☕ What’s next and the one question you must ask yourself immediately

Howdy! 👋 

I don’t know about you, but I’m loving all the craziness. 

At least from an investing perspective anyway.  

Let me explain. 

I’ve been actively involved in global markets for 45 years and if there’s one thing I’ve learned about rocky, choppy, scare the bejesus outta ya’ conditions, it’s this. 

The 5 most dangerous words for investors are… “it’ll be different this time.” 

No. 

Odds are, no… it won’t. 

Innovation will continue to power profits and print an entirely new generation of millionaires as it does. 

Skepticism about change runs deep and is plenty scary. 

I get it. 

What I want YOU to understand above all else is that it’s also entirely normal. 

In 1903, the president of Michigan Savings Bank advised Horace Rackham (Henry Ford’s lawyer) not to invest in Ford Motor Company, saying: “The horse is here to stay, but the automobile is only a novelty – a fad.” Rackham ignored him, put in $5,000, and cashed out 12 years later for $12.5 million… roughly $225 million today. 

In the 1920s–1930s, the smartest money on earth was still pouring into railroads while scoffing at commercial aviation. One famous line from a Harvard economist in 1937: “There is no conceivable reason why any sane person would want to fly when they can take the train.” A single $10,000 investment in Boeing in 1945 (right after the skeptics said “aviation is dead now that the war is over”) would be worth something on the order of $50 million today including splits, dividends and reinvestment. 

Darryl Zanuck, co-founder of 20th Century Fox, declared in 1946: “Television won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” Ten years later TV ad revenue blew past Hollywood box office and has never looked back. 

The fact that people are skeptical about AI today is par for the course. 

And an opportunity. 

Skepticism always works that way. 

There’s usually a big, loud and increasingly obnoxious group of people who get stuck in the mud, long for the past, confused with their own legend… whatever boat they float to feel good about themselves. 

Then there’s another group that embraces change because they recognize the opportunity it inherently represents and the profit potential associated with it. 

I’ve seen plenty of big examples during the course of my own career starting in the early 1980s. 

Chances are that you have, too. 

The decision always boils down to the rawest essentials. 

MyPOV is simple. 

Take the risk or lose the chance (to make money). 

Will you screw up? 

Sure. 

Will there be losses along the way? 

Absolutely. 

But here’s the thing to think about. 

You miss 100% of the swings you never take. 

If you’re cool with that, good for you. 

I’m not. 

Here’s a few of my personal faves drawn from my own experience over the past 45+ years to really drive the point home. 

1980s – Personal computers 

People were adamant that personal computers were a fad.  

IBM’s own chairman famously said in 1981 there might be a world market for “maybe five computers.” Executives swore up, down and sideways that “no one needs a computer at home,” and many on Wall Street believed the entire PC market would top out at hobbyists and scientists.  

Meanwhile, a little tiny fruity computer company called Apple was trading at a split-adjusted $0.09 and Microsoft went public in ’86 at $21.  

The folks who laughed all the way to the bank weren’t the skeptics. 

In fact, they’re still laughing today. 

Many are still buying shares, too. 

Let that sink in. 

1990s – The internet 

Early internet companies were openly mocked.  

Scorned, actually. 

I can recall more than a few serious investors who called it a toy, a novelty, or “electronic brochure ware” with such disdain that it defied the imagination. 

Newsweek even ran a cover story by astronomer Clifford Stoll published in the February 27, 1995 issue declaring the internet would never support commerce.  

Stoll, who had previously gained fame for tracking down hackers in his 1989 book The Cuckoo's Egg, argued that the internet would never replace real-world interactions, education, news, or—crucially—commerce. He mocked the idea of online shopping as "baloney.” 🤦‍ 

Even after Netscape went public and shot to the moon, the prevailing view was that the internet would never amount to more than a niche communications tool.  

Amazon was a punchline selling books out of a garage at $2 a share (split-adjusted). Cisco was dismissed as overpriced plumbing.  

Funny how that turned out. 

