yeah i think something that was kind of interesting to me when i was being taught about you know investing from more of a theoretical standpoint at duke was they would talk about investing from the standpoint of all the information in the market is perfectly priced into the price so if people predict that xyz can happen in the future that's reflected in the current stock price but what i found quite confusing about that from actually speaking to real investors is people make predictions on earnings each quarter of how well they think the stock is going to do or not do the stock price moves so much depending on which of these cases is true so on that point it kind of seems that you're able to predict how a stock does and it will still do well i know that sounds very quite a simple thing to say but it's that i guess there are different scenarios that people would expect yeah

i think the thing is when you're investor it's a bit like being you know i i sale quite a lot and you know what current seas you're in as sort of a captain of the boat or what have you but it's all about looking out two three days now when it comes to an investor in the stock market anybody can tell you anybody can tell you what market we're in today but what they can't tell you is what market we're going to be in the next six to nine months now as as as you As you're captain of a boat, a bit like captaining a fund, it's all about projecting where you think the seas are going to be in the next six to nine months.

And that's what it's all about.

And that's what nobody can teach you.

You know, people can tell you exactly why something's happened, but what they can't tell you is what's going to happen.

But the more experience you get to see, you know, then you get better at predicting what you think could happen or might happen and what the risks to that are.

So really investing is about know anybody can tell you a business is cheap i can tell you lloyd bank's cheap but what i can't tell you exactly is where the yield curve is going to be and i've got a good i've got a good i've got 80 conviction that the yield curve is going to stay cheap but you know there's always those outliers where it could flatten now what instances would that flatten the yield curve and then you have to then start looking at that and then you have to look at the market and interest rates and inflation and all these things to then give you give you some sense of that again with with commodities you know what's driving commodities ultimately what's driving commodities is there's many more buyers and sellers but to produce commodities is very expensive so therefore something like copper you know from a plain sight to producing copper It takes 30 years.

I think that is very different to suddenly Salesforce being replaced or Apple being replaced or Alibaba being replaced because many of those customers, because many of those people are in their historical ways and aren't just going to switch straight away it's even like a lot of people say that banks can be quite slow to adapt new innovative tools when actually this is seen i think this shows a bit of a benefit in that it's not like ai happened day one super intelligence happened day two and everything gets replaced day three it's sort of this slow evolving thing

Do you think that there is a risk that, you know, this is becoming a bubble and we're too focused on the Mag7 businesses in America? Or do you think that because these businesses are going into so many different things that, you know, history you know that it's just going to be a new path moving forward and it doesn't matter

well it's all basically backed by earnings so if you look at say meta for example they were making 30 billion of operating income in 2020 so 30 billion the forecast to make nearly 90 billion in 2026 So it's 3x the earnings.

So therefore, you know, if you look at Microsoft, for example, in 2020, Microsoft was making operating profits of 83 billion, whereas in 2026, 2027, they're going to be making 170 billion.

okay so this is backed by this is backed by earnings now bubbles are when you've got massive price appreciation that ultimately aren't backed by numbers um the problem is with with not a problem this is basically a backed up by earnings so you know even apple apple's operating income in 2020 was 66 billion they're going to make around 135 billion this year so if you if you look at it like that then the share prices yeah there's been a bit of expansion of PE but also bond markets have rallied and the yield curve you know as an interest rates are being cut so which is act as a counterbalance so therefore you you can argue that it's not a bubble

Do you think that this is just going to continue going up over time? Is it like Bitcoin just going to keep reaching new and new and new insane levels? What's the future for gold?

Well, I think why is gold going up? Well, if you look at, say, Chinese foreign exchange reserves of, say, treasuries, they haven't gone up.

And this is all obviously post-Russia and what have you.

They still, despite having a current account surplus of 500 billion, they haven't been increasing holdings of treasuries.

Have you started to see many of the losers from AI come about? Because even from a VC perspective, I was actually speaking to a friend the other day, and he was saying that someone he knows ran an experiment where he basically reached out to all of the top VC companies, said, hey, I've got a degree from Stanford, I've got a degree from Duke, you know i'm really interested in ar ai and building a business like this and they threw money at him without even properly looking at the financials or the business plan of which there was none like are you finding this with public companies as well um there have been losers to ai even with this new wave coming about i'm more just asking this question from a perspective of we know this is the next big wave we're seeing huge amount unprecedented amounts of money being you know being created value creation and is this just going to be all boats sort of rising sort of situation or is it going to be a few winners and have you seen any boats sink um or is everyone just winning at the moment and this is a a natural thing that will occur a few years down the line

i think we've had our sort of iphone moment with it i think it was 2000 2007 2008 um you know steve jobs stood on stage and presented this thing called the iphone which was Incredible.

And really the iPhone 1, 2, 3, 4 were just mega products.

And then really the evolution of the iPhone, if you look back at those old phones, yeah, they do feel quite old, quite heavy.

But I think the incremental advances in AI are sort of now at iPhone 3, iPhone 4 level.

And I think what you're going to see is you're going to see AI slowly over the next decade Businesses that upscale that and use that as a competitive edge will win.

Businesses that don't embrace it will lose.

What is the actual implications of companies within those sectors of luxury consumer and of gambling? Are these companies going to do well, badly? What are your thoughts around them?