Ultimate Sell Signal? Why Tech Billionaires Are Quietly Dumping Their AI Stocks | Adam Taggart

people that you would think would be the most all-in on the AI trade right now are actually selling and getting out. One guy said, "I'm already like 65% in T bills." This is probably a time if you're sitting on some gains this year. Take some off the table. Maybe potentially think about putting on some hedges for the next of the year. AI and AI adjacent companies are 45% of the S&P market cap. Not not NASDAQ, S&P. >> Special coverage from the floor of the Royal Symposium is brought to you by Palisades Gold. Adam Tagger joins us today. You'll recognize him as one of the most important and uh bigger channels on YouTube in the financial space. Thoughtful Money. I think people have been following you for quite some time. I'm personally a fan. Love your show. Everybody should follow Thoughtful Money. That >> That's so great. I was just going to say not nearly as important or large as the David. >> No, absolutely not. That's not true. But uh that's that's why that's why I'm interviewing you. Um Adam, so great to have you on. the major themes of your show I like to talk about because you've got a >> Sure. >> It's it's a good sentiment gauge the people on your show and other people um on other media what they're thinking about right now. Um right now there is a confluence of different forces when it comes to the macro. there is higher inflation expectations. At the same time, potentially a more hawkish Fed. At the same time, as you've talked about in your show a lot, deteriorating consumer strength, um rising debt, and the uh deterioration of the strength of the dollar has been a common theme on your show as well. >> Sure. >> And all all of these things are pointing to what kind of a future, Adam, >> great question. Um simple question, maybe a little bit of a challenging answer. Um I I probably for just the viewers here the key takeaway is probably heightened uncertainty going forward through the rest of this year. >> So um maybe that's a quick punch line we can put up right up front here which is um it's markets have done pretty well again this year and that's after three backto backto back years of almost 20 plus returns around average 20 plus returns in the market. statistically quite unlikely that 2020 that the fourth year here in 2026 was going to be a similarly strong year, but it's kind of had that performance so far out of the gate, even despite the Iran war. >> Yeah, >> I I I would say this is probably a time if you're sitting on some gains this year, take some off the table, maybe potentially think about putting on some hedges for the next of the year. And while I actually think the economy may actually do pretty well for the second half of this year, that doesn't necessarily mean the markets are going to do as well. So, >> time for caution, I guess. I want to come back to uh the markets. Let's talk about AI. Now you uh did your MBA at Stanford. Now back in the day um how have by the way Stanford is well known as one of the top schools for Silicon Valley. It's been a feeder school for Silicon Valley for quite some time. Uh the entrepreneurs coming out of Stanford back when you were doing your business degree versus now the shifts in focus and the shifts in trends. Can you tell us about that? >> Sure. Well, it's really interesting. So I was at Stanford when the internet revolution happened and you know Stanford's been a feeder school into Silicon Valley in the tech world for decades long before I went there. >> But I was there and got the front row seat to another uh technology transformation process with the internet and and I see a lot of parallels to what we're going through with AI right now. And in fact AI may even end up being more transformative than than the internet itself. We'll find out. Um but uh crazy time. Um I it's funny I was not a tech guy. U but of course I got swept up like that uh in that like everybody else. Um and then went to go work uh for both a startup and then worked at Yahoo for a long time. Um and uh you know what I'm finding right now is back then the big question was where's the top right? you know, you you kind of knew near the end of it that you were in a bubble, but nobody knew where the top of the bubble was. And and basically what you what you have to do when you're in a bubble like this historically is you just keep going until you discover that the the top was behind you. And that's what we're doing right now with the AI trade. Um, everybody who I talked to who is in it pretty much acknowledges that it's in a bubble. The question is, is it, you know, using the comparable to the.com era, are we in late 97, early 98 or are we in early 2000? Right? Are we are we closer to the beginning or the end of the game here? >> And one thing I'll share with you if you if you're interested, I haven't mentioned this yet, not even on my own channel. >> Um, I was at a got very lucky and got invited to kind of an elite of the elite uh party for the 4th of July here uh in America last weekend. And uh I now live in Nevada and was invited to this party on a on a mansion on the shores of Lake Tahoe. And the house next to the the house throwing the party was Michael Milin's house. The part the house to the right had been owned by Steve Wyn. Um >> Wow. >> Uh one of the attendees at the party was Sergey Brenn, >> co-founder of Google. So I mean that level of of of elite. And I don't normally travel in those circles, folks. Just FYI. I'm I'm I'm just a podcaster. Uh but anyways, I I got invited and um met a lot of really amazing uh people. >> It's funny when you're at a thing like that and people don't know who you are, they have to treat you nicely