open AI Sam Alman what he does the poster child of what is going on these days is clearly in my opinion Oracle and we've talked about this a lot the idea that that we have big concerns over the notion of what's going on with the allocation of capital visav things like circular financing, vendor financing and again I'll say it again the word reckless promises about future opportunities from companies like open AI that are basically spending money they don't have and they may not ever have and all of us going along with like hey yeah that's a good idea when in fact we know better. We know that the open as of open ais of the world that are promising what $1.4 4 trillion dollar of spend over the next number of years may or may not be able to do so. But yet the hope is alive. And we've talked about these concerns about this. But again, the one stock I think that is representative of this valuation concern for us is Oracle. And by the way, we are owners of the stock. Love the company. Love what they do. Love the opportunity. But remember things got twisted sideways and a bit haywire when they came out with the earnings last month. And at the same time, Open AI promised hundreds of billions of dollars that was going to be spent on cloud etc. utilizing the open the uh Oracle platform and the stock went vertical. It happened in a flash. went from 240 on the great numbers that they showed to 330. You know, we're talking about a $100 like, you know, close to 40% 38% of an increase in the stock on the promise from OpenAI. And you know, you can't discount what is going on there. can't say that investors were stupid because they got direct and uh very clear signals from everybody involved that this is something that's going to happen. But now where are we? Reality is striking. There is a bit of the emperor's new clothes that is coming out and we saw a bit of a turnaround in many of these tech names. where two what 1617 is the price now from 240 330 back underneath the the price that was actually the day before earnings and the good news was announced. So what is what does this actually if you stop for a second and think about it what does this teach us? I think we have to go back to what we know is that hype can really get things going, but it's difficult to sustain. And we all want to believe, we all want to put our money there. We get greedy. All of us do. But you have to be smart about it. The margin levels that we talked about over the last few weeks that we saw at all-time highs told the story. the fact that we saw companies ballooning their stock price on promises that were thinly veiled, questioning nothing more than, oh, okay, uh, how much higher can it go? Not where are they going to get their money from to do this? I'm sure we're going to get into this whole discussion with our guest today. So, I'm not going to get too deep into the weeds of this, but um this is the reason we actually clipped some profits over the past month. And we've been doing this a long ter time and and um I got to tell you something. I I've been doing this a long time. We haven't been clipping our profits for the long time. Over over time, we have, but I've been doing this a long time. And when things go vertical, it's usually time to reassess. markets can continue on much longer than we anticipate and we know that bull markets can be sustained for a really long time whereas bare markets usually are short. It's just what it is. The optimism is always there. When things are great, I want to buy. When things are down, I want to buy. So, we have to look at this as where are we in the cycle right now? And I think this cycle has got pretty long in the tooth. But that rotation that we saw clearly benefiting things like healthcare, valueoriented stocks, staples, utilities, that was something to behold. The people don't want to pull their money out of the market. What they want to do is just move it. So the bullish intent, the opportunity that is there, the optimism that is held is still pretty strong. Now, with the government back open, by the way, and congratulations. I think we have a key for that somewhere here, right? No, that's not it. There we are. There we are. Congratulations, fellas, for a job well done opening up the government after 40ome days. But what does this mean? Well, we possibly going to revisit this in in uh what is it? January. In January, we're going to get back to that. seems that we're going to start getting a flow of eco numbers. Uh to a degree, we're not going to see much of October, possibly ever. By the way, the the comments out of this administration has been that it it is possible that we will never see October numbers, which really is a problem. It it screws up charts. It screws up trends. It screws up analysis. I don't really understand why it has to be this way, but that's what it is. We have heard from many officials say that the shutdown could cost as much as 2% off of lap right off the top of GDP which will smooth out a bit probably in the following quarter as money comes back people get paid. Hopefully it's not going to interfere too much in the retail experience during what is about to be in a couple of weeks Black Friday and the holiday season. But the biggest issue right now, aside from the things we're talking about, and why markets I think are a little bit squirly, [snorts] is because Fed officials are still talking a bit uh hawkish. And there's a real concern that there's not going to be a gift in the stocking this Christmas of a Fed cut. There's going to be a lump of coal, no cuts in December, which I agree with. I don't want you to get coal, but uh I agree with that. probably at this point without the data as opposed to Steven Moran who says, "Oh yeah, we need to cut another half a percent without the data. How are you doing this information? How are you doing this analysis without the data?" And right now it seems more logical, healthy, and appropriate to wait it out a little bit. Let's see what's going to happen. Let's spend our time thinking about what we do know about and we do see here. There's no rush to cut in December. Make it the next meeting afterwards if it needs to be. Not going to hurt the economy too much. All right, with that, let's get going with this week's guest, and that is uh Ross Gerber. I am very excited to have him back. I always enjoy our conversations. He is the co-founder, president, and CEO of Gerber Kawasaki. wealth and investment management. He oversees the um GK's corporate and investment management operations as well as serves individual clients. He's become one of the most followed investors on social and traditional media. He's been on CNBC and Fox News and Bloomberg Reuters. He's a contributing writer for Forbes. He's been ranked as one of the most influential investment adviserss and fintech innovators in America. They have billions of dollars under management. So, let's get to that discussion. I think it's going to be pretty interesting. So, Ross Gerber, how are you? >> I'm good. How are you? >> I'm doing great. Uh, good to see you. Good to hear you. It's been a little bit of a while. I always enjoy speaking with you and watching you. You are very much out there talking about all the latest and greatest things. I think one of the things I saw you recently talking about was that about a year ago, year and a half ago, you started teaching your kids how to use AI and they were Yeah. >> They were they were like, "No, I can't do that." And you're like, "Yes, you can. Well, no. It wasn't that they said no. It was that their teachers told them that it was like cheating if they used AI. And I said, 'Well, how much do your teachers make, >> you know? >> Yeah. >> It was like, not a lot. Well, there's a reason for that. It's because they're threatened by the things that might actually be wonderful for education, actually. And so I immediately taught my kids how to use AI, not to cheat, not to write for them, but to help them learn because AI is a wonderful tutor. It's just a wonderful tutor, especially in things like algebra, which if you're like me and you haven't done algebra for like 40 years >> and then your kids like, "I thought you were smart at math, Dad. Do this problem." And I'm like, "All right, let me dig deep into the burrows of my brain and try to remember how to do that. And then I put it into chat and it just step by step explains how to do every problem. And I'm like, damn, if I was a tutor, I would be worried because this is way better than the teachers and the tutors. >> So, did you um have have have you done any like long division like like hardcore long div not not you know I'm talking about the long division that's like difficult? I I somebody recently was I'm like what is that? How do you even do that anymore? >> [laughter] >> Well, you know, I think a lot of school when you think about it in hindsight is really to like learn how to sort of deal with a lot of things whether you actually use them in real life for the rest of your life. You know, I would say most of it you don't, right? >> But like you think about how important it is to do math, you know, like to know just basic math that you use every day, right? M >> whether it's, you know, tipping somebody or this or that. A lot of people can't figure out 20% on a tip, you know. And so