May 13, 2025 • 46 mins
AI is everywhere right now. It’s writing emails, making playlists, and popping up in every “get rich quick” TikTok you scroll past. But when it comes to your hard-earned money, is this actually the smart place to invest… or just another hype train about to derail? In this episode, we’re breaking down what’s really going on with AI and tech shares and why throwing your savings at the next shiny thing might not be the wealth-building move it’s made out to be. Are you already too late for the big wins? Are tech giants like Apple, Amazon, and Nvidia still a safe bet? And how do you know if you’re investing for future-you… or just chasing financial FOMO?
In This Episode:
🤖 Why everyone’s suddenly obsessed with AI (and if you should be too?)
🤖 How to spot the difference between a smart investment and financial FOMO
🤖 What history’s bubbles (hello, dot-com crash!) can teach us about today’s hype
🤖 Why you don’t have to be early, you just have to be smart
NOTE: This episode was recorded before Trump announced changes to the chip export rules were on the way, so this is something we will be keeping our eyes on to see how it plays out!
LISTEN TO: Our Money Diary on working in tech... The Truth About Big Tech Money From Someone Living It
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hello, my name is Satasha Nabananga Bamblet. I'm a proud
or the Order Kerni Whaltbury and a waddery woman. And
before we get started on She's on the Money podcast,
I would like to acknowledge the traditional custodians of the
land of which this podcast is recorded on a wondery country,
acknowledging the elders, the ancestors and the next generation coming
(00:22):
through as this podcast is about connecting, empowering, knowledge sharing
and the storytelling of you to make a difference for
today and lasting impact for tomorrow.
Speaker 2 (00:33):
Let's get into it.
Speaker 3 (00:34):
She's on the Money, She's on the Money.
Speaker 4 (00:57):
Hello, and welcome to She's on the Money, the podcast
that knows. Investing in innovation sounds hot, but losing all
your money on hype is not.
Speaker 2 (01:05):
Are you getting fomo? An it was your delivery? Do
you like it was? Like you were questioning whether you
should say it or not. You're like, it is hot.
Speaker 4 (01:14):
It is not true because my whole life I've learned
that hype is exciting and fun. But I'm now learning, wow,
it's not hot. Are you getting fomo and feeling like
you should be investing in AI? Even if you're not
one hundred percent short it actually does. Or are you
wondering whether this is the next big opportunity or just
another tech bubble waiting to burst.
Speaker 2 (01:34):
Well, you're in luck because we're diving deep into the world.
Speaker 4 (01:37):
Of tech stocks and AI and what's real, what's risky,
and what you need to know before you drop your
savings into the next shiny thing. I'm excited your co
host here to ask, wait, what does that mean? So
you don't have to. I'm joined by the woman who
actually knows what she's talking about, Victoria Divine. Hi, Victoria, Hello, Beck.
I am as always budding into your intros. I do apologize,
(01:59):
but I am there very excited to talk about this.
I really wanted to do this episode because I get
so many dms from people being like should I be
investing in AI? And like, most of the time, I
don't mean to be rude. Do you even know what
AI is? Like obviously artificial intelligence, but like how does
it work? What does that mean? And if you were
going to invest into it, do you know what stocks?
Or have you just been watching TikTok's right? Like I
(02:21):
swear most of people's I guess investing knowledge comes from TikTok,
and that is so fine because same clean like.
Speaker 2 (02:28):
TikTok rules my life.
Speaker 4 (02:30):
But I think something that social media is really good
at is making us feel like we're missing out on something. Yeah,
oh yeah, how many times have you seen like one video?
You watched it like full, and then you just keep
getting served the same stuff, so you keep thinking, oh
my god, this is like the next big thing, But
it's actually just your algorithm picking up on what you
were interested in and serving you more of. It doesn't
(02:52):
necessarily mean it is a good thing, right.
Speaker 2 (02:55):
Not necessarily No, Yeah, that's see what you're saying.
Speaker 4 (02:57):
So let's start at the beginning of what actually makes
a company tech share because right now it feels like
every company is throwing around the word AI. So I
guess if we strip it all the way back, a
tech share or a tech company is a share in
a company whose core business is technology. So that could
be literally so many things. It could be software, it
could be hardware, it could be artificial intelligence, it could be.
Speaker 2 (03:20):
Cloud computing or robotics.
Speaker 4 (03:22):
And you guys probably have heard a lot of the
names before, but we've got things like Apple and Microsoft
and Navidia and Amazon and Meta that's Facebook, Beck and Alphabet,
that's Google, and Tesla. So we already know that these
things exist. You've heard of them. And sometimes I've just
listed off seven different companies Beck. Sometimes they're actually grouped together.
(03:46):
They specific seven, and they're called the Magnificent Seven because
of how much they actually dominate the US market, which
is kind of interesting when.
Speaker 2 (03:55):
You start to get into it.
Speaker 4 (03:57):
They actually make up so these seven shares make up
thirty five percent of the entire SMP five hundred. So
the SMP five hundred is a list of the top
five hundred companies in America, and they make up thirty
five percent of that, which I think is absolutely wild.
And since the start of twenty twenty three, they've actually
driven more than seventy percent of the entire market's returns.
(04:22):
So that's a lot of marketwight sitting on literally seven companies,
which is probably why people are genuinely so interested in
going should I be investing in this? Because like that
seems pretty dramatic, Like if you're telling me these seven
companies are driving seventy percent of the index's returns and
then also make up thirty five percent of the entire
(04:44):
SMP five hundred. Like, okay, right in twenty twenty five,
should we be doing that or if things taken a turn?
Let's see, I wonder if there's an ETF that just
is comprised of those seven companies. Yes, it's called the
SMP five hundred. No, just those seven, just those seven. Yeah,
it definitely is there.
Speaker 2 (05:01):
Definitely is.
Speaker 4 (05:02):
I thought you meant like of all of those and
I was like, babe, yes, that's why it's called the
SMP five hundred.
Speaker 2 (05:07):
It's actually very clear. I didn't steal what you say,
but no, I'm just kidding.
Speaker 4 (05:10):
So what's actually changed is just like the hype dying
down or something more. Okay, So in twenty twenty three
and twenty twenty four, I think everyone started getting really
excited about AI. It started to become something that you
were discussing at home as opposed to just Tesla. Like
remember when we were talking I don't know, maybe like
(05:31):
between twenty twenty and twenty twenty two about the self
driving car. Yeah, right, So it was all aspirational. It
was all stuff that you know, Elon Musk was doing.
It wasn't stuff that you could do a homeback like
you would just be like, that's so interesting. AI is
going to change the world. And then after chat gpt launched,
beck you could do it at home, like we've got
(05:51):
AI at homeback, And so what that meant was you
could start to see how impactful this was. Whether you
were using chat gpt to just answer a few questions
about maths or explain the share market to me, or
make this letter seem more professional. People started to really
believe in what AI could do, and they could literally
(06:13):
feel it.
Speaker 2 (06:13):
They could see it.
Speaker 4 (06:14):
They could see how this change was going to impact
the market or impact even their daily jobs.
Speaker 2 (06:20):
Like people started.
Speaker 4 (06:21):
Being like, oh am I going to be replaced because like,
you know, you could say to chat gpt, hey could
you write a really nice email, and like it could right.
So stocks like Navidia and Meta and Microsoft absolutely surged,
not because of their current earnings, but because people started
seeing that. People started going, oh AI is pretty cool,
(06:42):
and those companies are using AI pretty predominantly, like we've
spoken about recently, obviously chat gpt, but like Microsoft now
has co pilot and such. But investors are now asking
where's the revenue, where's the return? So all of this
urged because we were excited. But that's market sentiment, right, like,
(07:03):
oh my god.
Speaker 2 (07:04):
I want that.
Speaker 4 (07:04):
And if lots of people start buying one particular type
of asset, the market goes, oh, let's increase the price
because it's quite popular. But there's no increased earnings yet.
It's all just like hopes and dreams. I see, and
hopes and dreams don't pay the bills back. So people
start asking questions when the bills aren't getting paid really
quickly and going, hold on, where's the money in all
(07:27):
of this? And so now there was a report that
came out recently from the Bank of America and I
actually said, we expect AI to be transforming from a
tell me to a show me story, with any disconnect
between investments and revenue generation to come under intense scrutiny,
which I think is definitely happening. So now companies can't
(07:49):
just talk about innovation. They actually have to back it
up with results. Like Okay, before you could just launch CHATJPT.
Speaker 2 (07:56):
You'd be like, Wow, that's really cool. We've seen it.
Speaker 4 (07:59):
Now, so if you want to launch something similar, I'm
going to need to see some revenue. I'm going to
need to see some results Otherwise, that's.
Speaker 2 (08:06):
Not that interesting. Like, don't get me wrong, it's very
very interesting. I'm not being rude.
Speaker 4 (08:10):
I'm just talking from a investment mindset, right, So I
think there's just a lot up in the air because
people are now like, Okay, cool, so I invested in
this thing where am I returns chop shop?
Speaker 2 (08:23):
M you mean the same, right? Yeah, totally, totally.
Speaker 4 (08:27):
It kind of feels like there are lots of ups
and downs in the tech and AI sector. Oh absolutely.
I feel like it's like a little roller coaster. And
the tech sector obviously is incredibly powerful. We know that
that magic seven carry seventy percent of the returns, which.
Speaker 2 (08:42):
Is very interesting. But one of the reasons.
Speaker 4 (08:44):
Is because tech moves so quickly, and that's what makes
it really exciting but also really volatile. And volatility. The
word volatility, it literally just means the ups and downs.
So anytime someone says volatility, think of a roller coaster,
because it just is how much the share price of
something increases and then decreases, and then increases and then decreases.
(09:07):
And the more exciting that asset, the bigger and the
bougier the roller coaster. Right, So, like if you go
to the like to my friends, I've explained it like Disneyland, right, So,
like you go to Disneyland and that's the share market
and we go to the like kids section and you
get on the Teacups. Yes, and like that's kind of fun,
very expected, Like is something on the Teacup ride going
(09:28):
to happen that you weren't anticipating?
Speaker 2 (09:30):
Probably not. It's going to have been around, going to
do the job.
Speaker 4 (09:34):
Everyone's welcome, you can put your grammar on it, you
could put your three year old on it. Everyone's happy,
everyone's good. Then we're going to go to the other
side and we go into the wild West. Beck Okay,
going to the Wild West. Still in Disneyland, still is
share but we don't actually know what happens once you
get on that roller coaster because it's behind the thing.
You know, when you like see the Wild West ride
(09:54):
and all you see is the people coming out of
the top of the mountain and straight down into the water.
Speaker 2 (09:58):
Yeah yeah, yeah, yeah, but you can't.
Speaker 4 (10:00):
See how many ups and downs are before that. But
that's way more exciting. Yeah, that's very true. The more
exciting an asset, the more excited you are about seeing
something or going on the ride, the more ups and
downs you've got to anticipate.
Speaker 2 (10:13):
The teacup is maybe like cash. Yeah, teacup might be cash.
Speaker 4 (10:16):
It might be a little bit of a bond. Like
it's keeping as comfy. It's very predictable. I love Disneyland.
I love a Wild West ride. You know, I went
on the Giant Drop at Movie World when it was
a thing.
Speaker 2 (10:31):
Is the Giant Drop still a thing? I don't know.
Speaker 4 (10:32):
But I hate those ones. But I know exactly what
which one you're talking about. But you've got to expect
a lot of up and down in a lot of volatility.
