The Paul Truesdell Podcast
Episode 330
Tuesday, February 27, 2024 • 42:01

SUMMARY KEYWORDS

Navidia, Ukraine, Russia, China, cryptocurrency, chips, manufacturing, company, investing, graphics cards, gaming, overnight success, founder, family connections, data centers, technology, video, graphics, cell phone games

SPEAKERS
Paul Grant Truesdell, J.D., AIF (The Elder), Paul Grant Truesdell, II (The Younger)

DISCLAIMER
Due to our extensive holdings and our clients, you should assume that we have a position in all companies discussed and that a conflict of interest exists. The information presented is provided for informational purposes only. Truesdell Wealth, Inc. - A Registered Investment Advisor - Florida - 212-433-2525 | Paul Grant Truesdell, J.D., AIF, Founder

00:00
The Paul Truesdell podcast Tuesday, February 27, 2024

Paul Grant Truesdell, J.D., AIF  00:04
we are going to talk a little bit about Nvidia and the evaluation. What's your initial thoughts on it? It's

Paul Truesdell, II  00:11
an amazing i, what, two to three years, if you look at it, it's kind of been obvious that they were going to take this super track, but I don't know, the the hype, to me seems a little bit above reality. And it's not as long term thinking as it should be. But, you know, that's kind of how things go. When you get fads, people are extremely exuberant, about, about things, especially AI and all of them, they are effectively the only major engine that is pushing all of that forward. So you

Paul Grant Truesdell, J.D., AIF  00:45
Well, let's pull back and talk a little bit about just exactly what the who the company is what exactly they do. But I think, because I don't think a lot of people really understand what their processes and procedures are. Let's just let's run through that in terms of invention manufacturing, high end, low end, let's just kind of cover the big broad picture briefly.

Paul Truesdell, II  01:05
Yeah, I mean, so it's valued, like an insane tech company. And basically, they are, they don't manufacture anything, as far as I'm aware. If they do, it's extremely small scale stuff. I think they outsource all manufacturing to a handful of partners.

Paul Grant Truesdell, J.D., AIF  01:24
This so this is a technology company that really is focused in the area of intellectual capacity

Paul Truesdell, II  01:30
develops, its pure design, fair design. Now, granted, they sell a product, but they don't do the actual manufacturing. And if we've learned anything over the past couple of years, with all the talk of chips and everything in the in the media, the thing is the manufacturing, even if you have a good design, that manufacturing is still a really hard part.

Paul Grant Truesdell, J.D., AIF  01:48
And so you have people like a site like Apple, Apple, does the design have the intellectual capacity and capabilities, but the actual manufacturing generally takes place someplace else, it's all outsource

Paul Truesdell, II  02:04
that includes the chips. Yeah, that includes the specialized hardware that includes the actual finished product, they, they don't do any manufacturing, they're purely a effectively designed company that then sells the finished product after the person makes it. And it's kind of like a lot of these, you know, most food brands you buy things from, they do the same thing. They have these large production kitchens and food manufacturing plants that, hey, we developed a product, big company makes it for you, they deliver it to shelves, and you know,

Paul Grant Truesdell, J.D., AIF  02:39
well they're an, the word I would use is they are an aggregator. Sure.

Paul Truesdell, II  02:43
Well, they're designer, I would say, You know what I

Paul Grant Truesdell, J.D., AIF  02:46
was referring to Apple Apple, when it comes to manufacturing and apples are an aggregator they aggregate

Paul Truesdell, II  02:50
a lot of parts together. But anyway, yes, it's very, very, very akin to Apple. I hadn't thought of that. But that is that is exactly right. In that um, you know, unlike the old GE or somebody like that, or any modern car manufacturer, there's not a lot of vertical integration. It's it's outsourced. So yeah,

Paul Grant Truesdell, J.D., AIF  03:10
you know, used to have unformed use always open your door on the rocker panel, if anybody even knows what that is anymore. There used to be say body by Fisher doesn't say that anymore. So there is no more bodies. It's all robotically put together. So the video is really the benefactor of a cultural trend. And I would say the cultural trend that it has benefited from dramatically would be two things. Well, let me say it's three things, social media, gaming, and basically everything in the world becoming technology based. Well, in

Paul Truesdell, II  03:49
particular, they're benefiting right now from insane. Focus on Ay ay ay ay ay ay. And, but it's interesting because you trace their roots back. And you know, if you want to talk about that for a minute,

Paul Grant Truesdell, J.D., AIF  04:05
I do I want to go into their family history and where the founder comes from and how he was an overnight success like Colonel Sanders.

