I know that because my daughter just got some. She’s 13 now. Full teenager-mode with zero filter and all the sass you can handle as she tests her boundaries. She pairs these grails with this.
Baggy pants. Baggy pants just like what this fashion model wears. Baggy pants plus them “dope” shoes. Put on a small t-shirt and you’ve got all the markings of a teenager today . . . or anime character.
Like Nat Geo, we often observe this American teenager in her natural habitat. Chatting and laughing. Twittering on with her friends about their fashion sense, their fashion “forwardness.” So cute. Soooo cute. Soooooo cute.
Those, that, this . . . all of this . . . is soooo cute.
Love it.
Adorbs.
I can’t help, but chuckle when I hear it. I poke and prod her of course. Mimicking her mannerisms just to see if she’s retained any self-awareness, careful not to mock though as these are . . . formative years for a girl.
It’s so new to you isn’t it?
These Air Force 1s . . . these baggy pants.
Little do you know that Air Force 1s were first made in 1982. 42 years ago. Heck nearly 20 years ago that middle-aged rapper, Nelly, actually wrote a whole song about them called appropriately “Air Force Ones.”
We raise this issue not because of nostalgia, but because we’re reminded of what happened 20 years ago with the internet vs. what’s happening today with Artificial Intelligence (“AI”).
What went around . . . comes around . . . again.
It’s inevitable because each generation must relearn the lessons lost to time. Each generation needs its own bubble. Sure we could read about such things in books, but whether dusty or digital, they pale in comparison to the vividness of an actual experience. It’s the ultimate teacher. My captain o’ captain . . . why buy and read a wealth of knowledge for $20, when you can spend $120 and ARM yourself with the real thing?
Accept no substitutes and spare no expense in your education.
We certainly didn’t.
We’ve been there . . .
. . . and we have the charts.
Back in our days, we were bedazzled with this newfangled thing called “the internet.” We marveled at how it would/could “change the world.” Collectively, the world read news on “the web,” day traded stocks, read email, downloaded music (all legally of course), ordered books and pet food, and surfed (*cough cough* adult content).
So up we bid, the companies that developed and sold the technical backbone/infrastructure needed to build the web. Up we went with any company that became tangentially related to the internet. Any company that mentioned “.com” was snapped up by hungry investors back then, just like any company today that mentions AI.
While we never said “too the mooooon” . . . we certainly watched our stocks zoom. It’s so easy bro, even an E*Trade baby could do this. Yeah, that was our baby.
Look, it’s not that we’re the only ones seeing this. As we draft this article, the Financial Times published this article “AI Hype has Echoes of the Telecom Boom and Bust,” and posted the chart below.
So it’s not that many of us don’t see it. It’s just that the one’s who’ve seen this before, fully appreciate it.
Bloomberg is also seeing it as they recently published this gem of a chart.
How rich are some of these AI chipmakers being valued at? 40x sales. Now “back in our day,” we valued Cisco at only 30x sales at the peak. See?? We were much more conservative back then when we used abacuses and slide rules.
You computer kids?
Animals.
40x . . . lol . . . or is it smh?
How silly is that? Well our forefathers, those grumpy old baby boomers said this. Here’s Scott McNally, Sun Microsystem’s CEO talking about the insane valuations in 2002, two years after his stock ran up (to 10x revenues . . . amateur), and then ran down.
“At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes which is very hard. And that assumes you pay no taxes on your dividends which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?”
What were WE thinking . . . indeed. Obviously, we weren’t. This is all psychology. It’s 90% psychological underpinned by 5% fundamentals. The other 5%? That’s the seed of truth that AI will eventually impact the world beyond a conversation with ChatGPT. It’s similar to our acorn of truth that the internet will keep growing and take over the world. As we learned though, it just takes time. It takes the acorn years to grow and develop, and it takes years for businesses to discover how to properly use and monetize the technology.
Maybe AI will be quicker, maybe general AI will help us solve that question even faster. Maybe, but it will take time. We think it’ll likely need another technology to vault it forward (e.g., as the iPhone did for the internet), but what it needs now is time. Still that’s the 5%, not the 90.
TODAY, IT’S ALL ABOUT THE HYPE . . . CAN YOU FEEEL THAT HYPE?!!
AI!
So be better than we were. Forget the 30x Cisco . . . 40x that NVDA! Annualize last quarter’s $18B of sales . . . $72B of sales. Then slap a 40x on it. $2.8T / 2.5B shares? +$1,000/share.
Why not? When it’s all in your head.
40x.
You kids. Stomp’n in your Air Force Ones.
So adorable.
Just like we were, back in our days.
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the human condition in a nutshell.
cope ;)