Intelligent Investing with Glenn Leest: AI Revolution and Its Market Implications Amidst Election Year Politics

Embark on a journey into the financial and technological future as Glenn Least from WT Wealth Management joins us to dissect the AI revolution's impact on everything from NVIDIA's soaring stock to our very way of life. You'll be privy to our enlightening banter about the rise of large language models like ChatGPT, deep machine learning's infiltration into industries, and the profound effects these advancements could have on your job, your creativity, and even your family time. We're not just analysts with charts; we're soothsayers at the cutting edge, forecasting how today's tech marvels might shape our tomorrows.

As we navigate the twists and turns of a presidential election year, we also cast our gaze over historical market trends and the vital signs of today's economy that could herald prosperity. Will the specter of a Trump-Biden rematch send ripples through the financial sector? Listen as we delve into the tantalizing world of political power plays and their influence on our wallets. And rest assured, we keep it lively with a dash of humor, musing over technology's portrayal from silver screen to sitcoms—ever wondered how Futurama might prophesize our futures with robots? Tune in and find out.

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Transcript

Speaker 1: 0:00

This market update is brought to you exclusively by Glenn Least at WT Wealth Management. You want to talk with Glenn? Here's his number. Give him a call right now for a complimentary consultation at 928-225-2474. That's 928-225-2474. Or you can email Glenn G-Least G-L-E-E-S-T G-Least at WTWealthManagementcom. Let's get right to it. All right, let's get a market update from Glenn Least, from WT Wealth Management Going to hit on especially NVIDIA, which is the big one that everybody's talking about nowadays, and how that one's really pushing the stock market higher and higher. But what's the economy looking like going forward in some election year Economics as well with Glenn Least and Glenn, how are you doing today?

Speaker 2: 1:01

I've been doing great. Finally, looking forward to there being no more snow on the ground in Flagstaff. Hopefully it's the last, but we'll see. Yeah, you hit the nail on the head. Some of the bigger companies are even driving the performance to the start of this year. One of the biggest ones that we've seen really kind of take off is NVIDIA. Um, they went from it being maybe 20th as far as the you know market cap biggest company in the world to, you know, now they're they're hovering, you know, in the fourth, fifth, sixth position. So they've been getting, I mean, they just had tremendous growth and, uh, the question becomes why have they seen so much growth and why, uh, what's right? I should say what's driving it? And the answer is really, uh, the emergence of artificial technology and where that's going to take us, and doesn't it?

Speaker 1: 1:56

doesn't seem good not to interrupt you, but we were just really talking about this emergence of ai. You and I, like a year or two ago it was like hey, there's this thing, kind of we've always known about it, I mean, we've, you know, we're all aware of like terminator and stuff like that, but it's, it's just really taken off like I don't, I couldn't have imagined just in the past year or two really yeah, um, so I said nvidia was four.

Speaker 2: 2:22

It's actually number three for the largest company in the world. So AI is a really broad subject or area. So it's like, ok, what AI are we specifically talking about? Because there's probably the one most people are aware of is the large language models. So that would be like your chat GTP, your Gemini, which used to be Baird, and those ones are really meant to kind of like a question and answer. You can say, hey, you know, do this research or find you know the top running shoe or whatever you want, and they scour the internet and then basically answer your questions, and in the form that maybe another human would. So that's really just that technology alone has changed how we do research, the education system. You can write a whole term paper, you know, with 10 seconds of typing into chat DPP, and it'd be pretty darn good. So I think that's, you know, evolving. But that's not the only area.

Speaker 2: 3:24

The other area that we're seeing is what they call deep machine learning, and so a similar process of the language models, but maybe it's learning a very specific set of data, so maybe it's studying weather patterns, and after studying weather patterns for so long, it could sort of not predict but, you know, definitely outline some tendencies of when this happens. You know there's a 50% chance that this storm happens and the deep learning could be anything from weather to finance to manufacturing. Manufacturing is kind of interesting. They'll show the computer you know 10,000 different Coke bottles or whatever it is, and show them how it should look, and so it knows, it learns all the intricate details. That way when it comes across the assembly line that doesn't meet that criteria, it automatically knows to pull it and send it back to be remelted down. So it's really kind of. It has an exciting part to it but also has the dark side as well. You know we, you know, terminator being one example.