Paul Truesdell, II  04:11
Oh, yeah. Everybody thinks Nvidia is an overnight success. But the reality is, if you've been following the tech industry for any, any any reasonable amount of time, you'll know that Jensen last name Wang, I guess, but Jensen's, everybody knows him.

Paul Grant Truesdell, J.D., AIF  04:28
That's not a T by the way.

Paul Truesdell, II  04:32
He, he is a he is a known entities. He's kind of a charismatic, interesting character. And he in particular, he's he's Taiwanese, and he, I guess, I don't know is he is born in Taiwan came the United States, got his degrees and whatever. And anyway, he ended up being a designer at AMD Advanced Micro Devices. Um, and from there, I guess,

Paul Grant Truesdell, J.D., AIF  05:02
and that's no slouch company? No, well, no. I

Paul Truesdell, II  05:06
mean, they've been around for a long time. And they're basically the only serious competition to Intel for the past, I don't know, 30 years. So you know, he cut his he cut his chops for at least a little bit at what do you call it at AMD. And anyway, you go forward, and he in 93 founded Nvidia. And Nvidia in the first handful of years, as far as I'm aware, I mean, I've there may be some secret history too. But effectively they their idea was at a time when this was not a unknown concept. But it was a trend. And he saw a way to do it different better, whatever is a graphics coprocessor for personal computers. And I think an add on chip that did the graphics processing instead of on a separate, dedicated unit. Yeah,

Paul Grant Truesdell, J.D., AIF  06:02
and I'm gonna give a context of that to everyone who is used to video and audio on the internet. When I was paul@aol.com. I remember when we lived in Dunellen, and I had my very first pitcher that came across the internet. And I said to your mother, I said, You got to be kidding me, when the hell puts a pitcher on the internet took like, two hours for the sink to slowly download, you know, is like the movie contact, where all of a sudden, it's uncle a given a speech in this, like, Oh, we got a problem. The our visitors from outer space have got the wrong idea of us. And it's just, you know, how things are developed. So having that graphic interface, a whole different processing system. That's that's critical. And that's a that's been there. That's been our key.

Paul Truesdell, II  06:54
Well, yeah, I mean, that's where they started was was was graphics processing, and you know, from a technical perspective them and they basically, you know, kind of reviewing notes here, they they announced in when they were developing, I guess, one of their early graphics cards that they would only support triangles. What not, that's new to me. Well, so all graphics programming is triangle. Oh, everybody, nevermind, nevermind. People don't know that. Yep, nope. One thing. So when you start to think about it, it's funny because they, they were ahead of they were ahead of the game, even then, that was very unique at the time. Anyway, so for years and years and years, they've been trading blows, or in the past 10 years, the big behemoth for graphics processing. But the thing people don't realize is Graphics Processing is highly specialized. Basically, it's a it's an extremely good vector math calculator. That's, that's what a graphics processor does. If you don't understand, go brush up on on your advanced high school math, it's not super hard. But basically, you're calculating matrices all day. And this is basically a super powerful machine to do that. You know, every little thing on your screen has to be calculated every depending on what type of machine you have, and what you're doing 1020 3050 60 and gaming 100 200 times a second. Yeah. And it's it's an intensive calculation that has to be done. But the thing is, it's being done very efficiently. And it only does this one thing for the most part, and it doesn't really well. So that's why when the cryptocurrency craze kind of kicked off, graphics cards were extremely useful for certain kinds of for certain types of quote unquote mining of cryptocurrency, because all it was is just lots and lots of math. That makes sense. So that was really the first big boom, and alternate uses of the graphics cards for for processing. Obviously, there are other things but throughout the years and Nvidia has been ahead of the game on this for a long time, in a way that I remember back well gaming has been absolutely critical gaming was their, their bread and butter for a long, long time. And,