there's that. And then you get into the sort of like algebraic equations. And then you get into calculus where my kids are kind of like, well, what do you use this for, Dad? And I go, nothing really. You know, like mo most of what I do is financial. So it's really just like accounting, you know. >> But it's like anything else. You have to have a base knowledge in something. Like if you have a base knowledge in how a car works, at least you have an idea of that. you know if you have a base knowledge of uh if I started only using Excel I don't think I'd have uh the core understanding of how to un you know to to understand the calculations that went into something >> right so this is the whole thing that everybody fears is like that our brains turn to mush because AI brains will just like do everything for us and then we're like not capable of doing simple math or figuring out where things are um or even knowing how to be happy anymore because computers will just do everything for us and and and I That's what I try really hard with my kids is like, "No, put that down." Like, "Learn how to like do stuff." You know, one of the nice things about living in a area that's burned down is that you see a lot of construction. >> By the way, that's not something you hear very often. >> What's nice actually lives in an area burned down except for me. You know, there's like I don't know, what do I got? couple maybe 25 neighbors, you know, that as we're we're on the border, you know, like I I fought the fire and saved my house and in the part of the Palisades where we live, there was a small group of us and and then ultimately saved by the firefighters, but our neighborhood's fairly normal other than two blocks away is the biggest disaster zone I've ever seen. And now it's being rebuilt. And when you see construction, it gives me hope that humans will have plenty of jobs for a long time because I think these humanoid robots, it's going to take a long time for them to be as good to do roofing and things like that. >> Yeah. Let's go to the let's go to the core of this. Let's talk about uh one of the things I know I'll tell everybody else that hasn't maybe heard you before, which is probably only a few people, but um Ross is always on the cutting edge and coming at at looking at these areas particularly in technology. Um, and I want to talk about um, this AI thing that we're talking about here and the notion of what AI is and what it isn't, >> right? I think that's an important distinction that I think people don't really understand. This there's this AI that people think is much more like smart computing. Uh, you know, that and then this AI that is that next level, right? That that kind of uh, thinking >> they call it like AGI like it's smarter than humans. It knows everything. So, where are we? What is the difference? >> Where we at right now is that AGI, you know, AI is still pretty dumb. Actually, if you ask it, what are the best paintings for me to see when I go to the UI Gallery in Florence, it'll give you a good list of stuff that you want to see. But when you say, "Explain to me this specific painting and the story behind it," it doesn't know. And so, the tour guide knows. And so the humans are still vastly more intelligent on specifics than what AI is. And so AI is really good at certain things like languages. It's really good at math. It's really good at analysis of documents or pictures, but it's not actually that intelligent yet. And most of what AI is doing right now is just what I call advanced search where it's like looking at the documents you're requesting and then summarizing them for you and giving you the best parts of that information. And so it's highly efficient right now, but I wouldn't call it super intelligent. I mean, I like it for I love it, by the way. love it for help on minor rewrites, grammar, >> things, just things like that where you take an email and say, "Can you just clean this up for me?" And you get it back and it looks almost the same, but you realize, "Wait, wait, you know what? That was reversed and that looks that that sequence of that sentence is a lot cleaner and looks better." >> It's great for presentation formats, you know, like can you put this into a PowerPoint or like it now knows like when I'm doing I hate Excel like the formulas and stuff and now it [clears throat] like knows that you want to keep doing that formula. you don't have to keep putting it in, you know, things like that. >> Um, so those intuitive things are great, but what you're saying, like for me, like I write a decent amount, you know, and I, it used to really bother me because nobody in the company could edit that good, you know, and I was like, do I have to hire somebody just to like edit documents? And then, you know, you go through this process of this back and forth with documents until you're basically happy with it and then like somebody points out something you made a mistake on. You're like, "Shit, I almost got it right." You know, but I write, let's say, a fund report for the quarter for the GK fund, let's say. And so the way I do it now versus the way I used to do it is I basically um I dictate it into my phone >> and then I put it into chat and I say write this for me in a investor letter format you know and it does it and it's great and if I don't like some of the things I do I just edit it but like >> it's a 15 or 20 minute process that used to be like hours you know. >> Yeah. You know, it's funny. I have um back in during COVID, I did a Monday, it was maybe Monday and Wednesday, but I it was at least a Monday webinar that I invited everybody to come to that wanted to sit there and panic with me about all the stuff going on during co I mean straight up right from the beginning of it, right? You know, what was going on and I what I would do is I would take a pad like one of those yellow pads uh and I would write each day what I'm going to talk about. >> I have that entire I don't know is that 70 80 page pad 100 page pad I guess. I have that 100page pad filled up. I was thinking about taking that, scanning it, >> putting it into um uh you know, one of the one of the AIs and say, >> "Write this in a story for me or something of that nature, right?" You know, kind of like give the give this >> Yeah. Like tell the story of all these notes, >> right? Yeah. I don't know. Maybe something I'll do, but that's the kind of thing it's good at. >> No, it would be great at that. >> Yeah. And and I've thought about that too, you know, because like I saw a customer service thing that was basically chat, but it was like geared toward towards the company. So it was like ask me whatever you want to know about like using my company, but it like was AI. And I was like, dude, this is awesome. I've got to do this where we like feed in everything about like Gerber Kawasaki into AI. And then when people come to the website and they have questions, they can just ask AI about the company and it'll answer it because it will know, you know, and like all of a sudden you've you've like created a customer service function for your business, no matter how big or small your business is that could be extremely effective compared to the current system of like sending a message to some customer service rep. You know, customer service reps are in trouble. I would I would say that. Well, I would also say and go back to your conversation about how like tour guys. I was in a town um outside of Multipiano, Italy just I don't know a month and a half ago. It was called Orvietto and I was standing >> Oh, I love that town. >> Great town, right? I was standing in front of the >> You talk about the one on the hill. >> Yes. Yes. Yes. >> Oh my god, that town is so cool. It's >> It's like the only place that was never conquered because it was like >> so well built. >> Yep. any that beautiful church with the dome and all that and >> Yeah, it was the church with the Jewish stars in front of it. >> Exactly. So, I went in front of it though. I'm standing there and going, "What am I looking at?" Gosh, I said I literally said this, "I wish I had a tour guide with me right now." And then I'm like, you know, I have an idea. So, I went in, I turned on my AI and I started saying, "Hey, what am I looking at right now? What is this? What is this? What is this?" It gave me a pretty good discussion uh about what I was looking at. Right? And people, >> that's what I would do, too. >> The people I was with >> had no idea how this was going. There was this product available, right? And they're like, "What is that? What are you doing?" I'm like, "What do you mean what do I do?" It's co-pilot from Microsoft. It's just a nice easy app that just, you know, gives me all this stuff. And they were like the whole time freaking out. Let me ask this. Let me ask that. It's fascinating the amount of things that can be done today. We talk about some of the small items, right? Whether it's the formulas, the uh teaching a little bit, the uh the rewrites, um the brainstorming, the organization. companies are spending an awful lot of money on what they hope it to be one day, right? Where we have the ability for it to I don't want to bring up the Terminator kind of thing, but think, right? You know, I want they want it it it to think and and then therefore it can do