because they think you must be important because you're at the party. >> Well, you are important. You're Adam Tagger. Who doesn't know Adam? >> Well, I'm not not Sergey Bren important. But but the but the punch line was these were people who made fortunes. >> Sure. >> In tech. >> Yeah. And when they found out what I did for a living, they all wanted to ask my my impression of they wanted my outlook for the NASDAQ. And as I started to say, you know, I've got concerns um that basically for the AI trade u valuations have gotten so high because we don't know where where the ceiling is yet. Um that you know, right now the the whole sector is based upon um the analysts capex spending projections. >> Yeah. And right now that's basically an Excel spreadsheet that says if the money's there we're going to build X number of data centers at this rate off into the future. And there is I think a building chorus of potential constraints that are likely to not not make that buildout uh be able to be physically carried out as aggressively as the spreadsheets show. And as I sort of started explaining this almost to a person, they'd interrupt me and say, "Gosh, you know what? I feel the same way. In fact, I've already sold all my tech. One guy said, "I'm already like 65% in T bills." And what I took away from this was the people that you would think would be the most allin on the AI trade right now are actually selling and getting out. >> Yeah. >> These are the guys who actually make the big fortunes in technology and in their personal portfolios, they're totally de-risking right now. So I took that as a really I mean it's an anecdote folks but I took that as a really interesting data point from the creme de la creme of the tech environment. >> Before we continue with the video, let me tell you about one of your most important personal assets which is your personal privacy online. If you've never Googled your name, do it now. You might be surprised at what comes up. Data broker sites and people search sites are quietly collecting your personal details such as your name, home address, and phone number, making it very easy to find. Delete Me, today's sponsor, is what I use to fight back against that. After a quick setup, they scan for where your personal information appears, verify those listings, and submit removal requests to hundreds of broker websites. They also continue monitoring over time since this information can reappear over time. I've personally been using it for over a year now, and it's removed 204 of my listings. And my latest report showed 335 listings were reviewed last month. So, if that bothers you as much as it bothers me, then use my link in the description down below or scan the QR code here. That's jointdeleteme.com/davidlinin and use my code David Lin to get 20% off. Take control of your privacy today. What I've learned before is that insiders sell for all sorts of reasons. Maybe they want to buy a house, their kids have to go to college or whatever. But if you're dealing with millionaires and billionaires, they don't really need that cash for personal reasons. So, if they're selling, it's probably an indicator. And this wasn't I sold because I wanted to take advantage of this ever opportunity. It was I'm concerned. I'm de-risking. This was this was complete de-risking. >> Have you talked to any venture capitalists in this space? I wonder if capital is still there because if this might be a bubble, but if capital is still funding things and it'll continue growing. >> So I don't think the limiter on this one's going to be capital, David. >> Okay. >> I think increasingly you're going to see realworld constraints like like physical constraints. Um, again there's a there's a buildout schedule in the spreadsheets of all the analysts, right? It says, "Hey, if the cash is there, we're going to build these data centers." I think the cash is going to be there. The question is, is there enough land? Are there enough permits? Is there enough water? Is there enough memory chips? Is there enough capacitors? I think it's actually going to be physical limitations that are going to increasingly kind of bend that that buildout curve down. And we're we're actually seeing that. So again I I live now in Reno uh Nevada >> which is a has been a very data friendly environment sorry data center friendly environment >> we've actually now passed a moratorum on future data centers being built out for the time being in the city if Reno is putting Yeah. If Reno is putting limits on that a lot of other places in America are going to be following suit. >> Is it because of electricity costs water? >> Exactly. It's for all these physical con constraints. Nimism don't want it in my backyard. these things are allowed. >> Um, so again, I I don't I don't think it's it's >> going to collapse the buildout, but I think it's going to take it from 100% whatever it's being forecasted at, maybe down to 80, maybe down to 75, and that's going to be it's going to force a large repricing in the AI complex should that indeed happen. And I got to tell you, I've spoken to some AI engineers even here at this conference >> who say that that is a real risk. >> Does that make you more bullish on real estate? Does it make me more bullish on real estate? Um I mean yeah I mean I I think if you uh can identify where data centers need to go um >> converting old office buildings for example towers >> converting old office buildings that are you know easily connectable to the grid or whether it's you know you're finding land that that that a a major hyperscaler might want to build a data center campus on. >> Sure. But but they're all in competition with each other right now and the barriers are rising in terms of