Paul Grant Truesdell, J.D., AIF  09:23
and to that end, I mean, there's a word called gamification, which has a different real meaning but I think the thing that we should remind everybody, you know, websites have been gamified you know, you don't have Warren Buffett's Berkshire Hathaway, very simple basic website. Very few sites are all various everybody's got video and audio and pictures and, you know, that takes power to compute. It

Paul Truesdell, II  09:49
does. But most of that doesn't require graphics. And that's that's kind of the interesting thing is, is graphics coprocessors are really required for are really only high end games, okay? And they're, they're necessary the way things have been designed, but not the really high end stuff. Not

Paul Grant Truesdell, J.D., AIF  10:09
let me ask you this, okay? Misha has not the downflow to the lower chips, a lot of that, you know, because they have invented so many things in the processing, it made everything easier. I mean, Chip speed has gotten insane. Yeah, but I don't

Paul Truesdell, II  10:29
I don't think is necessarily correlated for it. I don't know that gaming, graphics card technology has led to as much in that realm. The big thing it's led to, though of going back a little bit is going back 20 years. I mean, I remember kind of being dumbfounded at why and video was investing so much time and resources and promoting CUDA, which is a series of technologies. But the big thing is, is they have this application programming interface on their cards, that enables you to do crazy math. So it leverages the mathematical calculation capability of the graphics card to do insane mathematical calculations on on the device instead of graphics. Right? So you have two interfaces, right? Right. One is more mathematical base one is more graphics based. And obviously the mathematical like, for a long time. Yeah, there's been some really specialized uses of this technology, you know, scientific research, Space Research, medical research, medical

Paul Grant Truesdell, J.D., AIF  11:37
diagnostics, I mean, the imaging just for all of your

Paul Truesdell, II  11:42
bills, so it's not really as much as it's imaging is it's, you know, trying to analyze data, right. So it's weird. It's extremely weird. The, but for a long time, I mean, those use cases, the gaming stuff, at least as far as like horsepower required, as far outweighed the need for these other things, because it just was overkill. So it's interesting because they continue to invest in this and invest in this and invest in us. And then then the cryptocurrency craze hit. Right. Right. And the cryptocurrency craze, actually is the first thing that created a drought in graphics cards in a long time. And it's basically been that way for 10 years, you know, on and off depending on how things were going in the cryptocurrency markets, and whether it was worth investing in. But Nvidia has taken advantage of that to its fullest extent, limiting supply, when there's massive demand to pump prices up. to the chagrin of basically anybody in the quote unquote PC gaming industry. They've learned to hate their big green giant, who powers their games because they do nothing but just squeeze every last little penny by manipulating the supply chain to make sure that these things cost the very most that people are willing to pay for them. And usually that demand is driven by unfortunately cryptocurrency at least in the past 10 years, have the prices come down at all? No, they've gone nowhere but up, which of course reflects in the price per share of the video. We'll see that's the thing. So So moving forward to the advent of AI AI and machine learning everywhere. invidious focus has completely gone away from gaming to a to a point that people are honestly wondering how long they're going to. I mean, they've reallocated most of the engineers, as far as I'm aware, from the gaming side of Nvidia to the, you know, data center computing division. And that's where most of their, that's where most of their revenue is coming from now, is specialized chips for the data center. It's based off of the same technology, but they're just, you know, instead of a, you know, six 700 1000 $2,000 card, it moves it to something that cost $50,000 that you put on a server and they can't make them fast enough.

Paul Grant Truesdell, J.D., AIF  14:10
So let me just say something real quickly. For those of you who, who know what we do here, data centers are a thing. When it comes to real estate investment trusts, you actually have REITs that do not invest just in high rises or in strip centers or in mobs. That's a an acronym for medical office buildings that you have reset will specialize in data centers. And I remember when data centers was a brand new phrase, and I remember going okay, what are we talking about? Manila file folders. And I mean, I'm old, we're both old enough to remember when we did that, we were just talking about that. And now it's a real thing and and we've got them right around our office here. Right down the street. We have a Big one. So data centers are a big deal and are being driven by very high end and video chips. Now the other thing real quickly a lot of people don't realize chips are in everything.