other things, right? Okay. >> So, there's a big question about what's going on right now. Is it in a bubble? What's going on? Um, we've seen some rockiness in a lot of names after I've been I'll be honest, there is one particular thing I've been talking about that's concerning me. It's the vendor financing circular financing the issues particularly with open AI particularly with open AI and I'm like wait what what you know you're promising you know $1.4 four trillion dollars on losses over those years and and all these companies are making you know are basically banking on this or or you have like a Microsoft that is paying big money like let's I'm going to use a number just a stupid number a million dollars to a company XYZ and then they turn around and utilize that to pay back Microsoft for a 5-year contract on Azour right and basically >> or Soft Bank selling six billion in Nvidia stock to buy open AI stock which will buy Nvidia chips >> right So you basically in a way companies are taking money off their balance sheet and putting it onto their income statement, right? That's what they're doing to to to boost up their profits. You have Open AI making these promises like Oracle. Oracle for example, you saw what happened there. We actually uh full disclosure own Oracle. Had that great pop after earnings and then it's just basically deflated from there back down to >> Yeah. But it's up 100% in the last year. >> I got that. I'm just talking about from that one announcement. I'm just talking about the announcement. >> So with all that, >> you want a smooth You want a smooth stock market? >> I do. What do you mean? Straight up. There's no doubts of course. >> How long have you been doing this? It doesn't work that way. >> Hold that thought for a second. We're going to come right back to that. Uh I want to talk about Interactive Brokers for a second. I I don't want you to be fooled by what you see out there. These zero commissions that you see all over the place on crypto trades because some brokers add a spread to the price you pay. But at Interactive Brokers, there are no hidden fees and you'll pay much less than you would a place like Gemini, Robin Hood, or Fidelity. Keep more in your pocket and trade crypto for less coin at Interactive Brokers. Trading cryptocurrencies involves risk and is only for individuals with a high risk tolerance and the financial ability to sustain losses. Compare other brokers fees and see how much you can save at ibkr.com/crypto. Now, getting back to Ross Garber, we're talking about bubbles and we're talking about the valuations and I guess I guess the question is, you know, Ross, is are we in a is it a bubble? Is it a bubble? >> Definitely not in a bubble. We're not in a bubble for many reasons. I' I've been in bubbles. Fortunately for me, I was in two of the biggest bubbles ever, and I'm sure you were too with the real estate crash, which um you know, fortunately during the real estate period of time, I wasn't in real estate much, but whatever real estate I had at that time, I lost 100%. Let's say, and during the com crash, which was extremely painful. Um I had also made a fortune in the previous five years. You know, the S&P was up 20% a year from 95 to 2000 before the market peaked and then went down about 50 to 60%. So, if you go back into the bubbleish eras of those times, when there's a bubble, >> the feeling is manic, like everybody is making money doing this. Why are you not doing this? That literally nobody questions the bubble. What they question is why you're not doing this. You see what I'm saying? >> Yeah. Why are you saying when you got a whole bunch of people every day going, "Are we in a bubble? Are we in a bubble?" You know, for sure we're not in a bubble because you're only in a bubble when nobody's questioning it, >> right? What a big I understand that, right? That >> and then somebody like me who's like trying to be rational who manages billions of dollars is trying to be rational. It's like Palunteer stock, you know? >> And you're like trying to be rational. It's like explain this valuation. There's no explanation for it. So, yes. Is Palanteer in a bubble? Yeah. I mean, there's a couple stocks that are absurd. Tesla, you know, maybe is a little overpriced, you know, but it's like when you look at the market, when you look at Microsoft and Google and Meta, Meta is like 20 times earnings. I mean, come on. What bubble are they in? >> It's kind of interesting though that that that you get you get to the point that things are if if you don't want to use >> So, Microsoft's PE was twice as high during.com than it is today. >> Correct. That's Microsoft. You look at Palant. Yeah. No, I get that. Um, you know, you look at you look at um what happened with Michael Bur. Did you see that last week >> he uh put out a letter to his CL they he closed shop? He closed shop by the way. Fascinating. >> Closed shop today. >> Closed shop like done. >> I mean it's not really a shop. Okay. It's 150 million, you know. >> I know. But still he closed. He didn't have to close >> like three clients. >> But he could he didn't have to close. I don't know if he was making a statement. He's gonna >> No, I think that his AUM, you know, you have to have at least 100 million in AUM to file a shop and he was at 150 million and he short a bunch of stuff and and and you know, quite frankly, I I think he just doesn't want the scrutiny. >> Yeah, I would agree with that part. I I I think so. And he just gave up and threw his hands up and and all but kind of fascinating. Um some of the stuff >> see this bet this betting business is a tough business. >> You mean talk about options and all that? >> Well, yeah. and just this idea like I'm going to like bet that Palunteer is going to fall to $50 in the next two years, which is what he's betting. And he bet 10 million, let's say, on this bet. >> And I'm going, you know, >> he doesn't even make money until it gets to $50. And I'm like, you know, when you're doing these kinds of things, it it seems to me that you're not good at just buying Google and being happy with that, >> right? You know, like I always figured if I can make 10 to 20% a year over the long term, consistently over long periods of time, you make millions and millions of dollars, which turns out to be true. Buffett, probably the king of all time, made, let's say, 20% a year over the last 40 years. I mean, he's made fortunes. So, you don't have to go out and make 100x your money and be the big short guy, you know? Well, he was lucky the first time that it all paid off for him. He should just be happy. You know what I And there's a lot of people that did the same thing he did. They didn't have the financial wherewithal to stick it out as long or the uh the >> the coonus. Yeah. Yeah. Yeah. And they just got out and got killed and he just stayed in. That was great. So, who knows if he's going to be right by the way. >> But it's a horrible way to make money. It's like a really hard way to make money versus buying Google and just like sitting on it for the next 20 years. And and you know, since we brought up Microsoft, if you bought Microsoft at the high in 1995 and you held it to today, how do you think you did? >> You did very well. >> You know, you bought it in 99 at the absolute high. >> Very well. >> You know, how did you do? You know, and so like the truth of the matter is Microsoft's been wildly successful. Valuations have changed over time, but what we're beginning on with AI is what I call useful computing. See, what most people don't understand is most of the data we've gathered over the last decade and we put it onto these server farms on AWS and we've we have these great, you know, uh, abilities to buy things and get them right away or to entertain ourselves endlessly on video games or whatever. This has been a wonderful era of growth of the sort of cloud-based computing system. But what happened was you look at all this data and you go, what's the point of it all? like I got a Salesforce like so what what does this tell me? It doesn't tell me anything. It's organizational. >> It's two dimensional. Two dimensional >> but it's two dimensional. Now all of a sudden I throw AI on it and I say and I'm able to talk to it and I say to you, you know what? Who are my best clients? Not based off AUM but based off client satisfaction and um deposits divided by aum. you know, like, you know, who are really my best clients who refer me the most people and then it could like spit out a list, you know, and then you could make modifications. So, being able to now use data, put them on GPUs, build new data centers, and this is why I'm not worried about that the the spend. See, what most people when they say, "Oh, it's losses forever." Now, Google, Microsoft, Apple, all these companies have so much cash and they make tons of cash and it sits on their balance sheets kind of like what Bergkshire Hathway is doing right now. This provides no value to shareholders. Okay. So having $75 billion in Microsoft's balance sheet that doesn't do anything helps shareholders none. So I'm in the camp you either buy back your stock or you pay dividends or you invest it. So when you invest in a data center you're making a capital investment like into a factory that will not pay off in year one. you are