So when we think volatility, we're thinking roller coasters.
Speaker 2 (10:43):
And if you want it to be an exciting.
Speaker 4 (10:45):
Roller coaster or an exciting asset class, it has to
go up and down and you've got to be prepared
for that. Yeah.
Speaker 2 (10:50):
Right, so we're getting prepared.
Speaker 4 (10:52):
But I actually spoke back to a money direst who
worked in tech only God, it was so interesting, literally
the amount of money people are making in tech.
Speaker 2 (11:00):
Click.
Speaker 4 (11:00):
If you've been thinking, maybe I need to change my job,
you probably should just go into tech. And while she
had a really great salary, like literally Beck, she had
like a salary of like three hundred thousand dollars plus
she was being issued shares and she was making about
half a million.
Speaker 2 (11:14):
Dollars is ish a year. Oh my god, that's insane.
Speaker 4 (11:16):
Ride. And she literally just worked her way up, like
she didn't have some fancy degree, Like she didn't do
a degree, but it wasn't the reason for her success anyway.
You can go listen to that money diary. Half her
team will literally laid off within.
Speaker 2 (11:30):
The first few months of her starting. Oh, like that's scary. Yeah.
Speaker 4 (11:34):
Like, So not only are the asset classes scary for
people purchasing them, but for the people working in them.
There's also a lot of volatility, and the same like
literally goes for stocks. You can like have a great
run and then you can lose a chunk of your
value in a couple of weeks. So I think, yeah,
let's think about Disneyland and the different types of rides
(11:54):
they have, And if you want to be in tech,
you've just got to be accepting that the rollercos is.
Speaker 2 (12:00):
A little bit more wild. You might have a bit
more fun, though that is the risky take. So if
we want to.
Speaker 4 (12:06):
Talk about I feel like Navidia I did a whole
podcast on this. But Navidia is a good example and
one that we've spoken about in the past. This company
has been I guess, the poster child for the AI boom,
Like everyone is talking about it, everyone being me and
everyone in the investing space. Maybe you haven't been talking
about it at your dinner table, but it was of
(12:28):
hot topic I guess in twenty twenty three, twenty twenty four.
Speaker 2 (12:31):
And the reason they.
Speaker 4 (12:32):
Have been I guess so popular is because they make
like little computer chips, and those computer chips are basically
the brains of all of the AI models, so like
chat GPT needs these chips to function, So obviously, with
the rise of people using chat GPT, the video is
going to increase in price. And even big tech company
(12:55):
is like open Ai and Microsoft and Meta, they were
buying Navidia's GPUs by the truckload to essentially power their
data centers. So that tells me that if all of
those remember the Big Seven, obviously Navidia is one of them,
but if the other companies in the Big seven are
purchasing from Navidio, you go, oh, someone's been cooking here,
(13:17):
Like what's going on? So naturally, Navidia's share price then
started to go through the roof, up over two hundred
percent at one point. Beck based mostly on what people
believed AI could become, not proof, just like they started
seeing the big dogs getting on the big rides and going, well,
if they're comfy, I want to be on the big ride.
Speaker 2 (13:40):
But it was all just belief because you were seeing
people walk the walk.
Speaker 4 (13:44):
But we hadn't heard much about revenue, we hadn't seen
a lot of income yet.
Speaker 2 (13:48):
It was all just this is the next big thing, Beck.
Speaker 4 (13:52):
But someone comes knocking and says, hey, are you paying
your bills? And you go, well, I haven't been paid
babies as sets yet, so you're going to start asking questions.
But obviously I'm on a little bit of a rant,
and I do apologize and you can ask the questions
in a hot second, but it does get a little
bit messy. So this like cossip podcast. Now are you ready?
So there's a Chinese company called deep Seek. You might
(14:12):
have heard about it, and it came out of literally nowhere,
and it launched a competitive AI model that used way
less GPU. So these chips, the power chips, it used
a lot less GPU power, meaning they needed less of
the chips, so everyone was like, oh, what is deep Seek?
How does that work? And that got investors really spooked.
(14:33):
So people started being like, oh my god, like I
just invested in this other AI thing. But now Deep
Seeks come out, and I feel like we all know
that the Chinese people are really, really smart, so when
something comes out of China, you go okay, like their
tech sector is really impressive. And suddenly people were asking
all these questions like have we just been over investing
in something that might actually not be necessary, like because
(14:56):
Deep Seeks come out and said, hey, our take use
this way less of these cheer and now we're all like, wait, wait, wait,
did we jump the.
Speaker 2 (15:02):
Gun a little bit?
Speaker 4 (15:03):
But now we are seeing the impacts and America has
a lot to do with this, but we're now seeing
the impacts of Trump's trade war. So he's the drama
like he is being drama and I don't appreciate it.
I don't think many people appreciate it. But on top
of his ridiculous tariffs at the time of recording, America
has also put export restrictions on high end chips going
(15:25):
to Chinah and then China were like absolutely not and
then they fired back by blocking exports of critical minerals
that are needed to make those chips. So like, good
luck making the chips if you can't get the minerals to.
Speaker 2 (15:38):
Make them grow. Yeah, that's what I mean. Like it's
a bit of a gossip podcast, and do you know
what that meant?
Speaker 4 (15:43):
So the result of that is that analysts believe I
do too after reading their work, but like they did it,
not me, but analysts believe Navidia is now sitting on
five point five get this, five point five billion dollars
worth of advanced chips it built for China, but they
can't sell without US government approval. Oh so they can't
(16:05):
sell GI Yeah, and.
Speaker 2 (16:06):
The government's like absolutely not.
Speaker 4 (16:07):
That's not leaving because we are the drama and we
are starting all of this shit anyway, that's obviously quite stressful.
But because this is going around and like Navidia hasn't
confirmed to this because it's like, you know, I'm not
going to confirm whether you cheated or not, Like it's
not going to happen. These are just analysts who are like, okay,
like we know what their production looks like, we're going
(16:29):
to guess how much they have in their stocks, so
five point five is the guest. But because that's being
discussed in the market, their stock has now fallen around
eighteen percent, so people are like, oh, that's true, that's stressful.
Like if Navidio is holding all of these chips and
can't sell them, like, that's not good, which means their
income is going to go down, And some of that
(16:51):
hype around how good Navidia is it started fade. People
just don't care as much anymore because they're like, h like,
Navidio can't even sell their chips, right, Like why would
you continue to invest in them? And investors are really
starting to ask, well, is this a short term bump
or should we be rethinking this whole thing long term?
Like should we be looking for other companies to invest
in because we like the idea of AI but like
(17:15):
there's a lot of political drama around this particular one,
so people are.
Speaker 2 (17:19):
Investing less into Navidia. Does that make sense? It does
make sense. It's a lot to take in. Yeah, I
feel like that's why I'm like, it's a gossip podcast.
Speaker 4 (17:28):
You need to understand all of the amsing cuts, and
I've got to give you the whole backstory absolutely, So
does this mean that Navidia is bad?
Speaker 2 (17:35):
Now?
Speaker 4 (17:35):
Not necessarily, But it depends on your investment style. And
I hate this question when people are like, oh my god,
should I buy this? And it's like, well, I can't
give you personalized advice. If I could, I would, but
I can't, so I won't. It depends on your investment style,
the time horizon that you have, so like how long
you're planning on investing for. And your tolerance for risk
goes back to Disneyland and like, I can't remember all
(17:57):
of the rides that are there, but you get my
vibe when I'm like, oh, would you go on the teacup?
Speaker 2 (18:01):
Beck?
Speaker 4 (18:01):
Right, I would happily go on go on the tea cup?
Would you go on the Giant Drop?
Speaker 2 (18:05):
I don't think. Yeah.
Speaker 4 (18:06):
So that's what risk is, right, So that's your tolerance
to risk. But it's in the share market. So you
might look at different shares and go, okay, well a
blue chip stock, I'm gonna buy that, no worries. But
now with all this additional information about Nvidia, would you
purchase that? So the question is not whether you should
(18:26):
or shouldn't. It's more around your personal situation and whether
you would be comfortable with it? Because remember how he
said I love the giant drop. Yeah, So like we're there,
the line is short. I go, Beck, do you want
to go on it with me? You go, no, absolutely not.
I'll wait here, I'll take a picture of you on it,
and I go on the ride. So can I tell
you whether you should go on the ride or not?
(18:47):
Because I like the ride?
Speaker 2 (18:48):
You go, but I.
Speaker 4 (18:49):
Don't like the ride V So that's what happens when
people ask me, Hey, should I invest in this?
Speaker 2 (18:55):
How do I answer that?
Speaker 1 (18:56):
I don't know?
Speaker 2 (18:57):
If you like rides? Do you know what I mean?
Speaker 1 (18:59):
Right?
Speaker 3 (18:59):
Right?
Speaker 1 (18:59):
Right?
Speaker 4 (19:00):
You need to work out your own tolerance to risk.
And once you do, and you can because I've done
episodes on risk tolerance and your investment risk profile, and
you can also google free investment risk profile and do
one online to work out what you would be able
to tolerate. Once you do that, you would get an
idea of whether you would want to invest. But I
(19:21):
think when it comes to Navidia specifically, they're a massive player.
Like in the AI space, they are going to be
a massive player, and they don't think with how much
market saturation they have they're going anywhere quickly. Their chips
are basically in every single major model out there at
the moment. Could that change maybe, but it would take
a long time and a lot of different companies making
(19:43):
a lot of big changes.
Speaker 2 (19:44):
To change that.
Speaker 4 (19:46):
They've got scale, they have dominance, and essentially I don't
think they're going anywhere anytime. But they are also under
so much pressure. Beck Can you imagine all of this
gossip coming out about you.
Speaker 2 (19:57):
I know, if you're Sam, you would be.
Speaker 4 (19:59):
Feeling the pressure, and essentially politically, economically and from competitors.
Speaker 2 (20:04):
They are feeling that heat.
Speaker 4 (20:06):
So if you are investing for the long term and
you believe that you want AI to be in your
investing portfolio because you believe in the future of AI infrastructure,
then this could definitely be an opportunity for you to
purchase some shares because they're down eighteen percent, And when
we see the share market down by eighteen percent, sometimes
(20:27):
we could be.
Speaker 2 (20:27):
Like, oh, it's on sale. Yes, I love a little discount.
Speaker 4 (20:31):
Like don't get me wrong, if you're going to go
to Disneyland, BIC, are you googling discount code on your tickets? Yeah, exactly,
And that's what a drop in the share market means.
So it's less I guess about the question of is
Navidia a bad guy, and more about whether it fits
your goals and your investing aspirations and your timeline, and
(20:52):
then how comfortable you are writing out that volatility. And
there are just some people who don't want to go
on the giant drop fair enough exactly, even if it's
something that could be perceived as like a bad purchase
or something.
Speaker 2 (21:04):
It's like, there's no way of telling what the future
looks like.
Speaker 4 (21:08):
So I know it's funny because like, as you know,
I get in the comments section on our videos on
TikTok and on Instagram, and I'm always replying to people,
and someone was like, well, I bought this and my
shares are down like ten thousand dollars over the last
few months, like essentially saying that it was a bad investment,
And I was like, oh, my goodness, Like that is
(21:28):
not like, yes, your shares are down over the last
few months, but like gazoom oush like you've got blue
chip stocks. The entire market is down at the moment,
we should be seeing it as on sale as those too.