Paul Truesdell, II  15:11
That's an understatement. That's an understatement.

Paul Grant Truesdell, J.D., AIF  15:13
I remember a fella who's also named first name is Paul told me you know, chips will be in everything you can possibly imagine. And, and I didn't I didn't I didn't see it. I didn't I did not see it. I wish I had given him more credit. He was wrong on just about everything in the world except for that one item but a you know, hey, you

Paul Truesdell, II  15:37
know, you know, you know, they say every, every every gambler, every gambler quits right before their big wins. So yeah, you gotta keep going.

Paul Grant Truesdell, J.D., AIF  15:45
He's kind of like a clock he was he was used right? twice, twice in a day. But But yeah, so you what we got here we got chips doing everything in the world. I mean, we're recording us we've got a computer that is pretty damn powerful. And it's, it's screaming. We've got a gigantic monitor that I'm looking at. And it's it's screaming, you've got your computer. I've got my phone. We're all going to glow from the

Paul Truesdell, II  16:08
the only thing in front of us that does not have chips in it. Are the microphones. Oh, yeah, there you go. But I mean, at least a digital chip, there was probably some analog stuff in there. as well. There definitely is no getting the power and doing doing some doing a couple of simple things.

Paul Grant Truesdell, J.D., AIF  16:24
But I do know that I have a coffee cup and there's no chip in it. But because you don't

Paul Truesdell, II  16:28
have the coffee cup that tracks how much you drink because you're too dumb to remember or market data.

Paul Grant Truesdell, J.D., AIF  16:33
There's probably a chip in the coffee maker that.

Paul Truesdell, II  16:37
No, no, it doesn't. It's all analog. Yeah. But yeah, but you know where I'm going. It's just speaking of which, I mean, that is an art that is dying. And it's funny because I mean, analog, analog devices, everything. Yeah. But But analog device design is a dying art. And what's funny is, you know, when every When, when, when a real X class solar flare fries are stuff and not just, you know, one at&t Like relay tower or something like supposedly happened recently or something. People are gonna be wishing they had some analog devices around. So the good

Paul Grant Truesdell, J.D., AIF  17:18
news is, we haven't done one of these in a long time. And for those of you who do listen to us on a fairly regular basis, I apologize. Paul, and I have just a Paul, the younger Paul, the elder Omni elder, we've been just incredibly swamped. And so big giant apologies for that. We had previously said, we were talking about solar flares and how they affect things, but we'll do that another time in detail. That's

Paul Truesdell, II  17:41
an evergreen topic right there. Oh, god. Yeah. But yeah, so So Nvidia is interesting, because their history is, is one of kind of really always being ahead. And Jensen in particular, has obviously seen the future. And, and he he knew where it was going. So, you know, they developed this this graphics calculation interface for their cards, and continued to promote it and put all this energy behind for you know, in a very serious way, like first class developer support and all kinds of stuff for people that were using it you know, hoping to get it into in every which way in, in business and into the development pipeline of the future. And like I said, I mean, it struck gold with in a in a very, I don't know, unsavory way with with cryptocurrency. But with AI, it's very mainstream. It's not something that's viewed as silly or

Paul Grant Truesdell, J.D., AIF  18:46
unethical. Yes. And our topic we need to talk about we need to go through history of cryptocurrency and talk about chips. Talk about free power, talk about the interest in relationships and all that. Yeah. Hogwash. People that are out there at the dog coin and all that kind of stuff. Oh, there's weed that

Paul Truesdell, II  19:01
there's we could talk about that every week. Until both of us die. It isn't. It is, you know, the other topic or ending?

