The Ripple Effect Economy

If you are generally interested in business or an investor, what I want you to start thinking about is the ripple effect economy, not the essential boom or where the rock hits the lake so to speak, but it's the companies where that boom is affecting. Hey everyone, this is Anthony Ernesto and this is my burn in the box drop for this week. This is outside of hr, outside of AI. I am talking about just generally the economy and I'm just a student of business. I love looking at companies. It's something that I've always been interested in. I got onto the HR side to affect companies through people, through human capital. But generally I've always been interested in businesses, just how they run, small businesses, large businesses, whatever. What I often find is when you see a boom, let's call it AI, whether it's Microsoft open, all these sort of things that are happening. What I also love seeing the metaphor here is when you throw a rock into or a pebble into a pond, that big first drop is pretty huge and then it ripple effects. And that's where I always look at what are the tangential industries where that boom, that center boom is coming from that's being impacted or potentially impacted. Because typically by the time you see the boom come, it's overvalued or it's too late for you to invest. But it's a side industry histories from that ripple effect that I think are most interesting. And so I'm watching this particularly in AI and I saw the opportunity where it's like, hey, these AI large language models have to run on really sophisticated chipsets. And it looks like Nvidia. Not that I predicted that by any means, but I saw the ripple effect of these things and that's what I usually try to do. I try to look at what are the industries and we've seen this in history. Whether it was the automotive industry. You saw Detroit, the entire town of Detroit and its subsequent areas all were feeding off of the automobile explosion. And in fact you saw the impact of when some of those companies went bankrupt. It is a both boom and a bust type of scenario. But you see Nvidia is a great example of a company that's not in the AI business that pivoted their gaming chip for AI. And now by the way, as of yesterday, the third most valuable company in the world, they surpassed Amazon and Google and now sit next to Apple and Microsoft. Just amazing. Sort of again, Nvidia, is it too late? Who knows. And it will probably correct itself. But I see especially the AI boom. You look at cloud services Obviously, that's a big area of opportunity. We saw cloud computing costs go up since 2019, the absolute drive for semiconductors. You see Nvidia and where they are today. And then I think there's an opportunity here. And I haven't heard much about it, but even though these large language models run on very sophisticated computing power, I wonder if you can start creating these language models more efficiently so they can run more locally on less powered chips or less powered computers. And so I wonder if there's an opportunity and if you hearken back to Hyde Piper Silicon Valley HBO show, it was the compression rate that finally got them to be successful. So I'm wondering if there's an opportunity here for a company and there's probably a bunch of companies that are looking at how do we compress the large language model so they can run on less efficient. Now I can see that as a boom economy. But looking at these opportunities, it's all in history. Radio and television and all the subsequent industries that that helped to grow. Semiconductor industry, we're starting to see a lot of that come back. The government just put in a grant, I think it was 1.2 billion to bring some manufact back to the United States. You know, I'm a student of Peter Zion and his demographics and the collapse of China and all that sort of stuff. So you can definitely start seeing that global companies are starting to move away from those different regions that have those potential demographic challenges. Hydrogen cars again. A friend of mine is looking at a hydrogen car manufacturer to invest in. I was like, well, who's. How do you get the hydrogen to the car? It's not, it's an infrastructure. You think of Tesla now making available their entire electric grid for all electric cars. These are amazing like Tesla's. And maybe that, that's commoditized at some point in the future, but you can almost see that becoming like a ws like that is they built these charging stations, this infrastructure just for Tesla, but now other cars are going to be able to use it. So as we look into the future, what I want folks to start thinking about and where I see the opportunity, whether you're an investor or just a student of business or you're interested in a sector or getting in a sector, is what are the peripheral industries that stand to gain from these different booms, especially the AI boom. When you think of like tourism and hospitality, whether it's construction, historically, the automobile industry. Look at not only where the boom is happening, but start looking at the ripple effect industries and see if there's an opportunity to invest, an opportunity to join some of those companies, because I think they're going to be really, really interesting. And look at those secondary and tertiary sectors for investment and opportunity. That's my quick drop for this week. We'll see you next time.