Oh my investment's down and therefore it must be a
bad investment. The market is wild, she's dramatic. We need
(21:49):
to understand her to be able to deal with her
different moods. Essentially, yeah, absolutely, and just be patient with her.
So the video is under pressure right now so much
so like where's the opportunity now? Like where are investors
starting to look instand?
Speaker 2 (22:05):
I feel like.
Speaker 4 (22:05):
We're seeing a bit of a shift so like AI.
Now I won't say his household. Not everyone understands it fully,
but it's not as like ooh ah as it used
to be. Sure like now you're like, oh, yeah, I
understand the premise of chat GPT, Oh yeah, I understand
what deep seek is. But in twenty twenty three and
twenty twenty four, the I guess hype was all around
(22:28):
AI infrastructure, so like the chips, the servers, like the
cloud capacity, basically the building blocks that created AI. We
were like so excited about purchasing. But now the market's
really asking, well, who's making money using this technology? Like
we've built it that people have come. Who are the
(22:49):
people that are using it to make a lot of money?
Because we're seeing, you know, this system help us individually,
but surely they are really big companies that have found
ways to use AI to their advantage and are making
a lot of money. I would really like to invest
in those companies. Yeah, so that I feel like it
is quite smart. So who's making the money, So there's
(23:11):
more focus, I would say on the company's further down
the AI value chain side a thing. Let's call it
like the chain you've gone further down, like software players
or even industries applying AI in real practical ways. So
an example of that might be, you know, you might
find and this is my easiest example, like I have
(23:31):
a mortgage broking company. At the moment, I'm looking at
other mortgage broken companies using AI to help with a
lot of the like ADMIN processes, and I'm going, oh,
that's smart. Imagine if that was scalable, that could be
an investing opportunity here for me, because obviously I'm seeing
it individually in my business be really helpful. So let's
(23:53):
take a company Palenteer for example. Beck you might not
have heard of Palenteer before. They're not buildings, but they
are helping businesses and governments, which is important because governments
have lots of money. Taylor AI models using their own
data so even in this market downturn, their share price
is actually up sixteen or so percent this year, and
(24:16):
that's on top of the massive get this, three hundred
and forty percent gain they had in twenty twenty.
Speaker 2 (24:21):
Four, three hundred and fourty percent gain.
Speaker 4 (24:23):
That's a lot of gain. And they're landing some really
big deals. So they're landing big defense and government contracts,
including get this, the new US immigration deal, which is
worth thirty million dollars. So if people are seeing big
moves like that being made.
Speaker 2 (24:42):
I feel like we get our little ears up and
we're like, oh, what's going on over there?
Speaker 4 (24:47):
And they are talking about shifting their focus to the
commercial sector too, like they're going to look at healthcare
and finance, which is where we could see even more
upside because those industries obviously need a lot of help
but also very lucrative.
Speaker 2 (25:01):
Yeah.
Speaker 4 (25:01):
So I think that this is a really good thing
to look into because they're a company that are I
guess using AI and now people are looking at this
company going, you're not making AI, but you're using AI
and you're making.
Speaker 2 (25:15):
A lot of money. I want to be investing in you,
I see.
Speaker 4 (25:18):
Okay, So instead of just like big flashy AI companies.
There's more attention on the ones applying it behind the scene, Yeah,
which I think is low key, really smart. But I
feel like I have been ranting and I don't even
know how we got a Disneyland reference in there. But
let's take a really quick break back, and when we
come back, I'm going to dive into, after having a
(25:40):
little bit of a breather, into a part of the
AI world that.
Speaker 2 (25:43):
Doesn't seem to always get the spotlight.
Speaker 4 (25:45):
We're talking about the quiet achievers, the ones behind the
scenes helping power the future of AI.
Speaker 2 (25:51):
I would say, there's a spoiler here.
Speaker 4 (25:52):
The next big thing might not be a really nice, big,
shiny app It could actually be hiding in your electricity bill.
Oh bet you didn't see that coming. All right, welcome
back everyone. So before the break, Victoria dropped a.
Speaker 2 (26:07):
Bit of a juicy gem. I tried, was it Disneyland?
Speaker 3 (26:11):
It was?
Speaker 4 (26:12):
You know what many juicy gems in that case, and
one was Disney Like.
Speaker 2 (26:16):
Disneyland just makes it make sense.
Speaker 4 (26:18):
Yeah, that makes the fair and art sometimes going to
use the most rogue analogies and it really hits.
Speaker 2 (26:23):
It works.
Speaker 4 (26:24):
So does that mean I can claim my Disneyland trip
that I went on a few years ago on tax
I think I didn't, but I'm sure we can talk
to my accountant.
Speaker 2 (26:31):
Yeah, I think so.
Speaker 4 (26:32):
I think if you say any name of any product
you've bought this year on the podcast you claim it, yeah, iPhone, iPhone,
I phone, Google, Pixel nine, Pro Excel, that is a
text deductable, I will be talking to my accountant exactly.
So we were talking about the shift from hype to application.
You mentioned that it's not just the headline names investors
(26:53):
are watching. No, it's not, it's the behind the scenes guys,
possibly behind the scenes people. Okay, And we're seeing a
bit of a pivot from I guess backing the builders
like Navidia and the cloud giants to looking at who's
actually using this tech in a meaningful revenue generating way.
Speaker 2 (27:10):
So if you're making money, I am interested.
Speaker 4 (27:13):
And there's this whole other part of AI I would
call AI centrals. So we're talking utility companies, we're talking
energy providers and infrastructure players, the ones literally keeping the
lights on in the data centers powering all of this tech.
Some analysts, and you've probably heard whispers of people being like,
(27:35):
oh my God, don't use AI because you know, do
you know how many trees it costs?
Speaker 2 (27:40):
You've heard this.
Speaker 4 (27:41):
So some analysts are essentially saying that electricity demand from
data centers, which is where all of the AI is housed,
could double by twenty twenty six, which is wild when
you think about how many AI models we're running already,
Like we're already doing lots. You're saying there's going to
be double by twenty twenty six, and like that's next year. Beck,
(28:02):
So it's not just about the big, flashy names like
Navidia and Microsoft. It's essentially a whole ecosystem that works together.
The company's using AI in super practical ways and the
ones enabling it in the background. That's where we're starting
to see, I would say a little bit more market attention, right, Okay,
so here's the million dollar question. Yes, I feel like
(28:24):
this whole episode has just been trying to get you
to go against everything you say, which is I can't
give personal advice and please tell me you want personal
advice now, Okay, we'll sit down and I'll switch the
micro off. Yes, is this the next dot com bubble?
Speaker 2 (28:37):
Oh?
Speaker 4 (28:38):
Yeah, it could be. It absolutely could be. Do you
know what, when you say the dot com bubble, I
laughed so hard. Have you seen the interview where Jeff Bezos,
who does Amazon, He went to Harvard and like pitched
his idea for Amazon to all of these like NBA
students doing business at Harvard.
Speaker 2 (28:56):
You'd think they'd be really smart.
Speaker 4 (28:58):
And one guy said, look, just sell like Amazon worth
nothing at that point, because like it's never going to
take off, Like you are never going to be bigger
than bricks and mortar stores, like the shop down the
road already established, already has heaps of customers. You probably
should just throw the towel in. And that's coming literally
from him pitching to Harvard. How'd Amazon work out?
Speaker 2 (29:21):
Beck? Unfortunately it's quite big? Is it? Unfortunate for who?
Speaker 4 (29:26):
I mean a lot of people, but unfortunately not for
Jeff Bezos, right like he won. Unfortunately. Imagine being that
Harvard student. I know that was the one that was
like I told Jeff Bezos to drop Amazon anyway, I
thought that was funny. But the AI hype, I guess
is a lot like or has a lot of similarities
to what we actually saw when the Internet started to
(29:50):
become big in the late nineties.
Speaker 2 (29:53):
I was around in the late nineties.
Speaker 4 (29:55):
I was only privy to playing the Muppets video game
and the Barbie video game on my computer at a
designated time that my parents let me.
Speaker 2 (30:03):
So a lot of the stuff that I've learned.
Speaker 4 (30:05):
About the dot com bubble is actually through my own research,
not experience, and I've done a lot. But when the
Internet was the hottest new thing back, investors started essentially
throwing money at anything that had a dot com name, right,
So like investors were like, oh, you're on the internet,
take my money. Literally, companies didn't even need to be
(30:25):
profitable or prove themselves, and some of them didn't even
have revenue yet, and investors were like, take my money.
It's fine, I believe in this. But because the Internet
felt like the future, spoiler actually was people didn't want
to miss out. They were like, oh, my god, this
is going to be the next big thing, and they
weren't wrong. But the problem with that is that those
(30:45):
businesses didn't have actual business models. So like people weren't
wrong when able to identify that, you know, the Internet.
Speaker 2 (30:53):
Was going to be the next big thing. That's pretty sexy,
that's pretty.
Speaker 4 (30:56):
Exciting, but they did get off track when picking the
right companies to invest in. I mean investing in a
company with no revenue. It's not for me, sure, but
we need to do our research. But most of those
businesses didn't actually have business models. They were burning through
cash with absolutely no clear plan to turn a profit.
Speaker 2 (31:14):
They were just like, let's spend lots of money, we
have lots of.
Speaker 4 (31:16):
Investors, yay, And that was like their entire strategy. So
when reality finally caught up and interest rates then rose,
investors started asking questions. They were like, Hi, we invested
in your company, where's the revenue And they were like, Lol,
there isn't any And that's when it all collapsed. Ah okay, okay.
(31:37):
So this is what the dot com bubble was built on,
right belief. It wasn't just built on facts and like
looking into okay, well this company sells X and it
supplies why and because of this, I think it's a
good investment. They were just like, my hopes and dreams
are feeling good. I'm going to invest. But when the
Nasdaq dropped more than seventy five percent, it took fifteen
(32:00):
years to crawl back. Whoa like it did crawl back.
That's really important to point out it did eventually crawl back,
and that's why we are long term, long domestics exactly, right,
But like that's fifteen years.
Speaker 2 (32:11):
That's crazy.
Speaker 4 (32:13):
So now fast forward twenty five years, we've got another
revolutionary tech which was a mouthful, but that's AI with
lots of excitement and some I would say spicy evaluations.
So the difference is back that this time it's not
really scrappy startups that are just chucking a dot com
name and just going, hey, you could invest in.
Speaker 2 (32:34):
Us with the future.
Speaker 4 (32:35):
It's actually the biggest most profitable companies already existing in
the world.
Speaker 2 (32:39):
Right.
Speaker 4 (32:40):
It's Microsoft, it's Alphabet, it's Navidia, and they're dropping hundreds
of billions of dollars into AI research and development and infrastructure,
like very serious money. Like they are just you know,
floating on hopes and dreams, and I mean that's distelling
it down, but you know exactly what I mean when
I say that.
Speaker 2 (32:59):
So, yeah, we're seeing some type of correlation.
