Death of jobs: leverage and accelerated automation

Topic: high leverage and faster pace of automation make it exponentially more difficult to re-train enough people for new jobs

Solution: Buy Google and gold (many more companies in my newsletter)

Length: very short (a few minutes’ read)


Executive summary: Low interest rates and technological progress accelerate the ongoing process of automation, leaving more people needing -but less time for- re-training.

Low interest rates also mean more indebted consumers and governments, and thus less money for re-training the increasing hordes whose jobs are being automated away.

Swedish: Plus en länk till en paneldebatt i Lendifys och Börspoddens regi, om nya investeringsmöjligheter


Leverage and Machines are at the heart of the issue

low interest rates make capital relatively cheaper than labour 

investments in automation have picked up speed due to

  1. accelerating technological development (“Moore’s law”, or, rather Kurzweil’s Law Of Accelerating Returns) is pushing technology over the threshold needed to replace humans in many areas in short order, thus attracting more investments
  2. low interest rates make investments in technology even more attractive

Thus, automation is proceeding faster and in more industries simultaneously than ever before, leaving more people than ever (at best) between jobs.

Low interest rates have fueled the build-up of debt among governments and private individuals. Despite lip service to deleveraging since 2008, debts are much higher today than at the “peak” 8 years ago, leaving less room for debt-financed re-training for new jobs. 


Leverage => more machines, more debt => less jobs, less re-training buffer

The same forces that make automation investments more attractive and all the more people lose their jobs to machines, also work to make it more difficult for people to be able to finance re-training (one, because they are already over their heads in debt*; two, it’s happening faster and in more industries at the same time than before, leaving less time to re-train)

* Earlier, people hadn’t maxed out on credit card loans, auto loans, mortgages and student loans, which meant the few who lost their jobs to machines had some leeway in time and money to re-train for new employment.

Now, more people are automated away at the same time and they have more leverage and thus no economic room for time off or investing in re-training.


Goldman Sach’s take on the subject in a recent podcast of theirs called for new ways of financing re-training, including re-purposing (expropriating?) pension money. I, however, think that ship has already sailed.

So, what to do?

My 2 cents: Make sure you own assets that benefit from the changes, since I expect it to get really ugly first, in a way money printing can’t mitigate, before it gets better and we can approach the Star Trek ideal of no money.

The Sprezza (and Star Trek) credo

The acquisition of wealth is no longer the driving force in our lives.

We work to better ourselves and the rest of humanity

You could, e.g., buy stock in automation companies of all kinds (robotics, software etc., including a few dozen companies on the list in my next subscriber letter). You could also buy assets that benefit from low or negative interest rates, increasing debt levels and a possible monetary re-set.

Google, IBM and gold spring to mind.

gold for consumption

palatable?

Please note, however, that I do think it’s a little early to start preparing for a complete collapse just yet.


Links to previous articles on technology and jobs:

how tech steals your job, one

how tech steals your job, two

three about robotics

future careers

and Dutch disease


If you speak Swedish, check out this free investing seminar, with me and Ann Grevelius, in Stockholm on October 25, 2016.

Redan efter ett dygn är hälften av platserna slut så bestäm dig snabbt. OSA 20 oktober. Här är länken till fri dryck och tilltugg samt paneldiskussion om framtidens investeringsmöjligheter.

lendify

Why Deep Work is essential for keeping up with robotics (career and investment opportunities)

Executive summary: AI is coming. You’d better think about your career and investment opportunities in AI and robotics. And the importance of Deep Work to keep up.

Hint: Google, FB, Amazon

Length: 2128 words


The robot overlords are drawing closer

Finally a machine beat a decent player at the ancient eastern game of Go. With decent I don’t mean an Asian grand master, but at least a three time European champion.

google deepmind

Artificial Intelligence keeps progressing, no matter whether you know about (or like it) or not.

First an AI application is typically seen as a curiosity. Then it becomes a tool you need to learn how to use. And eventually it will develop to the point where it could take your job.

IBM’s Watson easily beat the world’s best Jeopardy masters several years ago. Since then it has become the world’s foremost oncology expert.

Currently Watson is on its way to start replacing swathes of paralegals at law firms as well as finding new oil reserves. A few years down the road, anyone with a cellphone (or AugReal contact lens) will be able to tap into Watson-like powers for any kind of search or research.

IBM Watson onc 2

Over the coming 20 years, most jobs will be affected by the progress in robotics and AI. Hence, even if you are aiming for future-proof industries (The 5 Singularity Enablers or The Big 5 human issues, or, most likely, a combination*), you’ll nevertheless need to learn to work with robots and artificial agents, or risk replacement.