Paul Grant Truesdell, J.D., AIF  19:09
Yeah, there's, there's and we need to start talking more on is a we need to start talking more about China. Because there's a couple of topics that we are going to talk about. I'll just do a quick plug here. We're going to talk more and more and more about Russia and Ukraine, we're going to talk about in just a second, I'm gonna move into the chip manufacturing as it applies to Russia, and the Ukraine war. But there's a couple of topics that all relate like the video, we've got to talk about it because one of the things I told you the other week, I said, you know, the problem with the video is that I'm at an age now where I begin to remember things more and more and more. And in 1999, for those of you who are not familiar with things of George Bush was running against Al Gore to become president knighted states, okay. And Clinton was president and Bush was saying, you know, We're already in a recession, things are going down and we've got to do things, the powers to be in the Clinton ministration. We're saying things like, Yeah, you keep saying that you're gonna cause it. Okay, that's there's some truth to that. But the reality is in 1999, if you take the 10 largest companies by capitalization out of the stock market, stock market was down. In 1999, it was up. And then of course, in 2000, we had the.com, explosion, everything blew up. And, you know, 911 occurred not too terribly long after the election, and all that sort of stuff. But if the Vidya is a major, major component of the growth stock market, now, I'm not saying it's, it's a sole driver,

Paul Truesdell, II  20:44
it's one of them. But if you take

Paul Grant Truesdell, J.D., AIF  20:46
the video out of it, we don't have the big run, like people think we do. Oh,

Paul Truesdell, II  20:51
no. But honestly, that's most, that's most bull runs on the market, they're driven by a couple of trends, and everybody else gets dragged with it, depending on the general health of the economy.

Paul Grant Truesdell, J.D., AIF  21:02
Right? Right. I mean, look, the the guy who pushes the broom gets a pay raise when the boss makes a, you know, a billion dollars a year, generally speaking, yeah,

Paul Truesdell, II  21:10
so So to kind of go back and just kind of do finish the brief overview on why they're at further app, you know, kind of given the the cultural reason why they're at, you know, AI, machine learning is the driver of this, and the competition just simply really doesn't exist, at least on the large data center side, I mean, AMD, they're the only other company that makes graphics cards in any serious quantity. AMD is competing with them as hard as they can, but they neglected their, their graphics design department for a lot of years. And have been in the process of rebuilding it over the past, I don't know, five, six years. And unfortunately, you know, they're just, they weren't as prepared for this as in videos. And so why wasn't video prepared for this the way compared to everybody else. So like I said, they invested in their, their, their, let's call it their math calculation pipeline, right. That was they kept that just as important as the graphics, even though there was very little demand for it by, you know, sales, kept pushing it, pushing it pushing it, and they invested in strategic technologies that would help them in the future. And this is one of the things I think a lot of people just simply don't have much knowledge of, I don't hear anybody talking about except for a handful of nerds that do semiconductor analysis and stuff. And they've they own Kamba, I can't remember off top, my head, the name, they bought a company. Well, a series of companies that basically own network technologies. So they applied a lot of their r&d and stuff to not just taking the big graphics cards that use for gaming, and then applying them to a data center. But then also being able to link them using proprietary networking technology to other servers in the data center. That's huge. So that you link them together. So they create low latency, superior shared pools of memory. Yeah. And, and basically extremely fast interconnects across not just the cards themselves in a single box. But now multiple boxes together and an entire rack and on multiple racks together and on and on on now you have I'm sure there's there's some reasonable limits, but I my understanding of based on, this has been a couple of months since I dug into this. But you know, they're in the, I think there may be totally wrong about this. But I think they're approaching like a terabit a second of bandwidth between, say boxes, which is insane. But you know, when you're loading a graphics card with 200 gigs of RAM, you have machine learning, I mean, there's no other I have to it's It's wild. Or it might be more than terabit. Because a terabyte might be 400 gigs a second, something like that. I can't remember exactly. But it's, it's crazy. It's like it's a number that is beyond normal calculus. Well,