Speaker 4 (33:03):
Navidio is down eighteen percent this year, Tesla has been
cut in half as what should be. But unlike the
dot com days, these companies have real products back, real
legitimate products, real customers and real revenue, and you're probably
going to go, well, is that really risky? Like still
like you're saying that these are real, Like is the
(33:24):
risk the same, Well, the risk is not necessarily that
it's super risky, but it's that history doesn't repeat itself,
but it can sometimes rhyme. A lot of the optimism
around AI is still based on hopes and dreams and
what it might do, not what it's doing right now. Okay,
(33:45):
so like we're still really optimistic about oh my goodness,
it could potentially xyz. So if the money doesn't start
flowing soon from what's being invested by these big companies
into research and development and all of the infrastructure, I
think that the market could definitely cool off. And maybe
I think the biggest takeaway we can get from the
(34:06):
dot com bubble as it's called, is that the Internet
did change everything, like just not in the timeframe that
everybody expected it to do. Like the right idea, I
guess at the wrong time can still cost investors.
Speaker 2 (34:21):
A lot of money, sure, for sure.
Speaker 4 (34:23):
So like remember when we were younger and they were like,
the future is going to have flying cars? Like yeah, probably,
but like what is required to create those flying cars,
you know, right right right, I have to really quickly
be honest with about sang. I said dot com bubble before,
and I didn't know what it meant, and now keeps
and I thought I'll be able to figure it out
as you talk, and then I couldn't figure it out,
(34:44):
and it's far too.
Speaker 2 (34:46):
Late for I love you. You are literally the best.
Speaker 4 (34:49):
So the dot com bubble was when the Internet like
really started to launch and a whole heap of companies
started launching on the Internet, and people got really excited
abou about it and started investing a lot of money
got into it because they were like, the Internet's the
next big thing. And beck, I think you and I
can agree that, yeah, the Internet was the next big thing,
like it changed everything, But these companies just existing on
(35:12):
the Internet didn't necessarily mean that they were the next
big thing. Yes, Like if you and I'm going to
just steal this down really simply, like if you invested
in a fashion company online and you're like, oh my god,
next big thing is the Internet, and I love fashion,
so I'm going to invest in this fashion company, like
that doesn't mean it was a good fashion company, right, Like, yeah,
they were on the Internet, and if they'd made use
(35:35):
of that opportunity and been one of the first to
market that fantastic, they would have been really good, like
eBay or Amazon. But lots of companies were jumping up
and down about the fact.
Speaker 2 (35:44):
That they just existed on the Internet and.
Speaker 4 (35:46):
They didn't have real revenue, they didn't have real profits,
they didn't have a lot of product, but they had
hopes and dreams.
Speaker 2 (35:51):
Gotchah okay okay, And that's.
Speaker 4 (35:53):
What drove a lot of investment during that period of time.
But that investment, again was built on hopes and dreams
and wishes, and like, wishes isn't money. So for at
some point when people were like, hey, I need to
pay the bills, I'm looking for this revenue. Now I
invested in this thing, like where's the dollars? People started
(36:14):
to see that maybe they couldn't back themselves, and therefore
it dropped and it crashed, and reality kind of came to.
Speaker 2 (36:22):
The table unfortunately, as it always does.
Speaker 4 (36:24):
Literally right, So I reckon, Yes, the Internet did change everything.
So I guess when it comes to ai Beck, it's
not just all about betting on what we think the
next big thing is. I think we can all agree
that AI is definitely one of the next big things.
It's actually about understanding whether the business model behind the
thing you want to invest in behind it is actually
(36:46):
going to stack up.
Speaker 1 (36:47):
Yeah.
Speaker 4 (36:47):
Okay, So how do we even start, like thinking about
investing in tech without getting burned? Good question, because I
guess tech is very exciting and it moves very quickly.
It's literally changing the way that we live and work,
and some of the biggest success stories in history have
come out of this sector. So I think that's why
people still talk about it so much. I think that
if I said name a sector in investing, the first thing,
(37:10):
you'd probably say tech sector, like easy, like. I think
most people just go to that because that's where most
of the returns have come from. But it's also relatively risky.
So when we're looking at investing in tech or in
AI in particular, I've got a list and I've just
written it down. So are you really Yeah. So there's
a few things I want you to keep in mind.
(37:31):
The first one is hype does not equal profit, So
just because you're excited about it doesn't mean they're making money. Yeah,
It's like, do you remember when I was ranting on
about after pay shares ages ago, people were like, I
invested in after pay and it's just going up and
up and up, and I was like, they have no revenue.
Speaker 2 (37:46):
This is going to crash. And then it crashed and
I was like, what a surprise, that's crazy. Who have
seen that going?
Speaker 4 (37:52):
But just because a company is trending or dropping buzzwords
like quantum ai, cloud infrastructure, that doesn't actually mean it's
making money bick. They just have a fancy shiny word.
So always check the financials. Is it profitable? Does that
have revenue growth? Is it burning cash? Do you know
what you can do? You can gain the system.
Speaker 2 (38:11):
Okay, you can ask chat GPT.
Speaker 4 (38:13):
If a company is profitable, you can ask chat GPT like,
can you please look at the financials and let me
know if it's got year on year revenue growth. You
don't even have to look at the proper financial report.
You can give the financial report to chat GPT and
she can explain it to you. I've also decided that
chat GPT girl, oh yeah for sure. Yeah, definitely giving
(38:34):
female vibes. Yeah, I'm feeling that anyway. The next thing
number two on my list follow the value chain that
sounds lame, but like hear me out, not every win
in AI is going to come from the loudest players. Yes,
like Navidia and Microsoft in the spotlight and have lots
of money and keep throwing it at that. They're also
(38:55):
really good at a press release. So like, when you're
really good at something and you have a lot of money,
you're going to have the right amount of money to
pay pr so that people are talking about you consistently,
really nicely. But I want you to start looking at
the software companies applying AI in real ways, even the
company is powering the infrastructure like utilities or like the
(39:16):
chip manufacturers, Like I think that there's probably some very
real money there to be made. The third thing I've
written down, I don't think you're going to be surprised.
Diversification is your bestie. That's so true in every Yeah.
Speaker 2 (39:30):
Literally, like don't go all in on one stock.
Speaker 4 (39:33):
Like how many times do I have to jump up
and down about how sexy I think ETFs are?
Speaker 2 (39:38):
Why diversification?
Speaker 4 (39:39):
How you would never just own one stock in general,
So like, if you're going to invest in AI, why
are you picking one AI stock if you think it
is so important? Let's get a bunch of them. So
tech is volatile. We know that it is the biggest
loop de loop bride at Disneyland. So if you want
exposure to that sector, maybe consider spreading it a across
(40:00):
a few different tech companies, or maybe pick an ETF
that has those companies in it, or a mix of
hardware and then software and then like infrastructure place.
Speaker 2 (40:10):
Sure, so we're mixing it up.
Speaker 4 (40:11):
We're making sure that instead of just putting flour in
the bowl, we are putting lots of different ingredients like
eggs and sugar and a lot of butter because we
want to make a cake, baby, Like, I don't want
a bowl of flour that's been through the oven. I
want a cake.
Speaker 2 (40:26):
Absolutely.
Speaker 4 (40:27):
The fourth thing and I only have five, so we're
coming to the end of my list. But the fourth
thing is I want you to know your strategy. Like
I asked before if Beck would go on the Giant
drop and she said no, I want you to be
that clear on what you would and wouldn't invest in.
So AI and tech can be classic high risk, right,
high risk, high reward to play if you're in it
for the long game and you actually believe in where
(40:49):
tech is heading. A little bit of turbulence just comes
with the territory, like that's how it works.
Speaker 2 (40:56):
But if it's.
Speaker 4 (40:57):
Money that you need in I would say the near future.
Maybe if you're like, oh what do I do with
my house deposit? Or I've got a wedding coming up?
Should I be investing this mass amount of money or
maybe even your emergency fund? That is not the place
for this, like absolutely not. Make sure that your strategy
matches your timeline and your goals and.
Speaker 2 (41:16):
Your peace of mind. Right.
Speaker 4 (41:18):
And then the last thing I've written down here is
not every good idea makes a good investment, and I
think that is really important to remember. Just because it's
a good idea doesn't mean it's going to be profitable.
Doesn't mean that you should be investing in it. The
dot com bubble or the dot com bust didn't happen
because the Internet was a bad idea.
Speaker 2 (41:40):
Was the Internet a bad idea back? I don't think so.
I think it's pretty slay great idea.
Speaker 4 (41:45):
It happened because investors through a lot of money at
companies that weren't profitable or proven. AI might absolutely be
the future, but it doesn't mean that every single AI
stock is a goodbye. Like, just because people are playing
in the AI space and they're listed doesn't mean you
should be buying them. The lesson here, I think is
look for solid business models, not just shiny buzzwords. Okay, okay,
(42:09):
they can't just.
Speaker 2 (42:09):
Talk the talk.
Speaker 4 (42:10):
They also have to be walking a walk. If you're
not making money, I'm just not that interested in you.
Yeah enough, like low key rude like in the shed market, beck,
yeah we're marrying rich.
Speaker 2 (42:20):
Oh not just the guy who looks rich?
Speaker 4 (42:22):
Yeah yeah right, so right, So if someone's listening and
thinking like do I need to jump on the AI
train for it leaves the station?
Speaker 2 (42:29):
What do you want them to remember?
Speaker 4 (42:30):
Literally all of the stuff I just said about Disneyland.
But like, you don't need to be in on every
single trend to build wealth. Like if you're looking at
AI and you're like, oh, this is the future, Like, babe,
those shares are still going to increase in the future.
If that's the case, yes, you might be getting on
at a different station than everybody else.
Speaker 2 (42:48):
And yes, some other people might make a little bit
more money than you.
Speaker 4 (42:52):
That makes sense because they got on the train really
early and they get alonger ride, and that's fine. That
doesn't mean you're right, is any less valid, You're still
going to the same destination. So I think importantly tech
and AI can absolutely be part of your portfolio. It
is just so important to make sure it fits your
goals and your timeline and what you want to do,
(43:14):
and making sure that you're okay with the fact that
you're going to have a little bit of that volatility
along the way, like it's going to go up and
it's going to go down because investing at its crux
is a roller coaster and if you don't like roller coasters,
don't go to the theme park.
Speaker 2 (43:29):
Fair fair call.
Speaker 4 (43:31):
So I think that's actually a perfect thought trap this up.
So if you've got a mate who's been texting you
screenshots of AI stock charts and see I'm also sending
my friends screenshots of stock charts, well you're the problem.
I am the problem, and they asking, like, you know,
should I buy this? Maybe flick them this episode instead? Oh?
Should I send this to myself yourself? Don't get me wrong.
(43:51):
As much as I can tell you exactly what you
need to be doing, I've been down in the video wormhole,
like I go down that rabbit hole on a regular
basis and to make ooh what's this?
Speaker 2 (44:00):
Oh what's that? I want to look?
Speaker 4 (44:02):
And then I send texts to my also investing friends
and I'm like, what's this look like? What are your
thoughts on? And they think I'm de Lulu and spend
too long in financial reports when you could just stay
our ski But that's okay, that's a story for another day.
So if you're here, still, thank you. We love you,
and I adore talking about investing and giving you as
(44:22):
much investing knowledge as possible. But a way to get
more investing knowledge is for you to hit follow and
actually subscribe to our show for two reasons. Right First,
you won't miss an episode, which I think is very
important because I would love to see you again. But
also it really supports our show. So if you are subscribing,
you are following us. It means that the algorithms more
(44:43):
likely to push it to other people who might enjoy
our content, which I would really appreciate.
Speaker 2 (44:47):
Like, we want more friends back, so obviously we.
Speaker 4 (44:50):
Have a whole heap more deep dives, financial hot takes,
and all of the juicy stuff coming your way.