Speaker 1: 4:36

Yeah, the extreme case.

Speaker 2: 4:38

Yeah, the extreme case. But so I'll pose this question. We all thought all this new technology in the last 20 years was going to make our life better and easier, and in reality, I don't know that it has. I mean, if you think about having a smartphone in your pocket, yes, you can be more productive with it and have access to information, but you could also be on YouTube or Facebook for hours on end and not be productive at all. So I think humans naturally have the tendency to not want to work, and so AI definitely compounds that issue.

Speaker 2: 5:13

And what impact will it have on the job market? Will it make our lives better, which would be obviously the hopeful case. But I think it goes the other way too, where people just I talked to my kids the other day and I said, hey, do you guys realize that if I want to, I can live my whole life of never leaving this house? I can have my food delivered, I can have restaurant takeout orders, I can do my work via Zoom order everything on Amazon. And I was thinking about how strange that statement was, because 25 years ago that was like couldn't even fathom that statement. So lots changed.

Speaker 1: 5:49

Yeah, that was like this weird stuff of science fiction movies. Oh, there's going to be a car that drives itself. Oh, there's going to be a drone that delivers stuff. You're crazy. Oh, to be a car that drives itself. Oh, there's going to be a drone that delivers stuff. You're crazy. Oh, you know, I mean, I, I like to watch old reruns of, like Star Trek, um, like from the eighties and nineties, you know those, those different episodes of Star Trek, next generation, Star Trek, Voyager, things like that, Um, and the stuff that they had, the how they projected the future was like, wow, that happened, like in 20, 30 years.

Speaker 1: 6:15

I mean, I'm not talking like warp, warp speed here or anything, but just like the devices that you know, talking to the computer and all this stuff. It's come on so fast. And I think you pose a really good question, Glenn. Or observation is are we? Are we really that much better off? Are we reaching a point? Yeah, we have all this technology, but are your lives really that much better off? Did we have it dialed in, just, you know, 10 years ago even? And are there such huge advances coming that, yeah, may increase productivity or you may have more stuff and more access to more information, but are you miserable at the same time, and I think that's something people are going to have to get a grasp on, Glenn.

Speaker 2: 6:56

Yeah, and I think the big takeaway as far as, like, the job markets and just you know us as humans, you know like what will jobs look like in the future and I definitely think that more mundane jobs are going to get automated. It's just, it's inevitable. So if you're their worker working kind of an entry-level mundane job, you know it would behoove that person to continue to grow this skill set to the point where you know now that they can maybe use AI as a complement to you know their job. And AI is not replacing their job, but it's a tool to help them, you know, be better at the job that they're trained for and have the skills for. So I definitely think there's going to be a, you know, hard, rude awakening for people that haven't invested in their skillset or just kind of working those you know, more entry level jobs that can be automated. So we'll see.

Speaker 1: 7:51

It's a good point and and also the purpose of like, you know, if you can just sit around and it's convenient all the time but you're not achieving anything at some point and you're just streaming stuff. Or with this technology and Nvidia is a big one but all the companies are coming up with, like the um, virtual reality and people are walking around. I can't remember if it was Apple or Google, whoever. They keep reintroducing the new glasses where they're filming everything. Everything's a reality TV show at this point.

Speaker 1: 8:16

Uh, I don't, I don't think we're wired for that and I don't think we're wired to all sit at home and not, uh, interact. You know, usually usually come into the studio. I got just crazy schedule right now with trying to get ready to go away and stuff but usually, you know, we like interacting, we, we talk a little before, talk a little after. You know how's life, things like that. Uh, we're losing that and maybe there'll be a new movement. Maybe, maybe in 10 years there's gonna be some, you know, hippie commune movement where there's no technology allowed, where you got to go to like some tent or something to, you know, get online, I don't know. But back to nvidia um, they actually make the like the chips and the boards like the technologies. Is that correct?

Speaker 2: 8:56

yeah, um, think of it as the brain of some of these large language models. So, yeah, so the ai technology wouldn't be possible unless they have the computing power to facilitate it. And okay, that's going to be more and more of a important part of driving ai forward is who's going to supply the brain. You know, for you know implementing these AI technologies, and the better they get at the chip and the more technology they're able to incorporate, the better AI can become as well. So I think they kind of go hand in hand.

