Looking Back And Looking Forward

And that’s why you play the game.

Just as I put the finishing touches on this week’s newsletter, Tulane beat the vaunted USC football program by 1 point with 9 seconds left in the Cotton Bowl, in a dramatic come-from-behind victory.

Tulane won 2 games last year, and they were largely written off. The last time they played in a major bowl game dates back to the Great Depression.

Pain point, isn’t it?

But just like Tulane, I think we’re positioned for an incredible comeback.

If you have anything invested in the markets, 2022 has been a very rough year.

Captain Obvious to the rescue here, friends.

Back in 2022, there were very few places to hide. Even bonds, a traditional safe-haven asset class, have been crushed.

To put this year into context, it is important for us to see how unusual it’s been. If we look at the annual returns of both 20-year Treasury bonds and the S&P 500 going back to 1961, Treasury bonds have never fallen more than stocks since.

Except for 2022.

Through October, the S&P 500 was down about 24.5%, and the 20-year Treasuries were down more than 30%. Crazy. It’s the first time we’ve seen these dynamics in the last six decades. It’s also the first year that we’ve seen Treasuries AND the S&P 500 decline by more than 20%.

We can almost entirely blame this on the irresponsible actions of the government: Locking down citizens, printing trillions of dollars, handing out boatloads of free money restricted supply, artificially increased demand, and setting the inflation-rocket off to a record 40-year high.

To fix the problem, what did the government do? It raised interest rates more aggressively than at any other time in our history. This was after saying multiple times that inflation was “transitory.”

If you read the mainstream media headlines, the future looks rather dire. But remember, the media sells negativity. Like it or not, humans are simply more drawn to negative news than positive.

Inflation, the Fed, Ukraine, the Trump investigation, stock crashes, potential recession, Iran, US-China tensions…

I mean gosh, if you digest the news daily, I’m not sure how you can really be positive after being inundated with that level of negativity.

But there still is so much to be optimistic about:

Driverless cars, artificial intelligence, mapping the human genome, decentralized finance, and nuclear fusion are just some of the breakthroughs that we’ll see play a larger role in 2023.

Let’s take a look at some of the breakthroughs that will start to change our daily lives in major ways in the coming year.

Unlimited Clean Energy

Scientists have very recently made a major breakthrough in the field of nuclear fusion, which could provide an unlimited source of clean energy to power our world. This development has been hailed as one of the most significant scientific achievements in recent history and is sure to revolutionize how we produce and consume energy.

For my fellow science dimwits, nuclear processes are of two types: Fusion and Fission. In both, massive amounts of energy is generated and released. Nuclear fission is when one big atom breaks up into smaller fragments and releases so much energy that humans can create nuclear power plants from it.

On the other hand, nuclear fusion involves combining multiple small elements together to form a larger single atom. Fusion is what powers our Sun and enables life on our planet, the Earth. It’s considered much safer than traditional nuclear fission, because it does not produce dangerous radioactive waste materials that can remain hazardous for thousands of years.

Coming back to the recent breakthrough, humans are now closer than ever before to realizing a future where humanity enjoys access to abundant, clean energy without any environmental concerns.

This means a world where we don’t have to pay for energy at all. That’s good for the environment and your pocket. Of course, it’s years away from reality, but it’s only years away from reality.

Artificial Intelligence

The past 2 decades have been seeing an AI explosion in the world. So much so that just this past week, I started using AI to help me research and write.   Most of the previous paragraph on nuclear fusion was written by AI. Of course, you realize that the personalization throughout my writing is me, but for the parts where I need to research, it does it for me instantly and creates original content.

That means I’m more productive. What used to take me a full day to write now takes less than an hour, be it a blog or a podcast script. I can now crank at least 3x and possibly 5x as much in the same time. Embrace AI, you won’t regret it.

The growth of an economy hinges upon the productivity of the people.

And AI keeps getting smarter and more accurate. As the machine “learns” what you’re trying to do, as you continually adjust the inputs you give it, you’ll get even better and faster outputs.

I predict that before this decade is over, we'll see a significant increase in individual health, vitality, and immunity because we'll have AI looking after us for everything, from attention spans to pulse rates, from mood swings to food cravings.

Robots

In 2023, we’ll start to see more mass-produced robots - that will do things that you don’t want to.

This will take a few years to become mainstream, but there are robots already built that can sweep, pour a glass of wine, and help with menial tasks around your home. Imagine a time when your life is free from menial household tasks like laundry, cleaning, dishes, even mowing your lawn!