*I have mentioned the 5+5 in earlier posts on job security nr 1 and nr 2 and my post about programming: nanotech, biotech, AI, robotics, additive manufacturing and energy, water, pollution, food, longevity/health

 

Professions at risk

If you’re flipping burgers, sewing garments, assembling consumer electronics, building cars or houses, reading court cases, writing (sports) news, trading stocks or driving any type of vehicles for a living, you’ll soon be out of work (except if you can leverage the new technology in some creative way).

 

Deep Work makes you change-resistant

To stay one step ahead of the AIs; to be a fast learner as well as able to tap into your most creative powers, one indispensable skill for the future will be the ability to perform deep, focused thinking and problem solving, i.e., Deep Work, in the words of Cal Newport.

Rather than allowing various notifications from e-mail, Twitter, Facebook. Instagram etc. to force your days into shallow, responsive, always on-line type of activities, you should practice going off-line and “deep” for longer stretches of time (30-90 minutes) as often as you can.

deep work cal newport

Buy it, it may be your best investment ever

Deep work restructures your brain, making it easier going forward to enter a state of flow and focus, and thus becoming more and more effective, and increasingly able to perform above AI-level, not to mention quickly learn new skills, including how to use new (AI) tools.

Meditation helps too, but that’s just too weird and Eastern for most – at least if we’re talking about 30-minute long sessions or more. I myself had much rather turn everything off for 90 minutes and solve an intellectual problem at the top of my ability (writing a blog post, a new book, or working if I had a job).

 

If you can’t beat the robots, join them

This Tuesday I (and my dog Ronja) talked in front of 400+ engineering students at Sweden’s top technological university, Chalmers. I specifically remember three interesting questions.

  1. What made your fund so successful?
  2. What advice would you have given yourself as a student today?
  3. What would you have studied today?

ronja chalmers

Answers to important questions are superpositions of the entire spectrum of answers

What’s particularly intriguing about the first question is that my number one success factor was also the number one negative at the same time:

Being unbiased and fundamental

It worked extremely well over the several bull and bear waves during my career (1994-2015). On the other hand, being unbiased and fundamental also made it all but impossible to ride the bull waves (“bubbles”) long enough – in particular the last one (the quantitative easing bubble that finally seems to be bursting).

I often find that the most important questions are answered in the same “how long is a piece of string” fashion. Learn to recognize and acknowledge those situations, rather than dislike them. They provide you with a much wider range of choices than clear-cut 1 or 0 situations.

 

Have fun no matter what you do (Sinéad O’Connor)

Nr 2 is also easy: Direct your studies and career toward something that interests you, that you like, that gives you the “unfair advantage” of having your favorite hobby as your work.

No matter how successful (or not) you get, at least you had fun on the way. And, given the unfair advantage, you’ll probably change the world in some positive way and become rich/famous/of stature, no matter if you want to or not.

Build authority through usefulness (for you and others), not (empty and meaningsless) celebrity or wealth

Sprezza and Ronja at Chalmers

I however began by saying that I myself would never have listened to such advice, and that I didn’t expect anybody to do it today either. At 22 I was too focused on making money, or at least on getting a job, any job. In my eagerness to become independent I as quickly as possible put myself into wage slavery and the consumption rat race.

In my defense, I hardly understood the concept of starting a business. I had a very static view of the world and kind of thought all companies already existed.

Hmmm, that didn’t make me look any better did it?

 

Resistance is futile

The third question could have been answered in a myriad more or less complicated ways. To keep it simple and clear, I boiled it down to one single word: Robotics.

robot sprezzaturian

Going east, to Japan, China or South Korea, is preferable for anybody going into robotics. However, it probably isn’t necessary – and France, Germany, The U.S. and Sweden also hold their own within robotics. It’s even possible Google and other U.S. companies are on their way to overtaking the Asians.

Except for North Korea of course. Their mighty leader has already built a super strong general AI that will rain fire over the western subhuman devils. Just recently, e.g., Kim Jong Un’s AI crafted the most efficient and gloriously superior hydrogen fusion bomb that history will ever see.

KJU

I wonder if he has any idea how funny he is

 

Why robotics?

Because everything comes together there. And it’s the most future-proof industry there is.

If you want to get really dystopian, in the future the only humans left are the ones tending to the robots. In a parallel universe, robot owners and robotics stock owners are the ones holding the upper hand.

 

The geeks shall inherit the earth

 

Robotics is industry’s equivalent of Deep Work. Every single part of a robot is developed at the leading edge, at the top of everyone’s ability; technology, biology, biotechnology, neurology, philosophy, psychology, programming, materials, motors, artificial intelligence. The combination of these into useful and robust machines demands even more of the creators (i.e., you).

If you are wary of being made redundant by automation (and you should), the obvious solution is to be the one controlling the automation (and inheriting the earth).