2000s – Smartphones 

When the first smartphones arrived, sceptics insisted nobody would want a computer in their pocket. Former Microsoft CEO Steve Ballmer famously laughed at the iPhone on CNBC, saying “$500 fully subsidized with a plan? That is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard.”  

Even after the iPhone launched, the “serious” consensus was that BlackBerry would crush it because “real businesspeople need keyboards.”  

Apple went from $6 to $90 (pre-splits) while RIM (BlackBerry) went from $230 to pennies.  

Steve and I both had a good laugh about that years later in the “green” room between TV appearances. He’s a humble, super smart guy. 

2010s – Cloud computing 

I vividly recall sitting in scores of presentations listening to analysts insisting that no enterprise would ever trust the cloud with sensitive data—too insecure, too unreliable, too crazy.  

The “Street” largely dismissed Amazon Web Services as a low-margin sideshow to Bezos’s bookstore and Microsoft Azure as a me-too experiment that would never catch up.  

Oracle’s Larry Ellison called the whole thing “complete gibberish” and you know where he stands today because we’ve talked about it many times. 100% on board! 

Fast-forward: AWS alone is a $100 billion run-rate business, and Microsoft’s cloud segment is bigger than the entire company was in 2009. Oracle is getting nearly half of its total revenue from its cloud business. 

Bluntly, the naysayers – and there were plenty of ‘em – missed the biggest infrastructure shift since electricity. 

2020s – AI revolution 

Now, we’re living through it again.  

The loudest voices insist AI is overhyped, dangerous, or still years away from real utility. Most of ‘em are highly experienced experts… for at least the last 2,000 tweets and 4 years but I digress. 

Others are old-school value managers who are so stuck in their ways that they can’t understand the world we’re headed into. Sadly, many of their clients are paying a terrible price as they’re increasingly being left behind. 

My grandmother Mimi – a very successful global investor in her own right – would have had a field day noting that “the smallest minds almost always have the biggest mouths.” 

Many of ‘em argue that AI won’t scale, won’t be profitable, and won’t meaningfully change how businesses operate. Hyperscaler debt, as I noted yesterday, is just the latest windmill many are tilting at. (See #3) 

Others insist that NVIDIA’s a “pick-and-shovel” bubble, OpenAI will never make money, and the whole thing is just fancy autocomplete.  

I’ll take that bet. 

There’s a new breakthrough every day… another Fortune 500 company reorganizing around AI… another industry waking up to the fact that it either adapts or gets left behind. AI is creating industries we don’t even yet recognize or have names for. 

I’ve heard this song for five decades in a row—and the people who bet against the new thing always inevitably end up humming it in the cheap seats. 

Innovation powers revenue and revenue powers profits. Stock prices key off both over time even if they disconnect at moments in time. 

The most expensive mistake you could make is to lose sight of the big picture. 

Frankly, I’d hate to see that happen. 

An entirely new generation of millionaires is being printed right now. 

The question you need to ask yourself is do you intend to be one of ‘em or will you be content to look back years from now knowing “you coulda” been one if only you’d stayed the course or – dare I say it – shoulda bought more shares while most ran for the hills? 

To be clear, it won’t be a straight line higher. 

Volatility will be our travelling companion which means that you need to incorporate that into your investment strategy along with proven tactics and choices that help you play offense even when you’re thinking defensively. 

I’ll be here if you need me. 

And so, btw, will the entire One Bar Ahead® Family, many of whom tell me that what they’ve learned has changed their lives, instilled a new sense of confidence and – yep – unprecedented calm in the face of markets that are tripping many up at the moment. 

Bottom Line   

I will make no bones about it. 

If you wanna run with the big dogs – meaning build real, sustainable wealth and keep it - you need to get off the porch. 

1) Make peace with Wall Street even if you’re not on Wall Street   

2) Buy the world’s best companies because anything else is a risk you don’t want   

3) Use proven, effective tactics to control risk and maximize profit potential at all times 

As always, let’s MAKE it a great day and finish the week strong. 

You got this – I promise! 

Keith 😀