Women, you don't have to worry about your husbands leaving their wet towels on the bed.

Men, you don't have to bother your wife anymore about your lost gaming console.

And that magic genie who does both of yours laundry to make it magically reappear all cleaned and folded in your dresser? That will be a robot too.

Smart robots are also becoming more sophisticated and intelligent with each passing day. They can learn from their mistakes and be trained for new tasks.

With advances in artificial intelligence, robots may soon become just as capable as humans at completing complex jobs such as cooking or cleaning windows.

What happens when millions of people are now free of these tasks and can utilize that time to provide greater levels of goods and services?

It will unlock trillions of dollars of productivity.

Driverless Cars

Driverless technology has taken great strides in recent years, with a number of major breakthroughs taking place. There are plenty of cities that have driverless cars in operation, but yet, it’s not making headlines.

Autonomous vehicles are now being tested on public roads in many countries around the world, and researchers have also developed sophisticated algorithms to facilitate safe navigation for them through even the most complex urban environments.

In fact, now that you don’t have to drive anymore, imagine the time you unlock to focus on other more productive activities. If even 40% of the population saves a couple of hours a day, imagine the economic boost we’ll see!

When I drove to Cleveland last weekend for an all-guys sports weekend, my Tesla did most of the driving on the highway and I managed to write about twenty social media posts. Had I been given 100% time off from the road without worrying about the travel, then I’m sure I could have written 40!

The change is coming very soon. In fact, it’s already here, and mass adoption will begin soon.

Personalized Preventive Healthcare

The mapping of the human genome has come a long way in recent years. The cost of sequencing a person's entire genome has dropped from approximately $100 million in 2001, when it was first completed, to only around $1,000 today. And I’ve read that it will soon be down to $100.

Let that sink in. From $100 million down to $100 in a little over two decades.

Additionally, scientists are continuing to make breakthroughs on how best to interpret this data and use it for personalized medical treatments. The possibilities are endless and the potential benefits will revolutionize healthcare as we know it.

So what the heck does mapping the human genome mean to us?

By understanding how our genetic makeup can influence our overall health, doctors and scientists are now able to create targeted treatments that are tailored specifically to an individual's needs. This means more effective treatments with fewer side effects and better outcomes for patients.

Furthermore, the ability to map the human genome also allows us to identify potential risks or predispositions for certain diseases so we can take preventive measures before they manifest.

All in all, this new technology has revolutionized healthcare by giving us a way to truly personalize treatment plans and go to the root cause of many seemingly incurable diseases.

The New Money: Decentralized Finance

Decentralized finance (DeFi) is a new type of financial system that uses blockchain technology to facilitate the flow of money, assets, and other value between users.

Think of DeFi as a sector of the cryptocurrency market. Crypto and blockchain will have many different use cases, and DeFi is likely to be the largest. It’s been gaining traction in recent years due to its potential for providing more secure, efficient, and transparent financial services than traditional banking systems.

If what I’m about to explain doesn’t make much sense, think of it this way in simple terms: DeFi will allow you to cut out the middleman and conduct business directly with your peers through a system that guarantees trust.

The amount of value that will be unlocked for everyday consumers not having to rely on banks to take a cut of every transaction will be enormous; it will be about putting money back into the hands of consumers.

DeFi offers an array of benefits such as shorter transaction times, lower costs, greater transparency, and wider access to global markets. It also enables users to have complete control over their finances without relying on third-party intermediaries or centralized authorities. Users can make the most of DeFi from any location irrespective of economic background too. By leveraging smart contracts and decentralized applications (dApps), DeFi can provide users with the ability to create their own digital wallets and trade cryptocurrencies directly peer-to-peer.

DeFi has the power to change the world by making money accessible for everyone. And that will explode the worldwide economy.

What do all these breakthroughs mean to us?

We will become drastically more productive. We’ll have more time, more energy, better-personalized health, and more efficiency.

Now, these breakthroughs will not be mass-adopted this coming year. But the acceleration of adoption will take off.

And technology naturally combats inflation. Think of how much flat screen TV’s once costed. When they first came out, they were north of $10,000. Now, every C-class property I’ve owned has a flat screen.

These tech advances will cause prices to continually drop, giving us greater access. There’s a lot to look forward to, friends. Don’t let the media tell you otherwise.