hey who actually wants one of those you know >> how do these constraints manifest in the markets like what how do we see signs of these constraints actually playing out here? Well, I mean there was big news what last week that uh was it Blackstone Black Rock Blackstone um pulled out of what was to be the largest data center >> in the country in the US, right? >> Um so they literally uh I I think the campus is like relatively built out. uh but they pulled out and then one of their other partners pulled out and so it's it's totally up in the air whether the country's largest data center is actually going to get lit up or not right now. Now eventually I'm sure it will >> but and again I'm I'm a believer in AI. I believe these data centers are going to get built. What I'm saying is I just don't think they're going to get built at the current pace that Wall Street is expecting right now because Wall Street generally thinks about it cap in terms of capital constraints. Yeah. Is the capital going to be there to do it? I think this time the capital is going to be there to do it. I just think there's going to be too many physical barriers to build it out at the rate that the capital is expected right now. >> So, as I checked a couple days ago, three of the Mag 7 stocks are down here to date. Is there a consensus on your show over whether or not this is a topping pattern here? >> Is there a consensus? Um, I don't know if I'd say there's a consensus, but I would say the majority of people that I interview are taking note and and seeing it as an important potential warning sign that the that the top could be behind us here, at least in the Mag 7 complex. >> Yeah. Um I mean it's one of the things that they are concerned about is the fact that you know for much of the past couple years market breath hasn't been great right and what's been driving the market it's been the mag 7 right it's it's been the hyperscalers now the hyperscalers are starting to lag you would think that they would pull the market down with them just given their size right but you've had these other AI components >> just become white hot right the semiconductor industry has just been on fire right but what that's doing is it's taking a narrow trade and making it even narrower and semis as you know are an incredibly cyclical industry. >> You know when do we hit the next part of the down cycle? No idea. But we know that a cyclical industry will go boom and bust. Um and so everything is now in riding on an increasingly sort of narrow pin if you will. And unless that capital that's all the froth that's currently right now in in the semis slushes back into the Mag 7, that froth may actually start exiting. and and I don't know what the next baton could be in the AI adjacent complex for that much capital to go into. So there is a lot of concern here that we are seeing like really late stage activity in this sector and it's so large I know you know this David but what it's >> AI and AI adjacent companies are 45% of the S&P market cap not not NASDAQ S&P >> so if that sector cools off it is literally going to take everything down with it >> it's it's fascinating because if you look at AI as an evolution of different technologies it's still relatively nent in the adoption curve >> and yet we're talking about the late stages in the capital markets segment. Why why why is there this disconnect between uh the development of technologies and the adoption of technologies and how how late we are in the cycle? >> Well, I think it goes back to what I was saying earlier. Every technology buildout from railroads to internet to to likely now, right, is you you don't know where >> too the line between too little and too much is. The only way you find it is by passing it and then realizing, okay, whoops, it's behind us now, right? >> Yeah. >> And so I think that's the process we're going in right now, which is okay, you know, tons of capital. Let's let's build. And then people realizing, you know what, >> we're not seeing the results, the performance results that we thought we were going to get from this. Companies start pulling their budgets a little bit. It cools off. You have kind of a a large correction, probably >> kind of a dieout of the 1.0 companies. Yeah. the infrastructure is still there. You have a couple maybe of those 1.0 companies like Amazon that that crosses the chasm and makes it uh but it's usually the second generations of companies that come in and build the sustainable businesses off the existing infrastructure. One thing that is potentially different this time is when you did that with railroads and you did it with the internet when you had that die off the infrastructure was all there and still 100% usable. So you still had the, you know, the the the iron rails for the railway. Yeah. >> Um you still had a bunch of dark fiber that could be lit up 5 10 years later. >> Yeah. >> With the data centers, it's a bit different. So you'll have the physical data centers there, but the chips, they kind of get antiquated within about 3 years. And so there's a there's a um going to be a lot of replacement of the the chips that are going into today's data center. And that cost is not insignificant. So the cost to kind of upgrade a data center is about twothirds the cost of building the data center. >> Unlike the fiber, once the fiber was laid, it just sat there and you didn't really have to maintain it. Same thing with the railway ties. >> So it's going to be a little bit interesting going forward that there might be sort of a a depreciation of the existing infrastructure that is a lot higher than what we've experienced in previous ones. And I haven't yet quite figured out how material that's going to be, but it is