spending a pretty large amount of capital, let's say 10 to 20 billion to build this data center and then your expectation is over the next five to 10 years you would recoup your capital and make a return and it will support your other businesses. Right. >> Right. >> And so when people look at what Open AI is doing and say this is crazy or incestuous or whatever, what they don't understand is that if a open AI doesn't do this, it will not be the leader in AI. And so it is such a competition to see who will divide up the the the wealth of AI creation that if you don't invest now and if you don't go full out like Elon did and like Meta's doing, you you have zero chance of competing against them. >> But this is very Elon. >> Apple just chose to stay out of the game. Apple's like, I'm out. >> What Sam is doing is is very Elon, right? It's it's making these huge huge huge pie in the sky which by the way it doesn't always pay off. Let's be honest and I don't care how it doesn't but they're going out. Open AI just seems to be a little bit on the edge to me from the aspect of it's difficult enough for a company that is established and making earnings over the last 50 years that is well known and with a product that has been tried and true to to forecast more than let's say a year out. These guys are trying to forecast five, eight years out on a new uh technology that is unproven. >> They basically have to get to the next level before this happens and spending an all an awful lot of money on it. Now, I'm all in favor that it's all going to work out great and everybody there's enough of a pie for everybody to share. But >> I mean AI was what I'm going to go out on a limb here, five years, maybe three, but five is really the the totality of the technology of what we're looking at today. Well, that's hard to predict. That's hard to predict because, you know, these GPUs, they'll have better GPUs, but they're so good now. >> I, you know, I don't know what the depreciation lifespan will be for these, but I I suspect that they'll run for some time, even if they're not the most cutting edge chips, you know, five years from now. So, so we get >> but what I think is what you know going back to what you were saying, you know, Sam Alman is cut from the Elon Musk cloth of massive statements about stuff because you can't raise money from Silicon Valley unless you just the hell out of people. And that's the way it works in Silicon Valley. I say this all the time, you know, like private equity guys pitch me all the time like, "Oh, we want to buy part of your company and this and that." And if I tell them the truth, which is we're going to grow 20% a year for the next 10 years, and you can just put it in your formula and figure out what we're worth, you know, it's just not as exciting as if I tell them some fantastical story about how we're going to redo finance like never before and and I need, you know, hund00 million to build the greatest AI financial planner ever. And I could probably raise on a two billion dollar valuation, you know. Yeah. If I made up this fake story about some AI financial adviser that will have all of our combined 30 advisers intelligence put into one. So they know how to do IRAs better than anybody else. [laughter] You know, >> it's true though. >> So that that story I could sell I could raise tons of money, >> right? You're notating. >> There's guys doing it now. There's guys doing it >> literally. And and anybody listening, he's not overstating. This is this is not for me. I'm just I'm I'm good. I'm good. You know, like what I think is that humans are amazing. I think tech people don't give humans enough credit because they're not such great humans. And so when you are around great humans, you realize like this AI stuff is exactly how Star Wars will be. Okay? And I think Star Wars is a wonderful vision of the future. And when you think about how R2-D2 and C-3PO work together in in Star Wars, I think that will be how robotics will look like. and AI in the future where you have a humanoid robot that's super annoying that tells you statistics and you have this weird purpose-filled robot that will actually do stuff that is very useful for you. And I think that it won't look like a human. And so I think what the future brings right now is a completely open field. And anybody who has this claim that they think what seven or eight years in the future is going to be like, it's not going to be like that. and we don't know, right? >> That's the fun and beauty of it. >> When I invested in Apple, I did not know about the iPhone. I didn't know that that could exist. I was pretty happy with the iPod Nano at the time, you know, >> but I think where the risk is is if you remember back in the days, one of my first great stocks was a company called AOL. And it's very much like Open AI, >> very much so. >> Well, because they're the first in. Well, not the first. >> They were the first in. They sent out tons of discs to everybody so that you could have online access. >> People didn't really sign up at first. It was like $25 a month, which was like a lot of money in '94, '95, you know, and like they just and people are like, "What is this strategy? Just send everybody discs in America and like they're just going to sign up for this internet?" Like what is what do I even need this for? Like email, you know? >> What's that? What's that? What's that? >> You got mail, you know? So like my generation, you got mail was like like a big deal, you know, right? >> And and so when I signed up for AOL in '95 or '94, I was like, "This is awesome. I'm going to send somebody an email and there was like nobody to send emails to, you know." >> Mhm. >> And AOL was a revolution. And all of a sudden, you could plug your computer into the wall and it would do stuff, you know, and you could But AOL rallied like crazy until 99. I was fortunate enough to be at the New York Stock Exchange at the top of the market in 1999 when Time Warner purchased AOL. It was the craziest thing I've ever seen. That's why I know bubbles because I was in it, you know. Yeah. >> And so at that point from 99 to today, AOL still exists and I think it was just sold again to some weird company in Europe for some reason, which I don't understand, you know. >> I mean, what does it have? I mean, that was that was with >> AOL's mail and news. That's the app right now cuz I still have my AOL address and I still use AOL and I use AOL and Yahoo because it makes me feel good. >> Oh, well, there you go. You know, it's funny. I read a number of years ago, I read a Harvard Business Review. >> I don't use Instagram. Oh, no. >> You know, it makes me feel bad. [laughter] Um, a number of years ago I read a Harvard Business Review article and it was talking about the second in the second in uh, advantage and it was this discussion of things like AOL or other companies that you could think about that were um, taken over by the second in where for example it was McDonald's and Burger King or you know you look at the different companies that are out there that have that and that could be something because they look at you know for example Lowe's versus Home Depot right the second end was Lowe's and right and you look at that and there's something to be said about like who is going to be that second in that's going to learn whether it's a perplexity whether it's uh you know Google's whether it's going to be XAI I don't know you know which by the way supposedly raised another 15 billion or something >> yeah I was stoked because I own some of that and I think they raised their 200 billion valuation which means I doubled my money >> there you go I'm >> which is interesting because uh the valuations there I think are a little bit nutso >> well if you want to talk about bubbles the private market is where it's at >> yeah You're talking about credit or equity or both? >> Both. >> Like the way my business is so freaking weird sometimes. Like the way See, the whole purpose of private investments was that it wasn't for the public, >> right? And now they're trying to sell private investments to the public, but they're not liquid. And then what happens is you don't have a market. So they'll say, "Oh, we're raising at this at this valuation. We're raising at this at this valuation." But it doesn't mean those companies are worth that. Do you see what I'm saying? >> Oh, I understand. I get >> So, like, so like people are like, I want to get in on Andrill and they're like, all right, well, we're raising money in series F at, you know, you can buy 5% of the company for, you know, 75 billion, you know, so is Open AI worth 500 billion? Like, no way. Right. >> No way. >> Right. Right. >> But it doesn't matter. It doesn't matter because >> that's a funny thing because it doesn't matter because >> because only private investors, you know, which are supposed to be smart and sophisticated investors are are dumb enough to pay that. I guess >> I have clients that have more private equity and and hedge funds and even interval funds that that we have to babysit until we can unwind them, >> right? And you know where you whether it's some of these guys are buying whiskey barrels. >> Yeah. You know, or or they're buying some other who knows what. Last year >> there's so much garbage private stuff. It's it's now