Speaker 1: 9:29

And just my quick probably AI search here says NVIDIA holds approximately 80% of the global market share of GPU semiconductor chips as of 2023. So it's a Silicon Valley company. So there are. They've already got that very much cornered. Are they the one that becomes the next Google, Apple?

Speaker 1: 9:48

You know, that's just the big behemoth of Microsoft going forward, but what I've noticed and I'm going to get your take and, by the way, it's Glenn Least with us with WT Wealth Management, and you know Glenn really knows this stuff and studies this stuff a whole bunch, and, Glenn, what I want to get your take on, though, is when I'm looking at stock price increases and the market's kind of cranking up. It's like five stocks that are driving up the whole market, of which NVIDIA is one of them. Yeah, of which Nvidia is one of them. Isn't that a bit concerning that? A lot of, because the stock market is made up of many, many, many companies, hundreds and hundreds and hundreds, and you got five stocks and Nvidia being the real big one that's really driving the market up to record highs, and then some of the other companies within that group of five or so are relying heavily on Nvidia for buying the stuff your Googles and so on and so forth. Are we getting a little too non-diversified? I guess Does this concern you.

Speaker 2: 10:48

So if you look at some of the biggest companies in the world your Apple, your Microsoft, your Alphabet, also known as Google, meta, nvidia you know all those companies. Ai is a big part, becoming a bigger and bigger part, of what they're doing and where they see things moving forward. So we have the joke at our office that if you're doing a company's earnings call, if they even mention AI or the word AI, artificial intelligence, their stock price shoots up through the roof Because, funny enough, ai is actually combing and listening to the earnings calls and probably have some sort of algorithm that when this gets mentioned, oh, can the stock price up? I mean, they do the same thing with Jerome Powell. Like it's kind of interesting. You can see the market, you know against him speaking in real time and you can see as the words he says. The market spikes up or down, and that's not humans sitting there doing that, they're not that responsive, but it's AI technology.

Speaker 2: 11:47

So you know it can be a little bit concerning. For sure I think there's going to be competitors that come out. Nvidia can't be the only show in town. I think there's going to be more options as time goes on, but no, nevertheless, there's certainly. There's certainly looking like the 800 pounds of drill in the room. For sure, yeah.

Speaker 1: 12:05

Yeah, I mean it was. You know, anytime somebody gets that good, somebody comes in and starts making similar products. It may take some time, but that's the market. I mean it happened to Intel. You know it happens time and time again. I remember an Apple was you can barely give away that stock, right.

Speaker 2: 12:29

Yeah, ibm is not even like one of the most heavily traded stocks in the 1980s, I think. And if you ask someone what IBM is now, they go. I don't know who are those guys, you know? International business machines yeah.

Speaker 1: 12:37

Yeah, it's kind of funny because Apple used to grind on IBM back in the late seventies, early eighties, and IBM was the big brother Remember the big big brother commercial they did there in the Superbowl in like 82 or 84, whenever that was and then, really, apple became that same exact thing, fast forward, you know, a couple of decades. Well, we'll see what happens with the market. I do get concerned, though, when we're relying on just a few stocks and so many people have nowadays so much tied up in all this pensions. You know retirements and this and that, and it'd be nice if we saw kind of the whole thing going up.

Speaker 2: 13:10

You know all companies doing, doing well or not all, but you know more than five, yeah, five yeah, I mean some of the other ones that have you know had a good year, like, uh, your amazon walmart, um, even some of like the international companies, like uh, your saudi, uh, saudi arabia, um, their oil juggernaut company, the saudi aramco. Aramco, yeah, how do you pronounce it? Yeah, something like that. It's a massive oil company. So, in my opinion, oil's not going anywhere anytime soon.

Speaker 2: 13:46

It's just such an efficient resource and easy to transport, easy to store, you know, can combust and power our cars.