Speaker 2 (44:55):
And if you're feeling extra generous leave us a five
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Speaker 4 (44:58):
We help those two love those It really helps more
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Speaker 2 (45:05):
Cozy and on Friday episodes.
Speaker 4 (45:08):
I also read one of our warm and Fuzzy five
star reviews to the team true, so feel free to
stroke Beck's ego a little bit more in those Yeah,
I wouldn't hate it be Elida Guys BI Guys did
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Speaker 2 (45:28):
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Speaker 2 (45:44):
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Hello, my name is Satasha Nabananga Bamblet. I'm a proud
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(00:22):
through as this podcast is about connecting, empowering, knowledge sharing
and the storytelling of you to make a difference for
today and lasting impact for tomorrow.
Speaker 2 (00:33):
Let's get into it.
Speaker 3 (00:34):
She's on the Money, She's on the Money.
Speaker 4 (00:57):
Hello, and welcome to She's on the Money, the podcast
that knows. Investing in innovation sounds hot, but losing all
your money on hype is not.
Speaker 2 (01:05):
Are you getting fomo? An it was your delivery? Do
you like it was? Like you were questioning whether you
should say it or not. You're like, it is hot.
Speaker 4 (01:14):
It is not true because my whole life I've learned
that hype is exciting and fun. But I'm now learning, wow,
it's not hot. Are you getting fomo and feeling like
you should be investing in AI? Even if you're not
one hundred percent short it actually does. Or are you
wondering whether this is the next big opportunity or just
another tech bubble waiting to burst.
Speaker 2 (01:34):
Well, you're in luck because we're diving deep into the world.
Speaker 4 (01:37):
Of tech stocks and AI and what's real, what's risky,
and what you need to know before you drop your
savings into the next shiny thing. I'm excited your co
host here to ask, wait, what does that mean? So
you don't have to. I'm joined by the woman who
actually knows what she's talking about, Victoria Divine. Hi, Victoria, Hello, Beck.
I am as always budding into your intros. I do apologize,
(01:59):
but I am there very excited to talk about this.
I really wanted to do this episode because I get
so many dms from people being like should I be
investing in AI? And like, most of the time, I
don't mean to be rude. Do you even know what
AI is? Like obviously artificial intelligence, but like how does
it work? What does that mean? And if you were
going to invest into it, do you know what stocks?
Or have you just been watching TikTok's right? Like I
(02:21):
swear most of people's I guess investing knowledge comes from TikTok,
and that is so fine because same clean like.
Speaker 2 (02:28):
TikTok rules my life.
Speaker 4 (02:30):
But I think something that social media is really good
at is making us feel like we're missing out on something. Yeah,
oh yeah, how many times have you seen like one video?
You watched it like full, and then you just keep
getting served the same stuff, so you keep thinking, oh
my god, this is like the next big thing, But
it's actually just your algorithm picking up on what you
were interested in and serving you more of. It doesn't
(02:52):
necessarily mean it is a good thing, right.
Speaker 2 (02:55):
Not necessarily No, Yeah, that's see what you're saying.
Speaker 4 (02:57):
So let's start at the beginning of what actually makes
a company tech share because right now it feels like
every company is throwing around the word AI. So I
guess if we strip it all the way back, a
tech share or a tech company is a share in
a company whose core business is technology. So that could
be literally so many things. It could be software, it
could be hardware, it could be artificial intelligence, it could be.
Speaker 2 (03:20):
Cloud computing or robotics.
Speaker 4 (03:22):
And you guys probably have heard a lot of the
names before, but we've got things like Apple and Microsoft
and Navidia and Amazon and Meta that's Facebook, Beck and Alphabet,
that's Google, and Tesla. So we already know that these
things exist. You've heard of them. And sometimes I've just
listed off seven different companies Beck. Sometimes they're actually grouped together.
(03:46):
They specific seven, and they're called the Magnificent Seven because
of how much they actually dominate the US market, which
is kind of interesting when.
Speaker 2 (03:55):
You start to get into it.
Speaker 4 (03:57):
They actually make up so these seven shares make up
thirty five percent of the entire SMP five hundred. So
the SMP five hundred is a list of the top
five hundred companies in America, and they make up thirty
five percent of that, which I think is absolutely wild.
And since the start of twenty twenty three, they've actually
driven more than seventy percent of the entire market's returns.
(04:22):
So that's a lot of marketwight sitting on literally seven companies,
which is probably why people are genuinely so interested in
going should I be investing in this? Because like that
seems pretty dramatic, Like if you're telling me these seven
companies are driving seventy percent of the index's returns and
then also make up thirty five percent of the entire
(04:44):
SMP five hundred. Like, okay, right in twenty twenty five,
should we be doing that or if things taken a turn?
Let's see, I wonder if there's an ETF that just
is comprised of those seven companies. Yes, it's called the
SMP five hundred. No, just those seven, just those seven. Yeah,
it definitely is there.
Speaker 2 (05:01):
Definitely is.
Speaker 4 (05:02):
I thought you meant like of all of those and
I was like, babe, yes, that's why it's called the
SMP five hundred.
Speaker 2 (05:07):
It's actually very clear. I didn't steal what you say,
but no, I'm just kidding.
Speaker 4 (05:10):
So what's actually changed is just like the hype dying
down or something more. Okay, So in twenty twenty three
and twenty twenty four, I think everyone started getting really
excited about AI. It started to become something that you
were discussing at home as opposed to just Tesla. Like
remember when we were talking I don't know, maybe like
(05:31):
between twenty twenty and twenty twenty two about the self
driving car. Yeah, right, So it was all aspirational. It
was all stuff that you know, Elon Musk was doing.
It wasn't stuff that you could do a homeback like
you would just be like, that's so interesting. AI is
going to change the world. And then after chat gpt launched,
beck you could do it at home, like we've got
(05:51):
AI at homeback, And so what that meant was you
could start to see how impactful this was. Whether you
were using chat gpt to just answer a few questions
about maths or explain the share market to me, or
make this letter seem more professional. People started to really
believe in what AI could do, and they could literally
(06:13):
feel it.
Speaker 2 (06:13):
They could see it.
Speaker 4 (06:14):
They could see how this change was going to impact
the market or impact even their daily jobs.
Speaker 2 (06:20):
Like people started.
Speaker 4 (06:21):
Being like, oh am I going to be replaced because like,
you know, you could say to chat gpt, hey could
you write a really nice email, and like it could right.
So stocks like Navidia and Meta and Microsoft absolutely surged,
not because of their current earnings, but because people started
seeing that. People started going, oh AI is pretty cool,
(06:42):
and those companies are using AI pretty predominantly, like we've
spoken about recently, obviously chat gpt, but like Microsoft now
has co pilot and such. But investors are now asking
where's the revenue, where's the return? So all of this
urged because we were excited. But that's market sentiment, right, like,
(07:03):
oh my god.
Speaker 2 (07:04):
I want that.
Speaker 4 (07:04):
And if lots of people start buying one particular type
of asset, the market goes, oh, let's increase the price
because it's quite popular. But there's no increased earnings yet.
It's all just like hopes and dreams. I see, and
hopes and dreams don't pay the bills back. So people
start asking questions when the bills aren't getting paid really
quickly and going, hold on, where's the money in all
(07:27):
of this? And so now there was a report that
came out recently from the Bank of America and I
actually said, we expect AI to be transforming from a
tell me to a show me story, with any disconnect
between investments and revenue generation to come under intense scrutiny,
which I think is definitely happening. So now companies can't
(07:49):
just talk about innovation. They actually have to back it
up with results. Like Okay, before you could just launch CHATJPT.
Speaker 2 (07:56):
You'd be like, Wow, that's really cool. We've seen it.
Speaker 4 (07:59):
Now, so if you want to launch something similar, I'm
going to need to see some revenue. I'm going to
need to see some results Otherwise, that's.
Speaker 2 (08:06):
Not that interesting. Like, don't get me wrong, it's very
very interesting. I'm not being rude.
Speaker 4 (08:10):
I'm just talking from a investment mindset, right, So I
think there's just a lot up in the air because
people are now like, Okay, cool, so I invested in
this thing where am I returns chop shop?
Speaker 2 (08:23):
M you mean the same, right? Yeah, totally, totally.
Speaker 4 (08:27):
It kind of feels like there are lots of ups
and downs in the tech and AI sector. Oh absolutely.
I feel like it's like a little roller coaster. And
the tech sector obviously is incredibly powerful. We know that
that magic seven carry seventy percent of the returns, which.
Speaker 2 (08:42):
Is very interesting. But one of the reasons.
Speaker 4 (08:44):
Is because tech moves so quickly, and that's what makes
it really exciting but also really volatile. And volatility. The
word volatility, it literally just means the ups and downs.
So anytime someone says volatility, think of a roller coaster,
because it just is how much the share price of
something increases and then decreases, and then increases and then decreases.
(09:07):
And the more exciting that asset, the bigger and the
bougier the roller coaster. Right, So, like if you go
to the like to my friends, I've explained it like Disneyland, right, So,
like you go to Disneyland and that's the share market
and we go to the like kids section and you
get on the Teacups. Yes, and like that's kind of fun,
very expected, Like is something on the Teacup ride going
(09:28):
to happen that you weren't anticipating?
Speaker 2 (09:30):
Probably not. It's going to have been around, going to
do the job.
Speaker 4 (09:34):
Everyone's welcome, you can put your grammar on it, you
could put your three year old on it. Everyone's happy,
everyone's good. Then we're going to go to the other
side and we go into the wild West. Beck Okay,
going to the Wild West. Still in Disneyland, still is
share but we don't actually know what happens once you
get on that roller coaster because it's behind the thing.
You know, when you like see the Wild West ride
(09:54):
and all you see is the people coming out of
the top of the mountain and straight down into the water.
Speaker 2 (09:58):
Yeah yeah, yeah, yeah, but you can't.
Speaker 4 (10:00):
See how many ups and downs are before that. But
that's way more exciting. Yeah, that's very true. The more
exciting an asset, the more excited you are about seeing
something or going on the ride, the more ups and
downs you've got to anticipate.
Speaker 2 (10:13):
The teacup is maybe like cash. Yeah, teacup might be cash.
Speaker 4 (10:16):
It might be a little bit of a bond. Like
it's keeping as comfy. It's very predictable. I love Disneyland.
I love a Wild West ride. You know, I went
on the Giant Drop at Movie World when it was
a thing.
Speaker 2 (10:31):
Is the Giant Drop still a thing? I don't know.
Speaker 4 (10:32):
But I hate those ones. But I know exactly what
which one you're talking about. But you've got to expect
a lot of up and down in a lot of volatility.
So when we think volatility, we're thinking roller coasters.
Speaker 2 (10:43):
And if you want it to be an exciting.
Speaker 4 (10:45):
Roller coaster or an exciting asset class, it has to
go up and down and you've got to be prepared
for that. Yeah.
Speaker 2 (10:50):
Right, so we're getting prepared.
Speaker 4 (10:52):
But I actually spoke back to a money direst who
worked in tech only God, it was so interesting, literally
the amount of money people are making in tech.
Speaker 2 (11:00):
Click.
Speaker 4 (11:00):
If you've been thinking, maybe I need to change my job,
you probably should just go into tech. And while she
had a really great salary, like literally Beck, she had
like a salary of like three hundred thousand dollars plus
she was being issued shares and she was making about
half a million.
Speaker 2 (11:14):
Dollars is ish a year. Oh my god, that's insane.
