AI Speed AI continues to develop globally at an extremely rapid pace. AI and LLMs are software-based, which means they can be iterated on, and updates can be deployed in real-time. It’s a challenge to keep up with even weekly AI-related developments. This talk from April 5th with Eric Schmidt is worth listening to. Here are a few takeaways: The…

Griffin on US Debt Last week, Ken Griffin, arguably the most powerful finance figure in the world, released his annual letter. The only market commentary he offered in the brief letter was his growing concern about US Debt and excessive spending. We’ve written about this: the cost of funding US interest rates has gone parabolic and is now at a…

AI Productivity Evidence Fed Chair Jerome Powell recently remarked, “AI should lead to increases in productivity.” US GDP growth has been surprisingly resilient lately at a 3.4% real rate. Generally, GDP growth can be divided into changes in population, productivity and debt. The positive take on AI-driven productivity is that there is incredible demand (spending) for AI productivity tools. Successful…

Positive Momentum The outlook on US markets remains surprisingly optimistic. I say “surprisingly” because it’s unusual to have such a prolonged increase in valuations without any dips or pauses. The consumer and the largest tech companies have successfully adjusted to life with higher rates. The concerns about a hit to earnings did not materialize, mostly due to layoffs and a…

We spent last week framing the ambitions, progress, practicalities and challenges of the green energy transition. This week, we are discussing how this framing translates to investing. The green energy transition market is small in the context of global investing. Small markets have more price volatility because consistent index flows do not support prices. Recall that over 50% of new…

Two influential green energy transition papers were published this week. At this point, parties on all sides agree that investments in green energy are necessary and urgent. Eventually, the sector will experience an economic tailwind that investors will want to take advantage of. The first paper is by Michael Cembalest of JPM, a long-time author of financial markets opinion pieces….

Berkshire Hathaway Annual Letter Over the weekend, Warren Buffett released the Berkshire Hathaway annual letter. Here is what stood out to me: Scale: Berkshire is the only fund of its kind, and its scale and impact is massive. The largest hedge funds in the world are around $120 billion, like Bridgewater Associates, run by Ray Dalio. Bridgewater is a diversified…

Disrupters, Adapters, Victims Generative AI has replaced interest rates as the top factor moving markets. It’s not a coincidence that OpenAI, Google, Meta, NVidia, Apple, Amazon and others originated in the US. US equity markets have been the dominant beneficiary of the AI wave to date, and that will likely continue. The wealth gap will widen as small elite tech…

NVDA Chips We don’t typically zoom in this far on a particular company, but I felt compelled to zoom in on Nvidia this week for a variety of reasons. Quick disclaimer: we may or may not hold shares in NVidia at any time. We may change our viewpoints at any given time. This is not advice. Nvidia has just 26,000…