Speaker 2: 13:54

So, yeah, they'll continue to be big, but, yeah, I think there is a concern of having too much concentrated in those, you know, couple stocks that are really pushing the envelope and pushing forward AI technology. And I think you do bring up a good point as far as, like, people taking a step back and saying we don't want as much technology around and maybe at the dinner table we need to get back to just sitting there around the table and just talking, because that's something that has been definitely diminished over the last couple of generations. I think about my kids are funny. Whenever we're in the car driving, if there's not a movie playing, they're like oh my gosh, I'm so bored, why isn't there a movie playing? And I'm I just remember sitting there looking out the window like there's nothing to do when you're in the car driving. And yet you know the current generation, my kids are like it feels like they're being starved, I guess, if they don't have a movie on every second. But it's just different.

Speaker 1: 14:56

Yeah, it's different and it's constantly stimulated, I guess, nowadays. But then I wonder, long term, what the effects are, and neither one of us are psychiatrists or doctors or anything like that. But what are the long-term effects of just creativity? I mean, you look at these companies like NVIDIA, or you know people who created Amazon and you know, going back to you know Thomas Edison, whoever they had a lot of time to, there wasn't as many distractions, so you had more time to think things up, invent things. And nowadays we're there's so many people, such a large segment of the population, just distracted and by everything all the time. That is, creativity being zapped by productivity and productivity enhancements.

Speaker 2: 15:39

I guess we'll find out, I guess there's a show out there called Futurama, which is by the same maker of the Simpsons. They have an episode where you know, they, they, they tell you the dangers of human dating robots and why those are dangerous and how it was actually actually the the impending doom of the entire human civilization was them just getting too deep into the robot technology. So it's a funny episode, if you ever have a chance to see it, you're asking me to distract myself.

Speaker 1: 16:08

Yeah.

Speaker 2: 16:11

Well, it's like the kid you know is a teenager and he bought the you know it looked like Marilyn Monroe and it was called the Monroe Bot, you know, and he didn't want to go out and get a job and earn money to go take Susie down the street on a date. You know he's like I'd rather stay here and hang out with my robot.

Speaker 2: 16:33

And he never does anything with his life because he's just he's so distracted with it. So I think those are like cautionary tales of you know how technology can be a detriment, and so I think you know, just just balancing it, I think, is always a good idea, and with AI specifically, I'm excited for it. I'm also there's a side to it that I'm a little bit nervous of, and so I think, with any new technology, there's always the propensity for it to be a really good thing, or not a good thing. The internet is a good example, yeah.

Speaker 1: 17:01

Internet as well. Nuclear energy nuclear power, I mean, can be a great thing, can also be a bomb, you know. I mean it just depends how it's used. What is the state of the economy? I mean, as it looks more and more likely that it's Biden versus Trump rematch, which we predicted and you made a lot of predictions earlier this year and late last year, that seems like holding pretty steady so far as we're you know where we January, february, march, three, three months about into the year election. You, you have talked a lot in the past about election year economics. I guess how the incumbency and they juice this stuff and they keep things going pretty good, does it seem like we're kind of on that path still, that they're doing anything they can to make sure it all keeps rolling.

Speaker 2: 17:48

Yeah, so back in September of last year I was forecasting that we would end the year strong in the market just because the Federal Reserve was pretty much going to be done raising rates, and normally when they finally come out and say, hey, we're not raising interest rates anymore, the markets usually do quite well over the next 12 to 24 months.

Speaker 2: 18:11

And then I actually thought that not only are they going to not raise rates, but sometime in 2024, actually look at cutting rates. Now they just had a meeting today with the Federal Reserve and they said we're not going to cut rates anytime soon. But I don't know if I buy that 100%. I mean that could change very quickly and so next month they could say oh yeah, we need to cut rates. You know, just for whatever reason.

Speaker 2: 18:35

But you do answer good points of whenever there's a presidential race, what do the markets do? And actually it's interesting that we had looked at some stats and I think it was like 85% of the time during that fourth year when there was a presidential election year, 85% of the time the markets ended the year positive, regardless of who got elected, and so we got that favor in our favor. We've got interest rates. We also have really strong employment numbers still that are being cranked out at people. You know, if you want to work, there's plenty of opportunities. In fact, there's a lot of jobs that are going unfilled. I think it's like nine and a half million. So you know, when people are working, they're out earning money. People are earning money, they're out spending it. You know, which is the majority of what makes our economy go around. I think it's like 70% consumer spending. So kind of tracking those two numbers are really important. It kind of tells you a picture.