going to be different. It's it's not going to be as profitable for the 2.0 companies just to come in on top of, you know, any anyow resources that are lying there if we do go through that 1.0 die off. >> My my my counter to this discussion, if I may, is that tech companies will find a way to circumvent these hard constraints. And I just saw an ad from Anderil. They're deploying these modular uh small data centers that can be dropped into the middle of a battlefield. Yep. >> Because we need real time uplink on data. Um and so it's about the size of like from here to there >> like a 10 x 10 type. >> Yeah, exactly. And then like one person could set it up in 10 minutes and you know it's not meant to power a whole city block, but it's it's it's it's meant to be used on the go. So potentially we could see more developments on the uh on the portability front. Oh, I'm sure we will. And I mean, um, on the energy side, I don't know if you've been looking at what they're doing with like micro reactors and stuff like that. So, the ability the ability to get compute anywhere in the world and have it be sort of self-sustaining, I think it's going to be really amazing. I mean, there's, >> like I said, I'm not anti- >> AI. I think AI is going to be super transformative. >> Um, but there are going to be, you know, a lot of these these buildout constraints I mentioned earlier, but even in in your example, >> the lifetime of these things. So you plot that thing down in 3 years it might be sort of so antiquated in terms of its compute power versus what's available in the market then >> we're going to have a lot of jettisoning of of the infrastructure that's getting laid now in a way that we didn't have with fiber and with the railroads >> and so these concerns that your guests have talked about that you're talking about now do you do you personally agree with this? I I've always been curious what you agree with and what you don't agree with. >> Yeah, it's funny and I don't know if you have the problem I do, but I'll sit down we interview really smart people. >> Yeah, sure. Um, and I'll sit down with someone who's really bullish in their outlook. Yeah. And think, "Wow, that's really convincing." Like, I think I'm actually going to go buy some of what he was talking about, and then I'll interview someone who's pretty bearish, and I'll be like, "It was pretty convincing, too." So, it's it's hard not to get whipsed when you're sitting in our chairs. Um, but getting back to my punchline earlier, um, I have I I have these concerns again that not that the AI trade is dead and it's a false promise. I just think it's going through that that that common uh curve that we were just talking about of all of these technology buildouts where you basically have a zenith, you have a big corrective event, then you have the next generation of companies that go through there. I I I think we're if we're not at the zenith, I feel like we're pretty close. And so I think this is the time to >> take gains. >> Sure. >> Put on hedges. It's a time, I think, to become more prudent. We we've there have been phenomenal returns here >> and for a number of reasons. One, the ones I mentioned about about the complex itself, but two, on the greater macro side of things. So, um I just did an interview with Darius Dale. Um, Darius is one of the most >> I would say I mean a lot of my analysts that I interview are datacentric but few are as encyclopedic as as Darius is. And Darius has been a he's been a pretty consistent bull since the market bottom at the end of 2022. And he was one of the first that I interviewed to really put his neck out there and said, "I think we're at a turning point when everybody was expecting a recession back then." Yeah. My point is is he's been he's been not been afraid to be bullish when the herd wasn't bullish. And um he has just turned to being sort of short-term bearish expecting in his words uh a 1998 style market correction uh this year. And if you remember back in '98 there was the Russian debt crisis and um the markets basically dropped about 15% between July and October. and he's seeing a lot of signs uh kind of in the macro landscape and what's potentially happening with uh interest rates or at least with what the Fed's going to do. Um and um this is a bull who's basically battening down the hatches. Um, so when I start to see a confluence of convincing reasons for caution, um, the things I mentioned about AI, thinkers like Darius, especially guys that are not afraid to be bullish, starting to get a little bit more cautious. I just begin to say there's enough data points here that it's starting to convince me that the probabilities are weighing on this side. So again, um, I I it wouldn't surprise me if we finish this year kind of flat from where we are right now or potentially have gone through like a 10 to 15% correction. Yeah, Jeremy Grantham shares your view. He was on CNBC last week. Did you see that? >> Wonderful company to be included in. Did >> you see that clip? And he was getting roasted. Somebody called him out. Yeah, you're bearish. Because he's bearish on tech. He says within two years, that's what he said. We're going to see a big collapse of this bubble. And then he got called out. He said, "Yeah, you've been bearish for quite some time. You've been calling for the same thing. You're going to be right eventually like a broken clock eventually." That's what that's why that's what said live on CNBC. I know that was that was vicious. it. Well, it was especially for a guy who's as as worthy of respect as Jeremy. Now, I you know, I I I listened to a couple of other podcasts he did after that and and he says, "Look, I get it right and in many ways for investors, being too