 

It’s not “just robots”

There is so much to do in robotics: vision, balance, appearance, movement, safety, reasoning, emotion, interface, power source, touch, control. And each of those need to be craftily integrated with the others, e.g. vision, prediction and balance.

robot worm sprezza

Take just vision as one example. Ideally you’d want to combine radar, ultrasound, stereo vision, texture analysis algorithms, laser, object data bases, blueprints, recent memory, inference algorithms etc. in one single system, in order to rapidly and reliably map the environment in 3D, as well as make forecasts for the coming milliseconds, seconds and possibly minutes to prepare probable movements.

Similar issues are facing research teams within, e.g., balance/movement (motors, artificial muscles, scenario simulation, limb synchronization. machine learning) as well as other important sub-segments of robotics.

At the user end, there really are no limits to where robots and AIs might go: industry, care, household, status, services, shopping, news, education, search & rescue, surgery, research & exploration, sex/porn and on and on. Every single area of life and business will be affected in the coming two (or maybe three) decades. Read more about the steps to AI here, or read, e.g., Kurzweil’s book “How To Create A Mind”.

Simply put, robots is where all technologies converge. It’s a place to perform deep, accelerated, learning and highly value added work. It’s a place where cross-discipline knowledge and deep, associative, and lateral thinking will come at a premium.

My advice is to take your favorite area (hobby), and combine it with some supportive technology and apply those in robotics. I can’t see how you could lose.

If you are an engineer, or psychologist, or designer; if you go into robotics and AI, if you take the “unfair” angle of doing it from the standpoint of fascination, you just can’t lose.

I may have told these guys at Chalmers that aiming for an employment at a big engineering firm, rather than starting your own business, would be just sad…

chalmers

On the other hand, I also told them they had no business worrying about the coming recession or not earning their livelihood. Very few, if any, of them will even notice the coming recession – except for from tabloid headlines.

 

Focus, go deep, and go robot

Don’t forget my message to prepare for a fast-changing world by practicing true, off-line, no notifications, focus, as well as perhaps playing Go and meditating, lest constant e-mailing every day will erode your protective myelin layers in the brain completely, making future deep work practically impossible.

Without the ability to perform deep work, even going into robotics won’t save you in the long run. So, leave the 99% behind and commit to stretching that brain of yours regularly.

But now on to something completely different, investing in robotics and AI companies

 

Investment opportunities

Sorry, there are no free lunches.

Well you didn’t think I would hand out free buy recommendations, did you?

handing out free stock recommendations

Anyway, here are some AI (and robotics) related companies to think about.

I’m not saying you should buy them (now) or sell for that matter, but they are definitely worth considering at the right valuations.

Since I’m sure you can come up with more companies, and more pure plays at that, I hope you’ll put those in a comment for all to share.

Top 5 most obvious AI companies

  • Alphabet (Google)
  • Facebook (M, Deep Learning)
  • IBM (Watson, neuromorphic chips)
  • Apple (Siri)
  • MSFT (skype RT lang, emo)
  • Amazon (customer prediction; link to old article)

Yes, I’m US centric. So sue me :)

 

Other

  • SAP (BI)
  • Oracle (BI)
  • Sony
  • Samsung
  • Twitter
  • Baidu
  • Alibaba
  • NEC
  • Nidec
  • Nuance (HHMM, speech)
  • Marketo
  • Opower
  • Nippon Ceramic
  • Pacific Industrial

Private companies (*I think):

  • *Mobvoi
  • *Scaled Inference
  • *Kensho
  • *Expect Labs
  • *Vicarious
  • *Nara Logics
  • *Context Relevant
  • *MetaMind
  • *Rethink Robotics
  • *Sentient Technologies
  • *MobileEye

General AI areas to consider when searching for AI companies

  • Self-driving cars
  • Language processing
  • Search agents
  • Image processing
  • Robotics
  • Machine learning
  • Experts
  • Oil and mineral exploration
  • Pharmaceutical research
  • Materials research
  • Computer chips (neuromorphic, memristors)
  • Energy, power utilities

No, I won’t help you with valuations. However, I just might tell you in my newsletter when I start buying.

 

Summary – deep work and robots

Rapid changes require fast learning of difficult material

Fast and solid learning requires deep concentration

Deep concentration demands time off from e-mail and social media

To prepare for the future, practice focus, use your time in deep focus to advance your skills and understanding of how you can contribute to the field of robotics.

And Go East (Japan, China, South Korea)

Or possibly west.

Or stay where you are.

And think about becoming an owner of AI and robotics companies while there is still time. I plan to buy some of the most obvious ones (including Google) in the ongoing market downturn (2016-2017).