Paul Grant Truesdell, J.D., AIF  24:20
understanding its

Paul Truesdell, II  24:21
high end data center math. I mean, I, I read up about this several months ago. And it's interesting because there's, there's a handful of reasons basically, bandwidth and data centers in between machines, like it like doubles or triples every few years. And it's based on how efficient they can leverage the fiber strands. It's how they can multiplex the data, add fiber strands that are utilized them better be able to process the data coming in and out of them. You know, it's just it's this weird math equation. And you know, where like Moore's law applies to silicon with data center. Communication Technology, it's just as important. And it's funny because there's actually like three variables at play. And they all move at their own kind of like a rough, you know, approximated cadence. Right? Right. So there's this just kind of weird. Let's call it excellent exponential increase. And it's for one of these three reasons. So anyway, it's interesting, because the, you know, you go forward, and they have this huge, it's not a monopoly. But what they, what Nvidia does is they sell the datacenter graphics cards, for high performance computing, a, they sell them in combination with the networking equipment. So people forget, that's the reason they're dominating, because nobody else has this, you know, you have competitive products from other companies, but they don't have both of those pieces together. And, you know, Google has their own proprietary internal silicon for machine learning in their own data centers. But they simply won't be able to compete on the open market, without a networking solution that they can also sell with it. AMD is stuck with the same problem. Intel, if they were even remotely thinking about competing, which they are, I don't think they are and what the hell happened to them. That's a whole another day's discussion for another day, because it is a it is a weird situation. And I think their prospects could be bright, if they are able to keep moving forward and turn things around over the next couple of years. But anyway, it's so so so Nvidia is really just they, they invested in all the right things, they were positioned very, very well. And they just got extremely lucky with the combination of events with regard to machine learning and, quote unquote, AI. As as the as the public knows that. And that's where they're at. That's what that's why that's, you know, if the fat of AI goes away in videos going to have hard times, the likelihood is that's not going to happen. So yeah, it's an interesting trajectory they've been on. Again, it's it's a lot of people think it's an overnight success, as you said earlier, and it couldn't be farther from the truth, it's 30 years. It's an overnight success. 30 years in the making. It's also a lot of very good decisions by by the founder and CEO. But I

Paul Grant Truesdell, J.D., AIF  27:32
think also you had mentioned, I think we should discuss just real briefly, excuse me, the fact that his cousin, and you have a family relationship when it comes to manufacturing in Taiwan.

Paul Truesdell, II  27:46
I don't know about manufacturing. But I know just from a thing that was in the media, of somewhat recently that AMD is run by a woman by the name of Lisa Sue. And she's this new turnaround CEO they hired probably, let's say five, six years ago or something, she's done a very good job. And he was basically left for dead by private equity and, and mismanagement. And she's really turned the company around in a serious way. But it turns out she's a she's like a distant cousin to to Jensen. I remember seeing a family chart, family tree chart. Now that I think about, I can't say exactly what what their, what their family distances. But anyway, it's close enough that it was worth it's close enough that it was worth mentioning.

Paul Grant Truesdell, J.D., AIF  28:45
A couple of weeks ago, I saw a Joe Rogan podcast where he literally said I have to go to the bathroom. He took a break and the other guy said okay, ma'am, me too. So he came back, we had a quick, quick break not because of the bathroom, we had a computer issue that was unrelated everything we had to get fixed. So let's pick this back up here. One of the things that I just think that it's important always remember, never forget is that as an investment advisor we do we do a lot of research, a lot of forecasting, a lot of a lot of digging, it helps to be an autodidact, but you me everybody around here does that. To do the research. It's all about an investigation. People call it diligence. I just call it a good old fashioned investigation. You got to follow not only the money, but you got to follow people, you know, like the Pay Pal mob, you know, I mean, those guys did very well for themselves if you're in it. Same thing with jobs. And you know, Steve and Steve, but my point being is that you got to is who's connected. A lot of times it's marriage and family connections. And I just think it's really cool for example, that you have all these new people in technology that remind me when I was a kid of When we heard stories about how cool it was at IBM, how cool it was at Kodak, how cool it was at Polaroid, how cool was that? You know, like, nobody talks about this anymore. But how, you know, the assembly line production was created by Henry Ford and all these things from years ago. And now they kind of like drift away. But there's always a need for the brainiacs and people who know how to do math. And you know, these people are not the people who are doing this are not diversity hires, these are people that know exactly what they're doing. I don't care what I don't care where they come from, can you do the job?

Paul Truesdell, II  30:37
Well, yeah, in video, the thing is emphasises, you know, the manufacturing component of extremely high end. microchips is hard, or a lot of very hard problems to solve. They're typically, you know, typically, each design requires solving hard problems, even if the process stays the same. And that's a lot of very strange physics problems that they have to solve to get things to work. But the other thing is the design of these chips is not an easy task. It is extremely difficult. The problems they're solving are extremely specialized, that, you know, we're talking literal handfuls of people in the entire world, have the knowledge and contextual bass to be able to solve them. So, you know, this is a this, this is a,

Paul Grant Truesdell, J.D., AIF  31:36
I think I'm gonna emphasize what you just said, there's a handful of people in the world. That's, that's an absolute God given fact.