Speaker 4 (11:16):
Ride. And she literally just worked her way up, like
she didn't have some fancy degree, Like she didn't do
a degree, but it wasn't the reason for her success anyway.
You can go listen to that money diary. Half her
team will literally laid off within.
Speaker 2 (11:30):
The first few months of her starting. Oh, like that's scary. Yeah.
Speaker 4 (11:34):
Like, So not only are the asset classes scary for
people purchasing them, but for the people working in them.
There's also a lot of volatility, and the same like
literally goes for stocks. You can like have a great
run and then you can lose a chunk of your
value in a couple of weeks. So I think, yeah,
let's think about Disneyland and the different types of rides
(11:54):
they have, And if you want to be in tech,
you've just got to be accepting that the rollercos is.
Speaker 2 (12:00):
A little bit more wild. You might have a bit
more fun, though that is the risky take. So if
we want to.
Speaker 4 (12:06):
Talk about I feel like Navidia I did a whole
podcast on this. But Navidia is a good example and
one that we've spoken about in the past. This company
has been I guess, the poster child for the AI boom,
Like everyone is talking about it, everyone being me and
everyone in the investing space. Maybe you haven't been talking
about it at your dinner table, but it was of
(12:28):
hot topic I guess in twenty twenty three, twenty twenty four.
Speaker 2 (12:31):
And the reason they.
Speaker 4 (12:32):
Have been I guess so popular is because they make
like little computer chips, and those computer chips are basically
the brains of all of the AI models, so like
chat GPT needs these chips to function, So obviously, with
the rise of people using chat GPT, the video is
going to increase in price. And even big tech company
(12:55):
is like open Ai and Microsoft and Meta, they were
buying Navidia's GPUs by the truckload to essentially power their
data centers. So that tells me that if all of
those remember the Big Seven, obviously Navidia is one of them,
but if the other companies in the Big seven are
purchasing from Navidio, you go, oh, someone's been cooking here,
(13:17):
Like what's going on? So naturally, Navidia's share price then
started to go through the roof, up over two hundred
percent at one point. Beck based mostly on what people
believed AI could become, not proof, just like they started
seeing the big dogs getting on the big rides and going, well,
if they're comfy, I want to be on the big ride.
Speaker 2 (13:40):
But it was all just belief because you were seeing
people walk the walk.
Speaker 4 (13:44):
But we hadn't heard much about revenue, we hadn't seen
a lot of income yet.
Speaker 2 (13:48):
It was all just this is the next big thing, Beck.
Speaker 4 (13:52):
But someone comes knocking and says, hey, are you paying
your bills? And you go, well, I haven't been paid
babies as sets yet, so you're going to start asking questions.
But obviously I'm on a little bit of a rant,
and I do apologize and you can ask the questions
in a hot second, but it does get a little
bit messy. So this like cossip podcast. Now are you ready?
So there's a Chinese company called deep Seek. You might
(14:12):
have heard about it, and it came out of literally nowhere,
and it launched a competitive AI model that used way
less GPU. So these chips, the power chips, it used
a lot less GPU power, meaning they needed less of
the chips, so everyone was like, oh, what is deep Seek?
How does that work? And that got investors really spooked.
(14:33):
So people started being like, oh my god, like I
just invested in this other AI thing. But now Deep
Seeks come out, and I feel like we all know
that the Chinese people are really, really smart, so when
something comes out of China, you go okay, like their
tech sector is really impressive. And suddenly people were asking
all these questions like have we just been over investing
in something that might actually not be necessary, like because
(14:56):
Deep Seeks come out and said, hey, our take use
this way less of these cheer and now we're all like, wait, wait, wait,
did we jump the.
Speaker 2 (15:02):
Gun a little bit?
Speaker 4 (15:03):
But now we are seeing the impacts and America has
a lot to do with this, but we're now seeing
the impacts of Trump's trade war. So he's the drama
like he is being drama and I don't appreciate it.
I don't think many people appreciate it. But on top
of his ridiculous tariffs at the time of recording, America
has also put export restrictions on high end chips going
(15:25):
to Chinah and then China were like absolutely not and
then they fired back by blocking exports of critical minerals
that are needed to make those chips. So like, good
luck making the chips if you can't get the minerals to.
Speaker 2 (15:38):
Make them grow. Yeah, that's what I mean. Like it's
a bit of a gossip podcast, and do you know
what that meant?
Speaker 4 (15:43):
So the result of that is that analysts believe I
do too after reading their work, but like they did it,
not me, but analysts believe Navidia is now sitting on
five point five get this, five point five billion dollars
worth of advanced chips it built for China, but they
can't sell without US government approval. Oh so they can't
(16:05):
sell GI Yeah, and.
Speaker 2 (16:06):
The government's like absolutely not.
Speaker 4 (16:07):
That's not leaving because we are the drama and we
are starting all of this shit anyway, that's obviously quite stressful.
But because this is going around and like Navidia hasn't
confirmed to this because it's like, you know, I'm not
going to confirm whether you cheated or not, Like it's
not going to happen. These are just analysts who are like, okay,
like we know what their production looks like, we're going
(16:29):
to guess how much they have in their stocks, so
five point five is the guest. But because that's being
discussed in the market, their stock has now fallen around
eighteen percent, so people are like, oh, that's true, that's stressful.
Like if Navidio is holding all of these chips and
can't sell them, like, that's not good, which means their
income is going to go down, And some of that
(16:51):
hype around how good Navidia is it started fade. People
just don't care as much anymore because they're like, h like,
Navidio can't even sell their chips, right, Like why would
you continue to invest in them? And investors are really
starting to ask, well, is this a short term bump
or should we be rethinking this whole thing long term?
Like should we be looking for other companies to invest
in because we like the idea of AI but like
(17:15):
there's a lot of political drama around this particular one,
so people are.
Speaker 2 (17:19):
Investing less into Navidia. Does that make sense? It does
make sense. It's a lot to take in. Yeah, I
feel like that's why I'm like, it's a gossip podcast.
Speaker 4 (17:28):
You need to understand all of the amsing cuts, and
I've got to give you the whole backstory absolutely, So
does this mean that Navidia is bad?
Speaker 2 (17:35):
Now?
Speaker 4 (17:35):
Not necessarily, But it depends on your investment style. And
I hate this question when people are like, oh my god,
should I buy this? And it's like, well, I can't
give you personalized advice. If I could, I would, but
I can't, so I won't. It depends on your investment style,
the time horizon that you have, so like how long
you're planning on investing for. And your tolerance for risk
goes back to Disneyland and like, I can't remember all
(17:57):
of the rides that are there, but you get my
vibe when I'm like, oh, would you go on the teacup?
Speaker 2 (18:01):
Beck?
Speaker 4 (18:01):
Right, I would happily go on go on the tea cup?
Would you go on the Giant Drop?
Speaker 2 (18:05):
I don't think. Yeah.
Speaker 4 (18:06):
So that's what risk is, right, So that's your tolerance
to risk. But it's in the share market. So you
might look at different shares and go, okay, well a
blue chip stock, I'm gonna buy that, no worries. But
now with all this additional information about Nvidia, would you
purchase that? So the question is not whether you should
(18:26):
or shouldn't. It's more around your personal situation and whether
you would be comfortable with it? Because remember how he
said I love the giant drop. Yeah, So like we're there,
the line is short. I go, Beck, do you want
to go on it with me? You go, no, absolutely not.
I'll wait here, I'll take a picture of you on it,
and I go on the ride. So can I tell
you whether you should go on the ride or not?
(18:47):
Because I like the ride?
Speaker 2 (18:48):
You go, but I.
Speaker 4 (18:49):
Don't like the ride V So that's what happens when
people ask me, Hey, should I invest in this?
Speaker 2 (18:55):
How do I answer that?
Speaker 1 (18:56):
I don't know?
Speaker 2 (18:57):
If you like rides? Do you know what I mean?
Speaker 1 (18:59):
Right?
Speaker 3 (18:59):
Right?
Speaker 1 (18:59):
Right?
Speaker 4 (19:00):
You need to work out your own tolerance to risk.
And once you do, and you can because I've done
episodes on risk tolerance and your investment risk profile, and
you can also google free investment risk profile and do
one online to work out what you would be able
to tolerate. Once you do that, you would get an
idea of whether you would want to invest. But I
(19:21):
think when it comes to Navidia specifically, they're a massive player.
Like in the AI space, they are going to be
a massive player, and they don't think with how much
market saturation they have they're going anywhere quickly. Their chips
are basically in every single major model out there at
the moment. Could that change maybe, but it would take
a long time and a lot of different companies making
(19:43):
a lot of big changes.
Speaker 2 (19:44):
To change that.
Speaker 4 (19:46):
They've got scale, they have dominance, and essentially I don't
think they're going anywhere anytime. But they are also under
so much pressure. Beck Can you imagine all of this
gossip coming out about you.
Speaker 2 (19:57):
I know, if you're Sam, you would be.
Speaker 4 (19:59):
Feeling the pressure, and essentially politically, economically and from competitors.
Speaker 2 (20:04):
They are feeling that heat.
Speaker 4 (20:06):
So if you are investing for the long term and
you believe that you want AI to be in your
investing portfolio because you believe in the future of AI infrastructure,
then this could definitely be an opportunity for you to
purchase some shares because they're down eighteen percent, And when
we see the share market down by eighteen percent, sometimes
(20:27):
we could be.
Speaker 2 (20:27):
Like, oh, it's on sale. Yes, I love a little discount.
Speaker 4 (20:31):
Like don't get me wrong, if you're going to go
to Disneyland, BIC, are you googling discount code on your tickets? Yeah, exactly,
And that's what a drop in the share market means.
So it's less I guess about the question of is
Navidia a bad guy, and more about whether it fits
your goals and your investing aspirations and your timeline, and
(20:52):
then how comfortable you are writing out that volatility. And
there are just some people who don't want to go
on the giant drop fair enough exactly, even if it's
something that could be perceived as like a bad purchase
or something.
Speaker 2 (21:04):
It's like, there's no way of telling what the future
looks like.
Speaker 4 (21:08):
So I know it's funny because like, as you know,
I get in the comments section on our videos on
TikTok and on Instagram, and I'm always replying to people,
and someone was like, well, I bought this and my
shares are down like ten thousand dollars over the last
few months, like essentially saying that it was a bad investment,
And I was like, oh, my goodness, Like that is
(21:28):
not like, yes, your shares are down over the last
few months, but like gazoom oush like you've got blue
chip stocks. The entire market is down at the moment,
we should be seeing it as on sale as those too.
Oh my investment's down and therefore it must be a
bad investment. The market is wild, she's dramatic. We need
(21:49):
to understand her to be able to deal with her
different moods. Essentially, yeah, absolutely, and just be patient with her.
So the video is under pressure right now so much
so like where's the opportunity now? Like where are investors
starting to look instand?
Speaker 2 (22:05):
I feel like.
Speaker 4 (22:05):
We're seeing a bit of a shift so like AI.
Now I won't say his household. Not everyone understands it fully,
but it's not as like ooh ah as it used
to be. Sure like now you're like, oh, yeah, I
understand the premise of chat GPT, Oh yeah, I understand
what deep seek is. But in twenty twenty three and
twenty twenty four, the I guess hype was all around
(22:28):
AI infrastructure, so like the chips, the servers, like the
cloud capacity, basically the building blocks that created AI. We
were like so excited about purchasing. But now the market's
really asking, well, who's making money using this technology? Like
we've built it that people have come. Who are the
(22:49):
people that are using it to make a lot of money?