early is being too wrong." >> But I go back to the um and look, I'm not I'm not forecasting doom and gloom here right now. I think the probability is for like a 10 to 15% market correction between now and the end of the year. >> But, um I go back to um uh uh John Husman's famous quote. >> Yeah. >> Right. which is um when you're in a bubble, bubble markets force you to make a decision. >> Yeah. >> Look like an idiot now or look like an idiot later. >> I had a I had a fund manager on my show and he said something that for me cuts through the noise. He said, "Look, markets don't react to geopolitics or wars, at least not in the long term. I agree. >> They don't react to the Fed. They react to earnings. So ultimately, if we're going to get a continuation of good earnings into Q3 and Q4, then this bubble could get bigger." >> Absolutely. And for to be super clear folks, you know, I'm not predicting right now complete doom and gloom. >> Sure. >> And I've been telling a lot of people who are kind of leaning bearish, especially on the economy, like I don't see how the economy can go into recession when we're spending as much as we're spending in the AI capex space. Um, you know, which is what, like 800 billion this year or 1.1 trillion next year. Um, that combined with the government deficit spending at the level it's in. I'm like, look, as long as that flood, that tsunami of capital is getting pushed out into the economy, I don't see how you can have negative. >> Do you think it's possible for the government to print our way into a recession? Let me just explain what I mean by that. Uh guests on your show and some as well have been talking about how the money supply drives inflation. So if you if you just put the pieces together and think about it, if money supply continues to grow and in fact larger or faster than the economy can handle, doesn't that mean higher inflation? Doesn't that mean lower spending by the consumers? Doesn't that induce a recession? >> Well, so at the end of the day, uh what what matters is wage growth. >> Yeah. >> Right. So if wages are keeping up with or growing faster than inflation, it kind of doesn't matter what the inflation rate is, right? Um, so I think the answer largely depends on that and and you're getting into territory I talk about a lot here, which is a lot of people who are bearish will say, look at them. I mean, we've got this K-shaped economy. >> Yeah. >> The bottom leg of the K is way bigger than the top leg of the K and people are struggling, right? You look at uh the decline in personal savings rate. You look at the rise in in consumer credit delinquencies and now defaults, right? I mean, can't you see that the consumer is basically dying here? How can you not expect a recession to be coming at some point soon? And I say this with with all sensitivity. Um it's terrible to say, but like it almost doesn't matter how much the bottom leg of the K is struggling if the top leg of the K is still maintaining their spending in such a way that it keeps the averages in a healthy trajectory. >> And I think that's sort of where we are right now. Now you can get to a point where enough of the the bottom leg, enough people are suffering that it starts to overwhelm the top arm of the K. If the top of the top arm of the K starts struggling on their own, that changes the whole equation completely. Um and and the breaking point might not even be a financial one, right? It might not be um you know some sort of financial calamity that hits first. It could be a social one. It just could be enough people on the bottom leg of the cake cuz every everybody votes. That's the one thing people forget. Everybody's vote counts the same and there's a lot more people on the bottom leg of the K. And I think this is why we're seeing the political dynamics that we're seeing now in the US where all of a sudden, you know, democratic socialists, many who don't even use the democratic adjective anymore, just pure socialists, >> are beginning to win elections across the country. And it's because there's there's enough of that bottom leg of the K that says, "Look, you guys tell me capitalism is the answer, but it's not working for me. I got to try something different." So, I do worry more about increasingly basis what's happening society on that. >> Have you spoken to anybody that you know personally who leans more socialist and whether or not they actually understand some of the things they're voting for? Yeah, you you you forget that I just moved out of California, so I know a lot of people who who think like that. Yeah. Um this is a huge discussion. Um I'll try to just encapsulate it here, which is >> no, they they generally don't. And I think that the the thought process is very different. um the people that are espousing I think the policies that I'm guessing you and I would collectively vote for David they tend to do it from a an empirical basis we do that we run the numbers is this sustainable is this what you can build a sustainable economy on the socialist side it's either coming from a point of grievance right where somebody just is coming from emotion and saying look I'm hurting this isn't working for me I'm going to try something different um or it comes from a place of emotion This is just the way it should be. Everybody should have free child care. Everybody should have free education. Everybody should have a guaranteed job. Nobody should have to go hungry in retirement, which I think in a perfect world, yeah, we we we'd all agree with, but it's not like they're basing that on any sort of model or system. It's just a heart-driven passion cause for them. And so, it's a very emotional it's it's very emotional decision-m process. And this is basically