Paul Truesdell, II  31:44
No, I mean, we're talking maybe a few dozen, if we're lucky to have, you know, the, you know, at the top end, to do some of the stuff that these guys are doing. You know, when I say these guys, I mean, the various companies, you know, AMD, Nvidia, Intel, the silicon manufacturing, and I'm not talking about specific people, because, you know, it may take one guy at one of these companies that does fingers one little thing out, and then everybody can exploit it. And that's the product. Right? It's, it's, it's really, really, really amazing stuff. And that doesn't even count the people that make, you know, the the machines that make the chips, because, you know, while the people like TSMC are very valuable. They don't make the machines that make the chips, right. All they do is they buy the machines, and figuring out how to use them properly, which is a challenge in and of itself, like people,

Paul Grant Truesdell, J.D., AIF  32:47
that whole supply chain manufacturing chain that is that again, I because we have so little that in the United States, and so little of it concentrated in one area where somebody can go like, Oh, yeah, what's the area in China? I can never get it. We're literally you can walk and get anything you want in the world? What's

Paul Truesdell, II  33:08
central Shenzen Cintia is one. But that's they don't do a lot anyway, of silicon manufacturing there. What I was referring to the assembly and lower end stuff, but yeah, what

Paul Grant Truesdell, J.D., AIF  33:24
I was referring to is the fact that there are very few places in the world where I guess I would say, like the New York Stock Exchange used to be located in New York, the you used to have floor traders used to have people who talked about things, and now everything is digital. And I think you lose something when you don't have people who can interact face to face. The phone and video conferencing are never the same. Sure. So and the other thing is, I you know, I like to think that you have the quantitative analysis, you also have the qualitative analysis, that the person who is the manager is never going to be the person doing the programming. And people in management have to be able to let weirdo Bob do his, you know, he doesn't, maybe he doesn't bathe and he has long toenails. But he's a he's a, he's a wizard when it comes to figuring out the mathematical calculations of how to do this, that or something else. It is a really, you know, some of these people are interesting cats. So we had that TV show called Silicon Valley and it was just it was, it was very, very good and showing all the different personalities that you could have in

Paul Truesdell, II  34:38
Silicon Valley is funny because I saw a quote about that the other day. Sky said that. Let's see here. I saved it. Yeah. Nice. Guy said somebody asked me if Silicon Valley's or HBO Silicon Valley was accurate. And I said no, it's much weirder. It's great. And he told me, he thought he was joking until they told him about a venture capital friend who was a flat earther. But yet he still invest in space technology because the government has to make it look like it works. And he's right, because, you know, while that's a funny anecdote, and you know, maybe made up because the internet can't prove it, but it's a funny, it's a funny comment. You have stuff that is just as strange as that. Look at Marc Andreessen. Marc Andreessen is, you know, one of the guys that runs Andreessen Horowitz, large venture capital firm in Silicon Valley. And you might think it's a joke, but yes, he does look like he is straight out of the casting for the movie. Coneheads. Yes, nobody will know what that means. If they're, you know, younger than me, but anyway.

Paul Grant Truesdell, J.D., AIF  35:59
No, it's true. He goes, he looks like go back.

Paul Truesdell, II  36:03
And this is the genius that I mean, the company, they invested tons of money into we work and then Adam Newman gets shuttled out of the company. The company has is going is bankrupt. They're going through bankruptcy procedures. They give Adam Newman like $350 million. It made him a billionaire. But this is a new for a new venture. That is basically to do we work but for apartments. Yeah. Guess what? that already exists? It's called apartments. Yeah. Called apartments. Whoo. apartments with technology. Anyway. There's so many funny Andreessen Horowitz stories, especially around crypto. Like I remember I think it was them. They were put doing a big push into cryptocurrency so they forced all of their what do they call their? Their like managers? Anyway, they have they have a an investment sounding name for the people, partners or whatever, at one of these venture capital firms anyway, and they forced them all to go get series 60 fives. Yeah. Because because they were going to be doing so much cryptocurrency investing fortunate was getting regulated. They were worried they would get snagged by the SEC. Seriously, I'm not joking. That was a waste of time. It was a huge waste of time. I'm sure they washed out a lot of their people who went to other firms because this is insane. Like, I'm out here, my entire career has focused on sniffing the Bs in the air and trying to find a decent companies to invest in. And now Now we're going on the cryptocurrency like, like scam train, like it's just insanity.