Because we're seeing, you know, this system help us individually,
but surely they are really big companies that have found
ways to use AI to their advantage and are making
a lot of money. I would really like to invest
in those companies. Yeah, so that I feel like it
is quite smart. So who's making the money, So there's
(23:11):
more focus, I would say on the company's further down
the AI value chain side a thing. Let's call it
like the chain you've gone further down, like software players
or even industries applying AI in real practical ways. So
an example of that might be, you know, you might
find and this is my easiest example, like I have
(23:31):
a mortgage broking company. At the moment, I'm looking at
other mortgage broken companies using AI to help with a
lot of the like ADMIN processes, and I'm going, oh,
that's smart. Imagine if that was scalable, that could be
an investing opportunity here for me, because obviously I'm seeing
it individually in my business be really helpful. So let's
(23:53):
take a company Palenteer for example. Beck you might not
have heard of Palenteer before. They're not buildings, but they
are helping businesses and governments, which is important because governments
have lots of money. Taylor AI models using their own
data so even in this market downturn, their share price
is actually up sixteen or so percent this year, and
(24:16):
that's on top of the massive get this, three hundred
and forty percent gain they had in twenty twenty.
Speaker 2 (24:21):
Four, three hundred and fourty percent gain.
Speaker 4 (24:23):
That's a lot of gain. And they're landing some really
big deals. So they're landing big defense and government contracts,
including get this, the new US immigration deal, which is
worth thirty million dollars. So if people are seeing big
moves like that being made.
Speaker 2 (24:42):
I feel like we get our little ears up and
we're like, oh, what's going on over there?
Speaker 4 (24:47):
And they are talking about shifting their focus to the
commercial sector too, like they're going to look at healthcare
and finance, which is where we could see even more
upside because those industries obviously need a lot of help
but also very lucrative.
Speaker 2 (25:01):
Yeah.
Speaker 4 (25:01):
So I think that this is a really good thing
to look into because they're a company that are I
guess using AI and now people are looking at this
company going, you're not making AI, but you're using AI
and you're making.
Speaker 2 (25:15):
A lot of money. I want to be investing in you,
I see.
Speaker 4 (25:18):
Okay, So instead of just like big flashy AI companies.
There's more attention on the ones applying it behind the scene, Yeah,
which I think is low key, really smart. But I
feel like I have been ranting and I don't even
know how we got a Disneyland reference in there. But
let's take a really quick break back, and when we
come back, I'm going to dive into, after having a
(25:40):
little bit of a breather, into a part of the
AI world that.
Speaker 2 (25:43):
Doesn't seem to always get the spotlight.
Speaker 4 (25:45):
We're talking about the quiet achievers, the ones behind the
scenes helping power the future of AI.
Speaker 2 (25:51):
I would say, there's a spoiler here.
Speaker 4 (25:52):
The next big thing might not be a really nice, big,
shiny app It could actually be hiding in your electricity bill.
Oh bet you didn't see that coming. All right, welcome
back everyone. So before the break, Victoria dropped a.
Speaker 2 (26:07):
Bit of a juicy gem. I tried, was it Disneyland?
Speaker 3 (26:11):
It was?
Speaker 4 (26:12):
You know what many juicy gems in that case, and
one was Disney Like.
Speaker 2 (26:16):
Disneyland just makes it make sense.
Speaker 4 (26:18):
Yeah, that makes the fair and art sometimes going to
use the most rogue analogies and it really hits.
Speaker 2 (26:23):
It works.
Speaker 4 (26:24):
So does that mean I can claim my Disneyland trip
that I went on a few years ago on tax
I think I didn't, but I'm sure we can talk
to my accountant.
Speaker 2 (26:31):
Yeah, I think so.
Speaker 4 (26:32):
I think if you say any name of any product
you've bought this year on the podcast you claim it, yeah, iPhone, iPhone,
I phone, Google, Pixel nine, Pro Excel, that is a
text deductable, I will be talking to my accountant exactly.
So we were talking about the shift from hype to application.
You mentioned that it's not just the headline names investors
(26:53):
are watching. No, it's not, it's the behind the scenes guys,
possibly behind the scenes people. Okay, And we're seeing a
bit of a pivot from I guess backing the builders
like Navidia and the cloud giants to looking at who's
actually using this tech in a meaningful revenue generating way.
Speaker 2 (27:10):
So if you're making money, I am interested.
Speaker 4 (27:13):
And there's this whole other part of AI I would
call AI centrals. So we're talking utility companies, we're talking
energy providers and infrastructure players, the ones literally keeping the
lights on in the data centers powering all of this tech.
Some analysts, and you've probably heard whispers of people being like,
(27:35):
oh my God, don't use AI because you know, do
you know how many trees it costs?
Speaker 2 (27:40):
You've heard this.
Speaker 4 (27:41):
So some analysts are essentially saying that electricity demand from
data centers, which is where all of the AI is housed,
could double by twenty twenty six, which is wild when
you think about how many AI models we're running already,
Like we're already doing lots. You're saying there's going to
be double by twenty twenty six, and like that's next year. Beck,
(28:02):
So it's not just about the big, flashy names like
Navidia and Microsoft. It's essentially a whole ecosystem that works together.
The company's using AI in super practical ways and the
ones enabling it in the background. That's where we're starting
to see, I would say a little bit more market attention, right, Okay,
so here's the million dollar question. Yes, I feel like
(28:24):
this whole episode has just been trying to get you
to go against everything you say, which is I can't
give personal advice and please tell me you want personal
advice now, Okay, we'll sit down and I'll switch the
micro off. Yes, is this the next dot com bubble?
Speaker 2 (28:37):
Oh?
Speaker 4 (28:38):
Yeah, it could be. It absolutely could be. Do you
know what, when you say the dot com bubble, I
laughed so hard. Have you seen the interview where Jeff Bezos,
who does Amazon, He went to Harvard and like pitched
his idea for Amazon to all of these like NBA
students doing business at Harvard.
Speaker 2 (28:56):
You'd think they'd be really smart.
Speaker 4 (28:58):
And one guy said, look, just sell like Amazon worth
nothing at that point, because like it's never going to
take off, Like you are never going to be bigger
than bricks and mortar stores, like the shop down the
road already established, already has heaps of customers. You probably
should just throw the towel in. And that's coming literally
from him pitching to Harvard. How'd Amazon work out?
Speaker 2 (29:21):
Beck? Unfortunately it's quite big? Is it? Unfortunate for who?
Speaker 4 (29:26):
I mean a lot of people, but unfortunately not for
Jeff Bezos, right like he won. Unfortunately. Imagine being that
Harvard student. I know that was the one that was
like I told Jeff Bezos to drop Amazon anyway, I
thought that was funny. But the AI hype, I guess
is a lot like or has a lot of similarities
to what we actually saw when the Internet started to
(29:50):
become big in the late nineties.
Speaker 2 (29:53):
I was around in the late nineties.
Speaker 4 (29:55):
I was only privy to playing the Muppets video game
and the Barbie video game on my computer at a
designated time that my parents let me.
Speaker 2 (30:03):
So a lot of the stuff that I've learned.
Speaker 4 (30:05):
About the dot com bubble is actually through my own research,
not experience, and I've done a lot. But when the
Internet was the hottest new thing back, investors started essentially
throwing money at anything that had a dot com name, right,
So like investors were like, oh, you're on the internet,
take my money. Literally, companies didn't even need to be
(30:25):
profitable or prove themselves, and some of them didn't even
have revenue yet, and investors were like, take my money.
It's fine, I believe in this. But because the Internet
felt like the future, spoiler actually was people didn't want
to miss out. They were like, oh, my god, this
is going to be the next big thing, and they
weren't wrong. But the problem with that is that those
(30:45):
businesses didn't have actual business models. So like people weren't
wrong when able to identify that, you know, the Internet.
Speaker 2 (30:53):
Was going to be the next big thing. That's pretty sexy,
that's pretty.
Speaker 4 (30:56):
Exciting, but they did get off track when picking the
right companies to invest in. I mean investing in a
company with no revenue. It's not for me, sure, but
we need to do our research. But most of those
businesses didn't actually have business models. They were burning through
cash with absolutely no clear plan to turn a profit.
Speaker 2 (31:14):
They were just like, let's spend lots of money, we
have lots of.
Speaker 4 (31:16):
Investors, yay, And that was like their entire strategy. So
when reality finally caught up and interest rates then rose,
investors started asking questions. They were like, Hi, we invested
in your company, where's the revenue And they were like, Lol,
there isn't any And that's when it all collapsed. Ah okay, okay.
(31:37):
So this is what the dot com bubble was built on,
right belief. It wasn't just built on facts and like
looking into okay, well this company sells X and it
supplies why and because of this, I think it's a
good investment. They were just like, my hopes and dreams
are feeling good. I'm going to invest. But when the
Nasdaq dropped more than seventy five percent, it took fifteen
(32:00):
years to crawl back. Whoa like it did crawl back.
That's really important to point out it did eventually crawl back,
and that's why we are long term, long domestics exactly, right,
But like that's fifteen years.
Speaker 2 (32:11):
That's crazy.
Speaker 4 (32:13):
So now fast forward twenty five years, we've got another
revolutionary tech which was a mouthful, but that's AI with
lots of excitement and some I would say spicy evaluations.
So the difference is back that this time it's not
really scrappy startups that are just chucking a dot com
name and just going, hey, you could invest in.
Speaker 2 (32:34):
Us with the future.
Speaker 4 (32:35):
It's actually the biggest most profitable companies already existing in
the world.
Speaker 2 (32:39):
Right.
Speaker 4 (32:40):
It's Microsoft, it's Alphabet, it's Navidia, and they're dropping hundreds
of billions of dollars into AI research and development and infrastructure,
like very serious money. Like they are just you know,
floating on hopes and dreams, and I mean that's distelling
it down, but you know exactly what I mean when
I say that.
Speaker 2 (32:59):
So, yeah, we're seeing some type of correlation.
Speaker 4 (33:03):
Navidio is down eighteen percent this year, Tesla has been
cut in half as what should be. But unlike the
dot com days, these companies have real products back, real
legitimate products, real customers and real revenue, and you're probably
going to go, well, is that really risky? Like still
like you're saying that these are real, Like is the
(33:24):
risk the same, Well, the risk is not necessarily that
it's super risky, but it's that history doesn't repeat itself,
but it can sometimes rhyme. A lot of the optimism
around AI is still based on hopes and dreams and
what it might do, not what it's doing right now. Okay,
(33:45):
so like we're still really optimistic about oh my goodness,
it could potentially xyz. So if the money doesn't start
flowing soon from what's being invested by these big companies
into research and development and all of the infrastructure, I
think that the market could definitely cool off. And maybe
I think the biggest takeaway we can get from the
(34:06):
dot com bubble as it's called, is that the Internet
did change everything, like just not in the timeframe that
everybody expected it to do. Like the right idea, I
guess at the wrong time can still cost investors.
Speaker 2 (34:21):
A lot of money, sure, for sure.
Speaker 4 (34:23):
So like remember when we were younger and they were like,
the future is going to have flying cars? Like yeah, probably,
but like what is required to create those flying cars,
you know, right right right, I have to really quickly
be honest with about sang. I said dot com bubble before,
and I didn't know what it meant, and now keeps
and I thought I'll be able to figure it out
as you talk, and then I couldn't figure it out,
(34:44):
and it's far too.