see you know because we manage a lot of money and we have a lot of money come in every year. So we're one of the we're call 100% organic. We don't buy firms. People just give us money to invest because we're good, >> you know. So every week we take in let's say 10 to 20 million of new capital. Mhm. >> Okay. And so these people call us like rabid dogs, you know, and so I got every private equity company pretty much calling us like rabid dogs except the huge ones which like don't need anybody because everybody calling them for some reason. Yep. And so so they all call me and and it's all the same, which is access. Like, oh well, we have access to private stock and this and private stock and that. And it's like, but what does that matter if you're paying five times what the company's worth? >> Yeah. Plus a 15% spiff, >> right? Oh, I don't even want to go into all the fee stuff because, you know, we're an RAIA, so we charge 1% or less typically for pretty much all clients unless you're a super small client. And so like, you know, I try to keep my fees all in at 1% or less with the ETFs and whatever. And so it's like, you know, when you think about a hedge fund or a private equity guy coming in and saying, I want two and 20, which works out to be something like four to 5% annually if they're successful, >> it's like I'm like, why would you get paid five times more than me, you know? And then they're like, oh well, we're happy to share some of these fees with you because obviously it's excessive. Not to mention not to mention that they're creating their own valuations on the to get to the 20. >> Yeah, that's what I'm saying. You know what? I can value my company. I can value my company. We're a private company and I and there's like eight formulas I could use. You know what I'm saying? Which formula would I use is the one that gives me the best valuation, right? >> Yeah. I I I get it. >> And by the way, did you see that Schwab purchased a private equity platform? Just what? >> This is what happened. This is what happened. So we you're like, "Oh, we should be doing private equity like because we're Gerber Kawasaki and we want to be able to like do everything that clients want, right?" >> And so so I'm like, "All right, I'll look into it." So first company we talked to Equities End, right? Equity End, good company. I really like these guys. And we talked to Forge, too. But I didn't like Forge because the stock is public and they're losing like tons of money, you know? Like I was like, "This is not a good company." And so of course Schwab pays 600 million for it. Uh-huh. >> And and and then like this equities end we were pretty close to starting to work with, but then it got into like, well, okay, I want to buy something today. Like, what can you actually offer me? And it was like four or five different securities. You see what I'm saying? >> Like total. And so I found one and I was like, "Send me the information on this." And they sent me the information. Um, and I'm looking at this stuff and I'm like, "This these valuations make no sense." Of course, there's no negotiation in any of this. And then, of course, there are different fee structures depending on whether it's an SPV or whether it's a direct purchase or, you know, it's like, and I was like, you know, I've invested in probably 10 private companies in my life, you know, I've I've gotten a good return so far on maybe one of them, you know. >> Well, not only that, you got you have the capital calls, you have all that. It's it's it's a crazy >> Yeah, but like I invested in Tesla and I invested in Bitcoin. I invested in Nvidia too, right? 10 years ago, >> right? >> Okay. And I've without capital calls, without >> without any of this >> with total liquidity and no two and 20. >> And I'm a stock market investor, so that's part of it, too. I'm a trader. So, if the thing doesn't trade, it it doesn't work for me because I take advantage of days when the markets are down to purchase stocks. I take advantage of the markets, you know, and so if you're good at this, which is very hard to be honest, it's very hard for me to do it, too. It's not like I have some special skill other than I have no emotion towards money, you know, which is really one of the key features to being able to invest. >> Mhm. >> Well, is not being emotional about money because you often are losing or gaining lots of money in one day. Like today, I am losing a lot of money. And we're not going to be specific about the days, but other days I'm making lots of money, but you know, it doesn't matter to me. What matters to me the most is doing the best we can for our clients and and that is where I care. Like I want to pick the right stocks and do a great job because a lot of people rely on us and we want to do the best job possible for them and you know not just be a bunch of lemmings buying the S&P and and you know Yeah, I get it. I get it. Listen, I see that all the time. Stuff comes just like you stuff comes through my door. I'm like >> who is creating these portfolios? And by the way, from some of the big companies, right? Some some major names. I'm like what? Why would they create this portfol? You know, you have somebody who is conservative in all equity. You have somebody that's, you know, aggressive and they have this like, you know, weird portfolio of just and, you know, because they got talked into this whole factor or something like that. I want to switch gears. I want to talk about back to the humanoid robots, the idea of R2-D2, C3PO, or we can call down the the the lost in space robot, or we can look at um, you know, Terminator and what's going to happen there, or even, you know, or or even how Wow. You know, >> well, I kind of I kind of think that it's possible that a robot might come back in time and kill Elon, >> you know, like maybe we're living Terminator right now. Oh, >> you know, I see what you mean. >> And like, you know how like the Terminator came back to kill the person that was going to stop the Terminator, >> right? That's going to solve the whole thing. >> Sarah Sarah. Yeah. and and and and and so what I fear is Elon's robot army, you know, like I I don't think this is good. I I don't actually think humanoid robots have much purpose to be honest. I think if I'm building a robot, I would want it to be built specifically for what I want it to do. But to be walking around my house and folding laundry, you know, my kid said, and I thought it was very smart, said, "Why would you spend a trillion dollars? Why would Sam Ultiman spend a trillion dollars to make a robot so it could fold laundry? >> Yeah. >> Like Rosie Rosie from the Jets. >> Yeah. Like like I get it if it would only cost 100k to develop something like that. >> I'm going to spend a trillion dollars. Maybe I want this thing to do more. >> But the whole idea of of humanoid robots, listen, we know that Elon, I know that you have a long history, made a lot of money from Elon. He's quirky. Let's just say that. He's quirky >> and he's a little bit immature >> and um he you know he wants to do these things that somehow seem fun. I mean like you know let's let's play baseball with a humanoid robot. Let's let's you know let's stuff like that. But robots don't necessarily have to be humanoid, right? They could be u no automation machines of some sort and they could be then smart thinking, right? Whether it's like you saw in some movies where um uh uh glass spills from a table and all of a sudden the robot is a little round thing like a like a little rumba is is automatically goes and cleans up the mess, right? Or or or maybe somebody's having a a health issue and all of a sudden there's some device that uh detects it in the house and then utilize whatever. >> Well, they kind of already have that. >> Right. Right. Well, we have some of that. But you know what I'm saying? >> Looking for one of those for my mom. >> You know what I'm talking about. Right. these the or or the Amazon pickers which we have too but that whole thing which creates mini robots or even nanos by the way to solve uh healthy >> yeah but I think like this is where we get into this like fantastical area of thought when when we're looking at the MAGA movement that I think has you know you sort of say are we really advancing as a society are we really moving to the Jetsons or are we kind of haven't gone anywhere because when I was in Orvietto I think those people were way smarter than us. >> Oh yeah. >> Today. >> Yes. >> So if you go back thousands of years, I think they were actually smarter than we are today. And Orvietto is proof of it. >> You know, it's like these people were super smart. How did they build this stuff? How did they get everything up that hill and then I was dumb enough to put in the mapping to to drive through Ovettto. Oh yeah. Okay. So then I got stuck in the middle of the city and I started yelling at my wife, "Why did you just put in the mapping? This is an ancient city. It's not made for cars, you know. So, I'm starting to panic cuz the car doesn't even fit in the road and I don't even know what to do, you know? >> And then I couldn't even turn right cuz it was not wide enough where I would it was telling me to turn. So, I went the wrong way up a street and sure enough it opened up into a parking lot. I was like, "Thank