how socialism has always come in in the past is you've had a disaffected group that gets really emotionally uh if you know feeling betrayed by the current regime and they let in the people that are promising solutions to to all their emotional rawness. And um what worries me is is when you hear about um if you learn about the Bolevik revolution, right, which led to Soviet uh communism in Soviet Russia, it's sort of similar. You see a lot of similarities to what's going on today. and and the Bolsheviks never had more than 30% popular support at any time in their history, >> but they were the ones that were um capturing the the the spirit and the anger of of the downtrodden classes at the start. They built enough momentum that by the time the rest of the country realized, you know what, I don't like the way these guys are conducting things. I'm not on board with these policies, it was too late. These guys had built enough critical mass in terms of their presence in the power structure that they had control of the enough of the key uh parts of the the political machine the state that uh it became impossible to stop that momentum. And I'm not saying that that's exactly what's going to happen here in the US. But I think the people that discount that from ever happening have not studied their history. And I think it's important to remember that throughout history, the people who have adopted Marxism, Leninism, Mauism, the first were the elites that attended the top universities and then study these ideals and then passed it on. >> So I've I've I've interviewed Peter Turchin. I don't know if you're familiar with his work, um, but he's got actually a formula for basically how societal collapse or at least regime change happens in countries. And he's got three key inputs. And one of them is excess elites. >> You have to have this class of people who are largely well educated, but they're they're finding themselves not participating in the wave of prosperity that the generation before them had. Yeah. >> And they start becoming really disaffected with that, but they're intelligent, good communicators. They can agitate and organize. And um what was interesting was of the countries that he studies, he doesn't study every country in the world, but of the countries that he studied, at the time I interviewed him, which was about 8 months ago, >> the US he said was at the top of his list of of ones that were kind of in the danger zone. >> Okay. Two years. >> Interesting to say that to a Canadian though, cuz I kind of look like you guys are ahead of us on a lot of these dimensions. >> I don't feel like that's a race I particularly want. >> You want to win. I know. And I don't want to catch up to you in it either as an American. Yeah. >> Yeah. Things are wacky in Canada. Um, >> but I but just just to underscore this, I I I really actually do worry about this that this is, you know, a defining theme of at least the next decade and and maybe the rest of yours and my life. I >> I worry about the declining labor force participation. And so, you know, over the last couple decades, it's risen uh primarily because women who were out of the labor force then joined the labor force. And then something happened which was that it plateaued about a decade and a half ago >> y >> and now I wonder how that's going to change with the advent of AI and that's going to have huge social ramifications not just economic ones if people just don't work. >> So I'm super glad to hear you bring this up. Um and it's a confluence of a couple things. Um I've interviewed Nicholas Everest. I don't know if you've had him on your program. If you haven't, I recommend you you you get him on. He wrote a book called Men Without Work. Okay. >> And it was basically talking about this phenomenon of the millions of healthy working age Americans. >> Yeah. >> Who have basically just checked out of the workforce. >> Um where they've they've just largely just kind of given up. And it's amazing uh how big this cohort is. It's amazing these people managed to kind of feed themselves and still persist. But through government support and parental support um they're able to kind of just just get on by. um and it's becoming this lost generation of workers and that that was happening pre-AI now you have AI right which has the which I completely am on board with um that uh you know to to displace labor at a much faster rate than we can find production productive alternative use for that labor right and and Kanes has a theory of meth of techn technological displacement which is if a if a machine can do a not better than a human, you should replace the human. But you got to be careful at the rate at which you displace human labor because if you're not putting it towards something else, you get the social problem, the social crisis, the cost of which is larger than the the benefits of the technology. Mhm. >> So I see a lot of danger of that and especially when you combine AI which gets smarter and smarter at an exponential rate with robotics, right, which begins to displace what unskilled labor can do or low-skilled labor can do. So as you have if as you have software that can, you know, wipe out a ton of increasingly white collar jobs and then you have robotics which can just blow out a lot of blue collar jobs. >> Yeah. I don't really know like like I I I get that yes AI is going to create a lot of other potential uh to create new jobs and and a lot of potential kind of for like the soloreneur like the guy who can basically create >> you know a worldclass company by programming a whole bunch of agents. So he's like the only employee of the company and it could be a huge company and he could be the the next trillionaire after