Speaker 2: 19:29

And actually I'd heard this said one time and it really made me think about the markets and the economy. And it said you know, it's almost near impossible to have a recession and have really low unemployment at the same time. Those two just don't mix. Usually when you have a recession, you have high unemployment, meaning people aren't able to find work, they lose their jobs, and that's kind of part of the issue. But when people aren't working and still earning money, even if they're in debt a lot, or maybe they're not making enough to really keep up a good quality of life or what they're used to, they're still working.

Speaker 2: 20:04

So yeah, so right now I mean unemployment's low. It's like 3.7-ish in that range and normally it's in the high five on average. So those are all the good reasons for why I think this year will continue to be strong. And then that presidential race is a whole other can of worms, I think, as you get further down the year and we actually know who the RNC candidate is going to be and the DNC candidate is going to be and they actually finalize those. I think the market will have a lot better of a forecast of how the results are going to be, but right now it's still kind of like you're saying. It looks like it's going to be trump versus biden, but we don't know for sure. Yeah, I guess anything's possible.

Speaker 1: 20:48

Yeah, I would bet money on it, but then again, maybe biden isn't the nominee. Um, I I would. I would, if I was betting, bet almost 100 trump will make it will be, then they're both going to be the nominee. But does one get pushed out or drop out, and that that would be Biden over anybody else, over Trump. But if I had to bet right now, I'd say Biden versus Trump, version 2.0 here, to stick with our high-tech terminology, glenn, we'll see, though.

Speaker 2: 21:18

Yeah, actually I was listening to a podcast the other night talking about I think the both parties can choose to elect and put whoever they want as the nominee, no matter how popular they become, and so I think they always reserve that right to do that. Yeah, but in practicality.

Speaker 2: 21:39

In practicality that would be like Trump winning. You know all the states to the you know preliminary. Get on the ballot to be the nominee and then the RNC say no, we all the states to the you know preliminary. Get on the ballot to be the nominee and then the RNC say no, we're not going to pick another person.

Speaker 1: 21:52

I don't see that happening.

Speaker 2: 21:54

I don't see them doing that, but Nikki Haley's still in the race.

Speaker 1: 21:58

No, she's gone. Well, she suspended, it was earlier today. She suspended her candidacy after yesterday's Super Tuesday. I think she won what Vermont? Yeah, yeah, uh, it was earlier today. She suspended her candidacy after yesterday's super tuesday. Um, basically, I think she won what vermont, or something like that, which is pretty left-leaning. Those are, like mitt romney republicans, except for eight of them yeah, you know no, but she yeah, wow, things happen quick.

Speaker 1: 22:19

Yeah, yeah, it's, it's which it kind of thought would happen. Money's probably drying up at this point. Trump's 900 delegates and he needs like 1100 or something. So yeah, I would. I bet real money that I'm even less likely thinking that it's going to be Biden, you know, bowing out. I mean Michelle Obama says, oh, I don't want it, I don't want it, I'm not going to do it. That would probably be for them. We'll see what happens. It all has implications on the economy and on planning and all that. But we don't have a crystal ball. But it's going to be interesting to watch.

Speaker 1: 22:52

All right, glenn. Hey, I appreciate the update. When I get back from my trip we'll get you back here in studio and see if the predictions are still holding. We'll see how all that goes. And you guys can email Glenn if you've got any questions for him. G least G L E E S T. G least at WT wealth managementcom. Uh, glenn's number as well. Here it is 9, 2, 8, 2, 2, 5, 24, 74. Glenn, good talking with you. I'll talk with you again soon.

Speaker 2: 23:19

All right, sounds good. Thanks, jeff.

Speaker 1: 23:35

All right. Thanks for listening to this market update brought to you exclusively by Glenn Least of WT Wealth Management. Remember, the information provided here does not constitute legal, medical, financial or tax advice. All information is the opinions of the host and of my guests. You should always seek the advice of a professional regarding any of these complex issues to make sure all circumstances of your situation are properly considered. Remember, you can call Glenn Least, get a one-on-one consultation, talk with him at 928-225-2474. That's 928-225-2474. Or email G-Least, g-l-e-e-s-t, g-least at WTWealthManagementcom. We'll see you soon. You.