freaking God." >> And by the way, I must have been in that car with you cuz I had I had that exact experience by the way. Exactly. >> I'm sure you did cuz you put into Google, take me to the restaurant in Orviet to the main square. Right. >> That's right. >> And then it tries to kill you. Yeah, >> talk about AI. >> Show me a way through Ovetto that doesn't kill me. That would be great. >> Let's continue with the robot and the whole robo taxi thing. >> So, here's the idea of technology. All technology that has been wildly successful simply makes our lives more efficient and better. It simply does that. Okay, Uber is a perfect example of that. >> Uber when it came out, taking cabs sucked. Horrible. >> It never was a good experience. You call these people, they may or may not show. And when when my my business partner actually showed me Uber the first time, I actually had my own driver. You know, I tell this story a lot. And I used to call this guy and he would pick me up and take me to clubs and wait and then drive me home, okay? Because I didn't want to get a DUI and I'd go out and I was single. And he goes, "Oh, we got Uber. You don't need Alex anymore." Coincidentally, guy's name's Alex. And you don't need Alex anymore. I didn't want my real Alex to get upset. And uh and I and it's like, "You don't need Alex anymore. I can go on my phone. I can order a black car cuz Uber was originally just black cars, you know. And I ordered the they ordered the car on the phone. It came, picked us up, we went out clubbing. It was really fun night actually in hindsight. Um, and then we called the car and it took us home and I was like, "This is amazing technology, you know, like amazing." So when you think about the cell phone for example, like before cell phones, you know, you just didn't communicate, you know, and all of a sudden you got a phone. It was like I could walk around with a phone. I think my first phone was like a Nokia, you know, and and you'd make calls. There was no texting. And then there was the Blackberry era when we came up with this innovation that we could text, you know, >> so like most technologies really make our lives better. And now we finally reached a point where technologies are making our lives worse. And the example of that is social media. So like today, there's no doubt in my mind that Steve Jobs had no intention that young people would be walking around staring at phones all day. That is not what his intention was when he built the iPhone at all. >> He didn't think so at all. He was thinking like, "Wow, this is great. It'll connect to the internet and you can listen to your music >> and make calls." >> You know, >> that was pretty much it. I agree. >> Yeah, that was all. And so today, like the Facebook era and the social media era, you know, is basically just like destroyed the minds of our youth. And they're fine doing this, the technologists, because they've made so much money doing it, you know. Um, but it hasn't added to our lives. And that's where I fear this robot stuff goes. See, having a robot that just walks around and does laundry is not going to improve my life in any way because the person who does it in my house is quite nice and I have no reason to replace them. Okay? There's not an inefficiency here, right? You know, right? >> So, when you think about where are there inefficiencies that can be solved with robotics, there are lots of jobs that are quite dangerous or difficult, you know? And so you're like, "Okay, I put a robot in charge of like cleaning the turbine engines of the plane or something like that, you know, where it's like dangerous or, you know, or unhealthy, you know, like mining jobs are unhealthy >> window cleaning, you know." >> Yeah. Like those dudes that go outside on highrises, that could definitely be something that's a robot. and and humans do this, but you know, you're like, if we could just come up with an easier way to clean windows on highrises, that's a great use of a robot. You see what I'm saying? I get it. It just stick to the window and go up and down all day. And I got this robotic uh kitty litter box and it really just like my cat poops and it does this circle and it gets the the poop into a bag. >> Oh, that's helpful. That's helpful. >> It's wonderful. That's good. >> I've never cleaned crap once. I've had this pet. You don't and you don't need a trillion dollars to to program that. But what about the robo taxi which is the >> again uh I think more than anything I think uh well we don't need robo taxis. Why do we need the robo taxi? What is the whole thing with Elon with the robo? Is it a carrot though? Is the robo taxi a carrot for Tesla? Cuz if somehow it's almost like a trigger for investors >> the the the idea is that we're not going to drive anymore. So, there's somebody at Tesla named Elon Musk and maybe some other people who think people like us are going to stop driving and that these robo taxes will be ubiquitous. They'll be everywhere and you'll just like step out onto the street and a robo taxi will pick you up and it'll take you home. And then you want to leave for work, you step out of your house and a robo taxi will pick you up and take you home. I I'm not really sure about this this vision because it would involve replacing like pretty much every car that exists >> which is good for Tesla which is good for Tesla. >> Well, yes, but when I talked to Elon originally when we actually cared about climate change and I said to him once I said, you know, it was a question actually at one of the events and I said, you know, if Tesla can make X amount of cars, like how many years would it take like if we make as many electric cars as like how many years would it take to replace the vehicle fleet? And it was basically like 20 years, you know. So it takes 20 years to replace the vehicle fleet if you if everybody just bought new cars that were autonomous. So if we had something that actually worked today and you say, "Okay, there's 75 million vehicles sold globally annually, who could get up to 75 million production of autonomous vehicles?" You know, it's just not going to happen. So So people are going to drive regular cars until I die. That's what I think. And I'll be one of them because I love driving. >> But you also I would I would I would I speak for you. You would not be unwilling to get behind the wheel of a quote unquote autonomous driving car and let the car do its thing. But >> I take Whimos all the time. I take Whimo now all the time. I don't like Uber because Uber is a horrible experience like from the the perspective of a robo cabab. So that's the innovation is getting the human out of the car. And most of the humans driving Ubers in LA are not from LA. They're not good drivers. They don't smell good. It It's just not a good The whole time I was thinking the smell. I didn't want to say it. I was think as I'll say you're talking about every time I can spend $180 to go to the airport in an Uber and it smells like crap in a car. Something happened. And I hate to tell the guy this, you know, and I'm like, "Dude, you've been sitting in this car for 73 hours straight and it reeks, you know." >> Yep. From everything. I'm like, >> so what about what about >> when I get in a Whimo, it's like smells like roses. There's no person in there. >> But Whimo could be any car with a Whimo with a >> Whimo tech. That's the big issue. And that was the hope I I thought really from from a Tesla standpoint that they would have the services component that would pay for, you know, they would bring in all sorts of money. And that's why that I think that Elon keeps I see it. He keeps on talking about this and every time he talks about it, the stock goes up even though sales honestly suck at Tesla, >> right? I mean, >> it's worse now than ever, right? But like, >> see, the whole cab thing, too, is I always like had this vision that Tesla would make these amazing electric vehicles that could drive themselves because what I actually really want is when I'm driving to the Dodger game in the World Series, that I can just push a button and it will drive me. >> Yeah. Congratulations, by the way. >> So, thank you. So, if [snorts] I can push a button and my car drives me around completely safe like a Whimo. >> Yeah. That's a huge win for Tesla. >> Huge win. >> So, so the model is we sell you a car and it can drive itself and it's electric and I think you could sell 10 to 20 million of these a year and that was the original goal of Tesla. Okay. But once Elon came out as an extremist, which is what he is kind of, >> it's like, you know, he turned off like pretty much everybody, you know, and then it was like, well, the right-wingers still like him and then he turned those people off. And so when you're like, who actually likes Elon anymore? It's basically like white male tech geeks that love Tesla. That's it. >> Not a big market. >> It's interesting because you said when you originally started talking with Elon back in the day and while you probably bought Tesla as a as a stock, which you made a tremendous amount of money on, I know. >> Remind me of Apple. >> Yeah. Right. But now, I mean, the Ford F-150 Lightning production being cancelled. >> I know. I'm so pissed about it. I'm so pissed because Elon forced these companies to go electric and I