Speaker 2 (34:46):
Late for I love you. You are literally the best.
Speaker 4 (34:49):
So the dot com bubble was when the Internet like
really started to launch and a whole heap of companies
started launching on the Internet, and people got really excited
abou about it and started investing a lot of money
got into it because they were like, the Internet's the
next big thing. And beck, I think you and I
can agree that, yeah, the Internet was the next big thing,
like it changed everything, But these companies just existing on
(35:12):
the Internet didn't necessarily mean that they were the next
big thing. Yes, Like if you and I'm going to
just steal this down really simply, like if you invested
in a fashion company online and you're like, oh my god,
next big thing is the Internet, and I love fashion,
so I'm going to invest in this fashion company, like
that doesn't mean it was a good fashion company, right, Like, yeah,
they were on the Internet, and if they'd made use
(35:35):
of that opportunity and been one of the first to
market that fantastic, they would have been really good, like
eBay or Amazon. But lots of companies were jumping up
and down about the fact.
Speaker 2 (35:44):
That they just existed on the Internet and.
Speaker 4 (35:46):
They didn't have real revenue, they didn't have real profits,
they didn't have a lot of product, but they had
hopes and dreams.
Speaker 2 (35:51):
Gotchah okay okay, And that's.
Speaker 4 (35:53):
What drove a lot of investment during that period of time.
But that investment, again was built on hopes and dreams
and wishes, and like, wishes isn't money. So for at
some point when people were like, hey, I need to
pay the bills, I'm looking for this revenue. Now I
invested in this thing, like where's the dollars? People started
(36:14):
to see that maybe they couldn't back themselves, and therefore
it dropped and it crashed, and reality kind of came to.
Speaker 2 (36:22):
The table unfortunately, as it always does.
Speaker 4 (36:24):
Literally right, So I reckon, Yes, the Internet did change everything.
So I guess when it comes to ai Beck, it's
not just all about betting on what we think the
next big thing is. I think we can all agree
that AI is definitely one of the next big things.
It's actually about understanding whether the business model behind the
thing you want to invest in behind it is actually
(36:46):
going to stack up.
Speaker 1 (36:47):
Yeah.
Speaker 4 (36:47):
Okay, So how do we even start, like thinking about
investing in tech without getting burned? Good question, because I
guess tech is very exciting and it moves very quickly.
It's literally changing the way that we live and work,
and some of the biggest success stories in history have
come out of this sector. So I think that's why
people still talk about it so much. I think that
if I said name a sector in investing, the first thing,
(37:10):
you'd probably say tech sector, like easy, like. I think
most people just go to that because that's where most
of the returns have come from. But it's also relatively risky.
So when we're looking at investing in tech or in
AI in particular, I've got a list and I've just
written it down. So are you really Yeah. So there's
a few things I want you to keep in mind.
(37:31):
The first one is hype does not equal profit, So
just because you're excited about it doesn't mean they're making money. Yeah,
It's like, do you remember when I was ranting on
about after pay shares ages ago, people were like, I
invested in after pay and it's just going up and
up and up, and I was like, they have no revenue.
Speaker 2 (37:46):
This is going to crash. And then it crashed and
I was like, what a surprise, that's crazy. Who have
seen that going?
Speaker 4 (37:52):
But just because a company is trending or dropping buzzwords
like quantum ai, cloud infrastructure, that doesn't actually mean it's
making money bick. They just have a fancy shiny word.
So always check the financials. Is it profitable? Does that
have revenue growth? Is it burning cash? Do you know
what you can do? You can gain the system.
Speaker 2 (38:11):
Okay, you can ask chat GPT.
Speaker 4 (38:13):
If a company is profitable, you can ask chat GPT like,
can you please look at the financials and let me
know if it's got year on year revenue growth. You
don't even have to look at the proper financial report.
You can give the financial report to chat GPT and
she can explain it to you. I've also decided that
chat GPT girl, oh yeah for sure. Yeah, definitely giving
(38:34):
female vibes. Yeah, I'm feeling that anyway. The next thing
number two on my list follow the value chain that
sounds lame, but like hear me out, not every win
in AI is going to come from the loudest players. Yes,
like Navidia and Microsoft in the spotlight and have lots
of money and keep throwing it at that. They're also
(38:55):
really good at a press release. So like, when you're
really good at something and you have a lot of money,
you're going to have the right amount of money to
pay pr so that people are talking about you consistently,
really nicely. But I want you to start looking at
the software companies applying AI in real ways, even the
company is powering the infrastructure like utilities or like the
(39:16):
chip manufacturers, Like I think that there's probably some very
real money there to be made. The third thing I've
written down, I don't think you're going to be surprised.
Diversification is your bestie. That's so true in every Yeah.
Speaker 2 (39:30):
Literally, like don't go all in on one stock.
Speaker 4 (39:33):
Like how many times do I have to jump up
and down about how sexy I think ETFs are?
Speaker 2 (39:38):
Why diversification?
Speaker 4 (39:39):
How you would never just own one stock in general,
So like, if you're going to invest in AI, why
are you picking one AI stock if you think it
is so important? Let's get a bunch of them. So
tech is volatile. We know that it is the biggest
loop de loop bride at Disneyland. So if you want
exposure to that sector, maybe consider spreading it a across
(40:00):
a few different tech companies, or maybe pick an ETF
that has those companies in it, or a mix of
hardware and then software and then like infrastructure place.
Speaker 2 (40:10):
Sure, so we're mixing it up.
Speaker 4 (40:11):
We're making sure that instead of just putting flour in
the bowl, we are putting lots of different ingredients like
eggs and sugar and a lot of butter because we
want to make a cake, baby, Like, I don't want
a bowl of flour that's been through the oven. I
want a cake.
Speaker 2 (40:26):
Absolutely.
Speaker 4 (40:27):
The fourth thing and I only have five, so we're
coming to the end of my list. But the fourth
thing is I want you to know your strategy. Like
I asked before if Beck would go on the Giant
drop and she said no, I want you to be
that clear on what you would and wouldn't invest in.
So AI and tech can be classic high risk, right,
high risk, high reward to play if you're in it
for the long game and you actually believe in where
(40:49):
tech is heading. A little bit of turbulence just comes
with the territory, like that's how it works.
Speaker 2 (40:56):
But if it's.
Speaker 4 (40:57):
Money that you need in I would say the near future.
Maybe if you're like, oh what do I do with
my house deposit? Or I've got a wedding coming up?
Should I be investing this mass amount of money or
maybe even your emergency fund? That is not the place
for this, like absolutely not. Make sure that your strategy
matches your timeline and your goals and.
Speaker 2 (41:16):
Your peace of mind. Right.
Speaker 4 (41:18):
And then the last thing I've written down here is
not every good idea makes a good investment, and I
think that is really important to remember. Just because it's
a good idea doesn't mean it's going to be profitable.
Doesn't mean that you should be investing in it. The
dot com bubble or the dot com bust didn't happen
because the Internet was a bad idea.
Speaker 2 (41:40):
Was the Internet a bad idea back? I don't think so.
I think it's pretty slay great idea.
Speaker 4 (41:45):
It happened because investors through a lot of money at
companies that weren't profitable or proven. AI might absolutely be
the future, but it doesn't mean that every single AI
stock is a goodbye. Like, just because people are playing
in the AI space and they're listed doesn't mean you
should be buying them. The lesson here, I think is
look for solid business models, not just shiny buzzwords. Okay, okay,
(42:09):
they can't just.
Speaker 2 (42:09):
Talk the talk.
Speaker 4 (42:10):
They also have to be walking a walk. If you're
not making money, I'm just not that interested in you.
Yeah enough, like low key rude like in the shed market, beck,
yeah we're marrying rich.
Speaker 2 (42:20):
Oh not just the guy who looks rich?
Speaker 4 (42:22):
Yeah yeah right, so right, So if someone's listening and
thinking like do I need to jump on the AI
train for it leaves the station?
Speaker 2 (42:29):
What do you want them to remember?
Speaker 4 (42:30):
Literally all of the stuff I just said about Disneyland.
But like, you don't need to be in on every
single trend to build wealth. Like if you're looking at
AI and you're like, oh, this is the future, Like, babe,
those shares are still going to increase in the future.
If that's the case, yes, you might be getting on
at a different station than everybody else.
Speaker 2 (42:48):
And yes, some other people might make a little bit
more money than you.
Speaker 4 (42:52):
That makes sense because they got on the train really
early and they get alonger ride, and that's fine. That
doesn't mean you're right, is any less valid, You're still
going to the same destination. So I think importantly tech
and AI can absolutely be part of your portfolio. It
is just so important to make sure it fits your
goals and your timeline and what you want to do,
(43:14):
and making sure that you're okay with the fact that
you're going to have a little bit of that volatility
along the way, like it's going to go up and
it's going to go down because investing at its crux
is a roller coaster and if you don't like roller coasters,
don't go to the theme park.
Speaker 2 (43:29):
Fair fair call.
Speaker 4 (43:31):
So I think that's actually a perfect thought trap this up.
So if you've got a mate who's been texting you
screenshots of AI stock charts and see I'm also sending
my friends screenshots of stock charts, well you're the problem.
I am the problem, and they asking, like, you know,
should I buy this? Maybe flick them this episode instead? Oh?
Should I send this to myself yourself? Don't get me wrong.
(43:51):
As much as I can tell you exactly what you
need to be doing, I've been down in the video wormhole,
like I go down that rabbit hole on a regular
basis and to make ooh what's this?
Speaker 2 (44:00):
Oh what's that? I want to look?
Speaker 4 (44:02):
And then I send texts to my also investing friends
and I'm like, what's this look like? What are your
thoughts on? And they think I'm de Lulu and spend
too long in financial reports when you could just stay
our ski But that's okay, that's a story for another day.
So if you're here, still, thank you. We love you,
and I adore talking about investing and giving you as
(44:22):
much investing knowledge as possible. But a way to get
more investing knowledge is for you to hit follow and
actually subscribe to our show for two reasons. Right First,
you won't miss an episode, which I think is very
important because I would love to see you again. But
also it really supports our show. So if you are subscribing,
you are following us. It means that the algorithms more
(44:43):
likely to push it to other people who might enjoy
our content, which I would really appreciate.
Speaker 2 (44:47):
Like, we want more friends back, so obviously we.
Speaker 4 (44:50):
Have a whole heap more deep dives, financial hot takes,
and all of the juicy stuff coming your way.
Speaker 2 (44:55):
And if you're feeling extra generous leave us a five
star of view.
Speaker 4 (44:58):
We help those two love those It really helps more
people find the pod and it gives us all the warm, fuzzy.
Speaker 2 (45:05):
Cozy and on Friday episodes.
Speaker 4 (45:08):
I also read one of our warm and Fuzzy five
star reviews to the team true, so feel free to
stroke Beck's ego a little bit more in those Yeah,
I wouldn't hate it be Elida Guys BI Guys did
buy shared on She's on the Money is general in
nature and does.
Speaker 2 (45:28):
Not consider your individual circumstances.
Speaker 4 (45:31):
She's on the Money exists purely for educational purposes and
should not be relied upon to make an investment or
financial decision. If you do choose to buy a financial product,
read the PDS TMD and obtain appropriate financial.
Speaker 2 (45:44):
Advice tailored towards your needs.
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