Paul Grant Truesdell, J.D., AIF  37:49
You know, here's what I want to do. I'm going to, we're going to wrap this up, because we're about 40 minutes in this saying, what I'm gonna do is I'm going to outline what we talked about, pick it up on the next episode is do that. I do want to I do want to leave with one thing. There was a group, a networking group in Tampa RGA, run by Phil white and Mark McDonald. And I didn't fit in with those people at all, for a lot of different reasons. But I was asked to give a talk and I gave a talk about we work. Remember I told you about that. Yeah. And I was talking about real investment advisory services and what you do and you have to call a hogwash, we see hogwash. And I went through, you know, if you look at the paper, all the different things you and I were really big in that we were way ahead of everybody else. We were yours. We saw through

Paul Truesdell, II  38:39
it immediately. Because you know, when you looked at the fundamentals, it was like this thing is this is office space leasing. Right? Why are people valuing it at this extreme thing? They don't even own most of the buildings. Yeah.

Paul Grant Truesdell, J.D., AIF  38:52
And so what I was saying to these guys, as I was saying that while this company is not publicly traded, and so most people would not worry about it like well, okay, they go bankrupt, who cares? But it's more than that. You have to look at who the who's who's putting money into it, who the VCs are, and it's not necessarily always VC money. You have people who are connected into these ETFs and the mutual funds and the pensions. There's lots of ways of getting a little bit of dribs and drabs. Okay, I'll give you 10 million. I'll give you 100 million. I'll give you this brace when you get real money. Yeah, as I affect your returns, as time

Paul Truesdell, II  39:25
has gone on. There has been more crossover between East Coast and West Coast finance, right. But yes, that is that is another topic we can talk about. Because how the let's call it the incestuous relationship in Silicon Valley and how it works at a big level. Like very few people talk about it's a very interesting thing. It's very basic, it's good business. They're not stupid people. A lot of their dumb looking investments make sense for a very obvious reason. Yeah. And it's

Paul Grant Truesdell, J.D., AIF  39:58
not obvious to the rank and file person no or, or the rank and file investor always remember 50% of the population doesn't have a pot to pee and 50% of the people out there have a little bit of money to invest. But it's still it's the 10% and 1% and even 1%. Because I deal with these people we do all the time. They don't know what's going on why things are done in a certain way. You're throwing money away. Nobody's gonna make money this Yeah, well, we will, but nobody else will. Oh,

Paul Truesdell, II  40:24
yeah, man, it's like 10 years ago, if you thought about Nvidia, it's like, well, I don't want to invest in gaming. Oh, yeah, just open gaming. PC gaming is going away. Because Because Because of mobile phones, like, well, mobile phones, did he clips and heavy clips, PC gaming or console gaming, I think they make 10 times the revenue or something like that I saw stat recently, but it doesn't matter. Because these these chips have way more versatility than just, you know, making pretty looking games.

Paul Grant Truesdell, J.D., AIF  40:53
Okay, so I'm gonna wrap it up. Here's what we're gonna do. I'm going to go through this for those of you who are going to be notified of this. We're going to put together a little outline of the things that we're going to begin talking about, and I'll put that in the show notes and a few other things. I'll take some time put this together. So we'll put together a list of things that we're going to talk about and you kind of can follow us with that. I'm Paul the elder and joining me is Paul the younger Yeah, like that. We're typically no taller to rod here, but the

41:21
Paul Truesdale podcast is sponsored by Truesdell wealth a registered investment advisor in a sea of sameness. Truesdell wealth is truly different, traditional, transparent, trustworthy, visit Truesdell wealth.com

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This was episode 330, produced in house at the Truesdell professional building.

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