care about climate and I think climate solutions is where there's money and so it's like now all these companies are like thank god we don't have to do this anymore and compete with Tesla so we can go back to selling gas guzzlers and making much bigger profits. >> I mean the hybrid the hybrid is not the worst idea for >> no hybrid is a good solution >> for like an F-150 where you're worried about the I mean you can get the torque don't get me wrong but worried about the the longevity of the truck. That's the range anxiety thing. There's a lot of range. I I I just thinking about it gives me anxiety on that, you know. >> Well, you know, it's one problem that I've never had and as much as you worry about it. Now, the new Rivians are 400 miles a charge, so it's farther than a gas car. Um, >> you owners, you own Rivian stock? >> I don't own the stock. >> You see the pay packages came out? >> Yeah. And you know, I don't know what's wrong with all these people, you know, but like R.J. has not done a great job. You know, no offense, I I love Rivian and and so just full disclosure, I I love Rivian. I don't own the stock. I own a car. I own a car which I really like. I think they make wonderful EVs, but I think operationally they're just challenged. I just don't think they have the work ethic and the type of focus like Tesla had to to really get to where they need to be. They just need to be pushed harder and and that's a management issue. So R.J.'s is a great marketer and he's built a great brand, but I I just don't I just don't see the like when you go to Tesla like I I was reading about like the Tesla meeting all hands meeting they just had where Elon's now basically saying 2026 is going to be the hardest year of your life because if we don't achieve all these things we're going to be in trouble and I was like I was like as much as I hate the fact that Tesla's in this like really tough situation I'm like I love the work ethic. >> Yeah, sure. >> I love it. sleeping on the floor. >> Elon will die. He'll die trying. That's why I don't bet against these people. You know what I mean? And so, you know, I still own $90 million worth of Tesla stock somehow. And, you know, people say, "Well, you don't like Elon. You don't like what they're doing in their direction." I said, "I'm not saying they're going to fail, though. I don't know." >> Yeah. >> I don't know. But I'm not betting against them for sure. But what I do know is that I'm not going to give up driving. My kids will drive, but they probably don't care as much as adults. I I don't think Tesla's technology in its current hardware setup is good enough to compete with Whimo. Whimo completed a million robo taxi rides last month in California. This is impressive. They're everywhere where I go now. I think they're the first mover and because it's Google, I think they dominate. I >> I think and they have the best >> messing around has cost them, >> right? Oh yeah, they got plenty of money, right? It it it's and there's a reason for Whimo to exist beyond taking rides because Google understands they've got you captive in the car and they're an ad model and so when you're driving for your 30 minutes in the Whimo soon it'll be things like do you want to watch ads and your ride will be cheaper, >> right? >> Stuff like that. >> Yeah. >> Okay. So it's we're getting to a point where Google can really monetize the cab in a different way than Tesla, >> right? >> And and so that's to their advantage. Tesla selling cars that drove themselves is a better business than being a a a cyber cab. The other thing with the cab business that's tough is they kind of assume that because there's no driver that the making money part would be equal to what the driver would make. So, if you're a full-time Uber driver, let's say you made $65,000 last year. So, their assumption is like, well, then if I'm a full-time robo cab, then I'll just make $65,000 profit because I don't have a driver. But it doesn't quite work that way. >> And one of the reasons is is because, you know, like there's certain times that drivers make more money than others and the drivers learn when they want to drive depending on demand. And so when there's a concert that lets go and and there surge pricing, drivers make a lot more money than in the middle of the day when there's no demand. You see what I'm saying? So the way Uber works and the big challenge that they had early on in their existence, if you remember, was surge pricing on New Year's Eve. >> Oh, I remember. I remember. >> Okay. And so you go out to your party on an Uber for $28 and then you try to leave, you know, at one and it was like $128 and people would freak out, you know, but that was just like the supply and demand dynamics that they hadn't smoothed out. >> Over time, they got enough drivers that drivers just come on on Saturday night that want to deal with drunk people who drive across town because they make more money doing that, you know, and drivers come off. So the idea that we're gonna have just like millions of these cabs just like kind of just waiting around for rides all day long doesn't sound like margins going up. It sounds like margins going down. >> And that's what my perception of what will happen with cab in 5 years the cabs will be free basically. >> Wow. >> And and you'll have to you'll you'll have to watch ads you know you'll watch YouTube. Oh god, no. Not don't don't talk about that, dude. But a giant >> That's not us. This is what the kids do. The kids are perfectly fine trading their their brain cells for free. Yeah, I see it. Hey, listen. I want to just quickly finish up on something. First, I want to say something, Ross. I really enjoy talking to you. Seriously. Thanks. I I have guest I I have I have so many guests. I've had 950 shows on this particular podcast. I have >> Wow. >> I have so many guests I've had over the years. And and and you are a treasure. I really appreciate that. >> Oh, thanks. I I really appreciate that. That's why I like doing your show because I enjoy talking to you. >> So, let's talk about the massive energy need for >> Oh, I I'm investing in this >> these data centers. And I and I actually have a few investments we made on companies that I usually would not invest in. I'm like, okay, at the beginning of the year, like for example, full disclosure, SMR, Oaklo, CEG, you know, these companies have made me >> be careful with nuclear. >> No, clearly, but I I'm out of them primarily. I just I just hit them a little bit recently this week again, but we made like 600% on these things. So, I'm I'm clean I'm clean on on those profits. Let's talk about that. Where are we going? >> So, so this is actually the part now you're getting into what I'm actually working on. So, we look at AI like any other gold rush where it's like the most obvious place you think to make money is usually not >> open AI, you know, Microsoft. Not that I I think Microsoft will do fine, but I'm just saying where is the real money to be made. And one of the things that I learned when the Palisades burned down was I started watching infrastructure being rebuilt. And the first thing they started working on power. They're still working on power. And I I started hanging out with these power guys, right? Because they're outside of my house every day. And they're boy, these guys are like it's a such a specialized skill, okay? like putting in power transmission lines and all this kind of stuff. It's not like you could just like go to school and do this and be good at it. It's you're climbing poles, you're dealing with high-owered wires. It's a skill that you learn through working on the job. It's it's a union job. And the way the cities do this is they outsource to companies. So, it's not like this like we do have the Department of Water and Power here in LA, which is unique, but most power companies are privately owned or they outsource power uh services like uh transmission lines and fixing stuff. And one of the things I learned first hanging out with the power guys was that our infrastructure is pathetically old. The power that they were taking out of the Palisades, many of the poles were over 80 years old. They literally My neighborhood is is was built 80 years ago. I I think it was in the 50s and 40s and it's the same polls. Okay, so it gives you an idea how aging the infrastructure is in the United States for power. Now I started studying this many years ago with electric cars because what I was concerned about was power in the same reason like if everybody had an electric car, do we have enough power to do this? And if the price of power goes up substantially then that defeats the purpose, right? >> Yeah. And then we have these clean energy sources like solar and nuclear. And so you've got [clears throat] many issues here to address. First, I'm building a big data center, let's say, in Arizona. I think OpenAI said they're going to build a trillion dollar data center in Arizona. So you're talking about this massive footprint of things. Now, if you've ever gone into a small data room in an office, for example, let's say it's a one room with a bunch of servers, it's hot as hell and you got to run air conditioning through this stuff and you got like a thousand wires, you know, plug in all the server stuff. You got to hire all these people