How to Unf*ck Your Future: Stop Making Predictions

Your feed's probably full of people telling you how to un fuck your future, how AI is going to replace you, and how your only hope of survival hinges on this shrinking wealth window inspiring you to act now or be broke forever. Now, you might have seen this guy on Diary of a CEO. In case you haven't, he goes by the name of Raoul Pal. He's a former Goldman trader, independent macro analyst and someone I know very well. He owns a platform called Real Vision. I actually used to work with him for that company. Here I'm presenting one of the shows and that, believe it or not, is my name alongside legendary author Michael Lewis and also Morgan Housel, whose book is the one that I have sat next to me. Now, to be crystal clear, this isn't a criticism of Raoul or my former employer, but it doesn't mean that I necessarily agree with everything that he says, in the same way as most people won't agree with what I say. Let me roll a clip from a recent video just to explain what I'm talking about.

One of the most foundational things possible is this idea around the economic singularity and the fact that you basically have five years to unfuck your future. You see, the world is going to change so dramatically by 2030 that we don't have much time to generate as much wealth as possible before we don't know what jobs are, how economies work and all of this stuff.

Now, I mentioned Morgan Housel earlier as one of the guys that I appeared alongside long before I knew who he was. This book contrasts everything that the likes of Raoul and co are talking about. Whilst technologies change, human nature doesn't. Our biases, our decision making flaws, and ultimately our need for narratives, stories, which is the most dangerous thing in my experience, is the same as ever. So as investors we should be aware of this. And there's an analogy in this book, in the opening chapter that Housel uses and it talks about a big investor being in the car with Warren Buffett Back in 2009, the depths of the financial crisis. And he turns to Warren and says, things are so bad out there, I don't think we're ever going to recover from this. And Warren Buffett replies to him and he says, do you know, do you know what the most popular Candy Bar in 1952 was? And of course the answer, he doesn't know the answer is Snickers. He comes back almost rhetorically saying, and do you know what the most popular candy bar is today? Snickers. It's the same answer. Boring businesses often make great investments. That's a quote from another legendary investor, this time Peter Lynch. The Rather than attempting to find outliers by predicting the future, we should instead look to back who's already won the race. Dominant firms that have durable margins, pricing power, a competitive advantage that ultimately aren't going anywhere. Same as ever. And one example of that is a company that's actually in the pest control business. Will there still be cockroaches 50 years from now? Yes, they will. It's going to be the same as ever. It's not AI, it's pest control. Now there's a bunch of other factors which make me really like this company. Like sticky recurring contracts which mean that even during recessions, the firm's customers are still locked into these longer term contracts. The company is Rollins. Here is the quality profile from my model which shows what a phenomenal footprint this company has. But that leads me on to the next thing that actually governs markets. Charlie Munger, Sir Buffett's investing partner sidekick who recently passed away, I think he was 99. He says that it's in fact envy that drives us. And he relates this to living standards over the decades and how I think it was the 50s or 60s still seen the rose tinted spectacles as being this golden era. On an average salary you could have, you could, you could afford a home, you could have the latest car and then like an older model second car, the 2.3 kids or whatever it is, be married and all the rest just on an average salary. Despite the fact that households are three times better off in real terms, so adjusted for inflation than they were back in the 50s, we're no happier. If anything, we're more dissatisfied, we're less happy when we're constantly looking outwards. Comparison is the thief of all joy. We're ultimately never satisfied when we look outwards. And it's in fact envy rather than greed that drives us. So here's how I form my investing around this. Certain behavioral patterns will be the same as ever. Meta is one example. So this is taken from my AI model I've built using GPT, which is part of my program. If you want to check that out, there's a link in the description. Won't turn this into a sales pitch. Beyond that. And what it shows is the footprint of Meta. According to the seven factors that I look for when analyzing companies, that's delivered a proven edge over the years for me personally versus the S&P 500. The bigger the footprint, the bigger the profile, the better. So you can See here that Meta is vastly superior to the average company in the S&P 500 that you otherwise get exposure to with an S&P 500 tracker. Meta is a dominant company. Now, if we extend on this concept of envy, we take it a step further. We can think of luxury brands, companies like Hermes or Ferrari, one of which I own and the other one I don't. Let's begin with Ferrari. Highly profitable, super high growth, durability, reinvestment and so on. It's all there. You do pay a premium in terms of the valuation, as you do for most exceptional companies. What an incredible profile Ferrari has. Now at the moment, all of the luxury sector, particularly for leather goods handbags on it's going through a bit of a slowdown, mainly due to a drop off in Chinese demand. But same as ever, AI isn't going to replace how Hermes bags are hand built and the clientele is are still going to be envious little fuckers, little fuckers with lots of money who are going to want to buy the Birkin bag still because it's a status symbol. So I think that's a fine example of something that taps into both envy and also this timelessness. Whilst everybody seems to be talking still about crypto and chasing the future, there look at companies like Visa and MasterCard. Within payments, they are integrated within the entire banking network, they have dominance there. They're basically the same firm. So you can see the footprint, you can see the margins are incredible. That's the clearest indicator of market dominance and pricing power. As a result of this network effect, they're not going anywhere. And all the while people are otherwise trying to predict the future and ultimately being emotionally driven by Cope, by fomo, getting caught up in narratives, herding into incrementally riskier positions and overlooking what's staring you right in the face. Same as ever. So that's not to say that I'm some fuddy duddy who only invests in boring old companies. I'm a big investor in AI, but it's more the shovels and picks approach than it is piling into Nvidia. It's looking at the value chain, so in other words, suppliers to those companies. So there's one company in particular that I own and I'm not going to reveal the name, but if you want to find out what it is, click the link and send me the message. Top stocks. And I'll provide my watch list of some of the leading names in each of these seven factors that we look for, of which this company is one of them. So this company makes the software that companies including Nvidia rely on to design and go on to produce semiconductor chips. And there's no doubt that that industry is going to thrive. But it's about not being hyperbolic in your view, and remaining rational and logical with an objective, data driven process that, ironically, I've automated with AI. This book has actually been really refreshing. In a world of hyperbole and noise. Be Warren Buffett, be Charlie Munger. The future is the same as ever. If you enjoyed this video, then check out this one next, which I think you're also going to love. And if you don't, I'll give you a full refund.