Musk, right? Like I can see that potential, but that's a pretty small slice of the the bell curve of distribution of labor >> for that bottom 80 90%. >> I I I don't yet see what they're going to be repurposed as. And and I'm I'm open and I'm hoping that >> we'll just figure it out along the way. >> But in we you and I talked to a lot of people. I haven't heard an example brought up of like, well, this is what'll happen. This this is where you can put 20 thou 20 million service jobs. Right. >> Right. So that's what I worry about. >> What's one economic theme you're exploring on your show? And I'll share mine two years ago when I interviewed you at another conference in person. We had talked about how income inequality was your number one concern at the time. You talked a lot about that today >> and u >> and how that influences people to lean more socialist. >> Um besides that, Adam, any other themes you're exploring? >> Uh let's see here. Like >> bigger picture themes. >> Yeah, bigger picture themes. Um, >> there's one I spend a lot of time thinking about. Um, and I'm hesitant to mention it here because it's it's a little >> People have strong emotions on both sides. >> Um, >> but it's this clash between East and the West. So, I've got daughters, they're college age, >> um, and I'm increasingly thinking that, um, >> one of the defining themes of the rest of their lives, >> Yeah. is likely going to be sort of the fight for western civilization >> and it's tied to this this socialism versus capitalism uh struggle that we we talked about earlier but just in terms of like the values that that created the west um we have an increasing I think assault on them both by parties outside of the country but also inside the country you know a lot of the indoctrination if I can use that word, that's going on in our education system and things like that. It it's really teaching young American kids, young Canadian kids that, you know, we shouldn't be proud of the history that built the countries that we have today. And, you know, it's all about dismantling. I mean, honestly, in the US right now, you're having some candidates that have been elected in the past uh won primaries in the past couple of weeks who are literally saying, "I'm here to basically tear down Western civilization." >> So, um that's going to have all sorts of effects socially. How did it start? >> I don't want to put myself out there as an expert on this. Um >> I don't think anyone has one answer. >> Yeah. Yeah, I don't think any but but but just based on your observation, you know, you're you're you're observing and there's trends and you talked about education in the schooling system. Y >> there's trends now where um different educational departments and and institutions would start prioritizing hiring different races over others for professorship positions, >> right? >> And I I'm just curious to see how like that that even started >> started. I I I I I'm going to guess I think it sort of started with um and again folks I'm not an expert so I'm sort of speaking extemporaneously here but I think it started with the rise of of sort of Reagan's America where that was where there was sort of a resurgence of you know tried and trueue American values America shining city on a hill we we had gone through some tough times where America was starting to question itself >> and It it got back sort of national pride. Let's get back to basics. And I think the opposition at that time said, "All right, we lost, right? Reagan beat us. What can we change about our strategy?" And they started playing a long game, right? >> And they basically said, "Look, if we can start >> getting voters young, basically take if we take over the education system, >> we can influence how people will think the rest of their lives, right? and then we can get tomorrow's voters and we'll have a factory of future voters going forward. I think I think that was one path internally and I and I I don't have a lot of evidence for this. Yeah. >> But it's hard not to suspect that >> countries like China, like Russia would say would look at that and say, well, you know, if we can support that, >> we can basically make the capitalists do our work for us. we can we can convince them over time, over decades to dismantle the advantages that that they're using to beat us. >> Yeah. >> And so I think I think it's sort of a two-pronged approach here where you you you you had what started as an internal movement that then has gotten a lot of support from players outside who have realized it's a real pressure point where they don't need to commit a lot of money or or or do anything kinetic against us, but can still achieve the outcome, the long-term outcome they'd want. I I'll share with you something I'm thinking about that's really cool, Adam. Um is whether or not we need a free market to flourish. And I and I I I the one book that's been on my >> This is a great discussion, by the way. I didn't think we'd get this meta. >> No, no. I Yeah. Well, you talk to people about gold and the dollar all day, so I just go to Adam's channel if you want a discussion about that. So I I one book that's on my reading list is The People's Republic of Walmart. And a quick synopsis of the book is just Walmart being so big has a larger market cap and perhaps even revenue than some smaller countries. >> Sure. >> One could argue it structure operates like a command economy. >> Sure. >> And look how it's doing. I recently went to Asia where I witnessed firsthand the prosperity in Singapore and then I went to Korea and people are doing very well there in some ways with better infrastructure than North America. And you have to understand that Singapore is a dictatorship. >> South Korea was