who manage it too, you know. So, running these things is complicated, expensive, and use a lot of power and a lot of humans, right? >> Yeah. >> And so, we started looking at this and where I was like, "Oh my god, this is the opportunity." And it started with GE Verona for us which we made a nice return off >> symbol GEV. >> Yeah. And then you know I stay away from so my >> but they also they got a big pick because of nuclear too. G Verona >> right. But see my stepfather's the one of the leading nuclear scientists in the world. So if there's anything nuclear related I know more I I can learn more about this than anybody else. And he like works with the department of uh he he's retired now but department of energy. He's very close with everybody in the nuclear power industry and he's literally the dude who like it builds nuclear power plants and he he has a very simple answer. There will be no nuclear power coming online for 7 to 10 years. It takes that long between regulation, building, safety and then you got all the nimbies who go crazy when you try to build anything nuclear near them. Okay, so nuclear power is not a short-term solution for AI. >> So keep that in mind. Okay, it's a long-term solution and one that we should address. And the government needs to subsidize nuclear because it has very low returns for investors. And so now the Trump administration announced that they're going to be supporting uh nuclear power, which is a great positive step, but there will not be any nuclear coming online anytime soon. Okay, look at it that way. >> Okay, >> on the other side of the coin, we have natural gas, we have solar, we have other forms of energy. The best form of energy is from the sun and it's solar power. So we have the ability to scale, you know, power generation pretty well if we want to using traditional methods, but we also need transmission and we need infrastructure and we need the ability to, you know, >> to capture it, >> scale scale this up, right? You know, >> and it's just a huge investment like it's so much work like physical work building a data center, you know what I mean? And all the power around it. So we just bought stock in a company Quanta Services PWR and and Quanta Services um really does all that you know the the servicing the transmission lines the it's really a bricks and mortar play on AI >> is that is that specific to solar or is that specific to >> No it's specific to all the different types of energy generation they do more the like servicing like connecting it making sure the wires work you know like the whole bit generation of the power. >> Is it like a baker used for the oil industry? >> Kind of. Yeah. Yeah. Yeah. So, >> so they do all the hard work. Now, it's not a high margin business because it's labor intensive, but it's you can't do anything without these people, right? Okay. Right. >> You just can't. So, we're looking at a couple other companies now in this area as well, which I'm not going to talk about because we haven't done anything yet with them. Um but like essentially this infrastructure is really the play is it you know and and infrastructure in the United States is terrible terrible. I mean in the city of Los Angeles for example you know cuz I work I'm working trying to get rid of the communists running our city and you know so we got one city council person in who's wonderful Tracy Park who's who's wonderful in West LA. Um, and you know, and we had a meeting and she was just like, you know, the infrastructure in LA is so bad and antiquated. Everybody's upset about the fire. They don't want to know that 40% of the fire departments in LA are just unusable right now. The trucks don't work. You know, like infrastructure just is so old in our country in so many places and it needs to be invested in. And part of that is the government and part of that is the private sector. And so we're going nowhere without power. >> No, clearly. No, there's no question about that. >> We're going nowhere. It doesn't matter how much we talk about AI. They got Satia said it the other day. Satia Nadella from Microsoft said, "I got chips. I got a building, but I don't got power. So, we can't scale any faster than we're scaling until we have power." You know, >> right? >> And and boy, you know, this is not something you do in a day. So, you know, if you're talking from scratch, I'm building a solar battery system, transmission lines into a new data center. This is a massive investment. And that's what's happening right now. So the good news is these are investments all in the United States. They create lots of jobs. It's very labor and skill inensive. And if you're a young person and you don't want to go to college, you could get a great job in the power industry. There's just no question. >> So So that I think is one of the most interesting and important and crucial investments you can make as an investor. in my fund GK right now. We we we have two of these and we just had a stock Amphanol which does all the wires in the data center. We've owned a stock called Train Technologies which does air conditioning systems which I originally bought because they do heat pumps for um for climate change and and now it turns out you know we need all these air conditioning things on data centers too you know so train is in a great position with global warming and the huge demand for air air conditioning just in general because most of Europe doesn't actually have air conditioning and then and then of course um now this data center demand is just wonderful for cooling uh products and such. So, Train is in a wonderful position as a company as well, which also has exposure to that. So, we're continuing to build out what I call the the bricks and mortar of AI because I think that's in a lot of ways more interesting than the AI plays themselves, >> right? Because because either way those could win. They win because of every see I posted this the other day for from 1875 to 19 let's say to 2000 or to when the internet was created let's say 1875 to 1995 let's say >> right >> oil the industrial era right >> factories roads trucking you know this is how we built America you know and America is this wonderful story the railroads the the the the communication, the telegraph that was laid next to the railroads, the communication. And when you look at infrastructure is what America made America wealthy. We weren't a rich nation. We were a bunch of farmers until we had railroads. And once we could trade and move goods and communicate, all of a sudden that infrastructure made America extremely powerful and wealthy. Okay? because all of a sudden consumers all around not just the United States but even globally could have access to our food for example our cattle so shipping cattle from Chicago to New York right so now you go from 1995 to the president's all been about the internet which runs on electricity so we've moved from an oilbased power system around cars and trucks and oil and factories to now an electricalbased system that ideally cars and trucks and factories and everything will work on electricalbased systems out. Okay. And the problem is is none of that infrastructure, the railroads, the telegraphs, that it hasn't really been built or what >> or what we want it to become. You see what I'm saying? So for this vision to be actualized in the next 20 years, which is our lifetime, infrastructure is going to be the absolute key to the success of it, more so than the innovation itself. >> Yeah. Amazing. Ross Gerber from Gerber Kawasaki. We'll have the information on how to get in touch with you over on the show notes for episode number 947. You can find them on Twitter. You can find them everywhere that social media is. Um, and I really appreciate you coming on board today as always, giving us a just an incredible depth of information on all sorts of topics. Thanks so much. >> No, no, I appreciate it. Now, now I want to go buy some more power stocks. >> There you go. Go get them. >> I convinced myself. [laughter] >> I'll see you soon. Thanks. >> Yeah. Take care, Andrew. >> Great. How great how great is that discussion with Ross? I mean, we have a great synergy there. We should probably do a show like more regularly. I think I'll have to talk about that. Anyway, uh things are uh interesting to say the least of what's going on right now in the markets. I think you make some very good points with regard to, you know, we're not necessarily in a bubble, but we're in a valuation question mark and there is great opportunity to be had right now. now and then it's going to be winners and losers like we've seen, but yet at the same time there's a lot of money to be made, a lot of money be spread around. So, we'll keep a watch on that for you as well. As I mentioned, go over to the disciplined investor. You can see the show notes, everything. And by the way, we have some AI generated show notes if you want to read it and catalog it on the episode show notes page. So, that's over on the disciplinedinvestor.com. I want to thank you for joining me this week and every week. A shout out to all of our great clients. Thank you for all that uh you've done you do and thank you for believing in us, trusting us with your hard-earned capital, your life savings. 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