 

Please help spreading this important post

I think this is the most important article I have ever written, and I would like as many students and other interested people as possible to get the chance to read it.

So, please help spreading it as widely as possible through your social networks: Twitter, Facebook, Google+ etc., and tell your friends about it IRL too.

P.S. “Subscribe” If you are new here, don’t forget to subscribe to my newsletter (weekly updates and retarded recounts) and get my free eBook about my 15-year struggle at the European Hedge Fund Of The Decade (“The Retarded Hedge Fund Manager”).

P.P.S. “Glorious future” No, I’m not dystopian. I actually think we’re headed for a glorious future. After a couple of years of economic and financial rout that is.

Lessons from life (right) before the Singularity

FYI: This 5-minute post about true desires, work ends in nano wars (albeit no super AIs, diamond rope elevators to space and such)

The only take away from the article is asking “What would you do if you didn’t have to work at all?”

 

You know Moore’s Law

(basically that computer technology improves exponentially, i.e. by a certain factor per unit of time)

no more full retard monsters and UFOs

 

picture from xkcd

 

Moore’s law is not new

It’s not alone

full retard view of moores law

It’s part of a longer trend of technology used to make better tools, in turn used to make even better technology, that forms the basis for ever more advanced tools and technology, each new step building on top of the preceding one. It’s the essence of investing.

It started with life itself (or even before that, with increasingly complex sub-atomic and atomic particles), including inventing the DNA and much later the brain, all the way to language, writing, the printing press, punch cards, transistors and so on. The silicon paradigm is not the first, and far from the last in the chain of increasingly effective information management.

It’s not just about computers, it’s prevalent in all information based technologies (which when it comes down to it are all technologies, including genetics, software algorithms, artificial intelligence, and with time and smaller scale even matter itself)

If trends continue we will soon routinely sequence every living person’s DNA down to the base pair, we will develop strong nanotechnology atomic manipulators, map the connectome and so on. And as Ray Kurzweil has pointed out since decades back, the rate of acceleration is itself accelerating. The latter fact has been hard to detect until now; even the first order exponential growth was difficult to identify until Moore made his observation in the 1960s; but it’s there.

The reason is that not only does one technology create tools for its own next generation, other technologies feed into each other, not to mention more and more people (and soon AIs) work on the same tasks.

full retard law of accelerating returns

 

Please note that the accelerating curve above is on a log scale, meaning accelerating acceleration

Imagine miniaturization leading to ultimate control over the bits of matter with the same precision as current control over virtual bits. Measuring, mapping, mimicking and improving nature down to the atom (deeper still?) will be as natural as recording, sampling and mixing a tune or creating a Minecraft universe on your computer.

You could build anything with the help of free solar power (made by same nanobots) and free source material (carbon and silicon straight from the crust and air). You would become immortal and freed of the need to do work for a living.

Remember that all issues associated with the material world would be solved: pollution, global warming, disease, hunger, water, power and death.

Assume the Singularity holds off for a while; that crossing the threshold into ever improving and accelerating superhuman intelligence proves a little more difficult than anticipated, thus giving us all some time (all the time until the end of the universe?) to live in the perfect retirement scenario of ultimate abundance…

What would you do as a full retard?

What do you think others would do?

I’m personally currently in a preparation camp of sorts for the full retard world, making connections in a network, bartering virtual goods, exploring my own true values, needs and desires – as if all my and the world’s material issues were already solved. I’m not working, I’m socializing and living.

I happen to enjoy learning and challenging my brain and body, then sharing as much of it as possible. I also adhere to a kind of Ahimsa anti-violence (initiation of…, but if you start then 3 lefts make a right in my book) philosophy.

Abundance won’t stop the fighting

Not everybody are like me, however. Some want to stay ignorant, refuse to give up their ingrained medieval habits (as if the eval=evil didn’t give the underlying truth away); some simply like mayhem and destruction. Stop here for a while to ponder that economists used to talk about the homo economicus as if he were real… No, man is rational given his own personal and impossibly complex premises, but he is nowhere near anything that could be called economically rational.

Botnets, religion, civilization and nano wars

The ongoing virtual war of viruses, worms, trojans, botnet domination etc. is nothing compared to the coming nano wars. Hopefully, the attacks will nevertheless be fewer since all economic sentiment will be null and void. Ah, if it just weren’t for the religious and fanatics… – Do you remember when some still could say “Without religion there would be no civilization” with a straight face? It’s a miracle (sic.) that civilization prevails despite religion.

What if you stopped dreaming about what you want to do in the future and did it right now instead?

Why not have some fun, or at least steer your skills in a direction that gets you fired up?

Again, what would you do if you didn’t have to work at all? Maybe the answer makes you realize you could work less already, and focus more on what you actually want.

ibiza pool jump