pretty much a military dictatorship throughout the 80s. And yet these two examples in China, I'm not even talking about China, that's more complex. But these two examples have lifted people out of poverty in just a few decades. >> Meanwhile, of course, you have Cuba and Venezuela and North Korea. The examples gone wrong didn't work, right? >> And the Soviet. So, I I I'm I'm trying to understand through my conversations and my reading why certain command economies have failed and others have flourished >> and whether there's something to be taught and learned here in the West. Be beyond the benevolence of the dictator, if you will, what what have you learned so far is a success factor? >> I I Ironically, these command economies have integrated at their core principle a free market structure, >> but just with a multi-deade plan. >> Yeah. >> And some government intervention to facilitate that plan. >> It's very interesting. It's kind of like forced free markets here. >> So in I do think there's something that the North American system can take from that. I'm not advocating for dictatorship, >> but is um >> this goes back to our conversation about capitalism and socialism. The the narrative for a lot of the people that are leaning socialists is capitalism's failed. >> Yeah. >> Right. It doesn't work. And I I feel like it doesn't work because I'm looking at my personal situation, the people around me. >> Yeah. >> And I I get it. In other words, I don't think our our version of capitalism is true free market capitalism as as as you and I would create on a p piece of paper if we were asked to to do this. >> You know, it's largely gotten co-opted in a lot of ways. Corporatism, crony capitalism, corporate bailouts, you know, all that stuff. And it has driven a lot of discussions at least with the folks that I've had my channel and it sounds like you're thinking similarly um is okay well look do you do you abandon the model and embrace the model that has a 100% track record of failure? No, that doesn't make sense. What you should do is you should go back to the model that has created more prosperity for more people in the course of human history and say how do we write it? Right? How do we fix the things about it that are broken? Right? >> And a large part of that is you know it's got to be based in free market capitalism. You've got to let you know creative destruction happen. >> You got to let malinvestment clear all the things that we're not doing right now. >> Yeah. >> And and so you need that, but you also need >> like FIFA, you need a playing a defined playing field. You need referees. >> Yeah. >> Right. And you know, right now a lot of our refs are, you know, sometimes incentive to look the other way. You know, some players are allowed to play by certain rules and other players aren't. And that's just because the rich and powerful are, you know, using that to their advantage. Um, so, you know, having sort of a a a minimal but fair and rigid set of regulations and enforcement, I think, is critical to success through the free markets. And it sounds like what you're saying is that's kind of what these benevolent dictators were doing. They were being the rigid enforcers. >> Right. Okay. Um, we're almost out of time. Uh, give us before we go one investment or asset class you do like. We talked about things that may be on the brink of rolling over something that's not at the zenith. >> Okay. Um, you're going to laugh just because you've mentioned it a couple of times here is what you can go listen to on my channel, but I think the precious metals >> may have bottomed here. >> Okay. >> I I I I think they've gone through that the froth has been removed that we saw earlier in the year. They then got um hammered down once Worsh came in and beat his chest and I'm gonna do whatever it takes to get inflation down. >> But in the process of that, one of the big So the froth had to come out. >> One of the things that was really pressing down on the neck of the precious metals were high oil prices. >> Yeah. >> As countries were forced to start selling their gold to afford the the higher oil prices, right? >> Oil has been coming down. As long as oil stays in this area or it goes down even further from here, at some point the precious metals really should those shackles really should start coming off. Um, and I think from a price action standpoint, it's really too early to call a bottom. I shouldn't, but the price action standpoint is actually really looking quite positive. >> Looking less frothy than a couple months ago. >> Yeah. The other thing I'd say too, just talking, you know, even though we're here at this conference, it's being talked a lot about here, a lot of the people that I've interviewed over the past couple months are just could not be more bullish on Copper's long-term prospects. >> Yeah, I've noticed that, too. >> And like I said, I can see that the AI trade might not continue at the the rate that it's currently forecasted to grow at, but it's going to get built out, and they're going to need a lot of copper to do that. >> Yeah. All right, Adam, great talk. Thank you so much. >> Hey, real pleasure. And if you're watching, folks, subscribe to this channel, The David Lin Report. >> Thank you. Where can we go to watch your stuff? >> Uh just go to thoughtfulmoney.com. Uh you can see all my uh content there. But also, if you'd like to get some help from a financial adviser in figuring out how to play some of these trends that David and I have talked about, you can schedule that for free. No obligations. They're just there to help you out. >> Interesting. All right. Thank you so much for watching. Don't forget to like and subscribe and follow Adam. Links down below.