Invest your own money, let compound effect be your leverage, and avoid debt like the plague.
- Manlobbi
Halls of Shrewd'm / US Policy
No. of Recommendations: 6
No. of Recommendations: 13
At the risk of confirming my stupidity, (as I know nothing about such matters) this is what I see as the problem with the current high valuations.
As we move from large language models (answering questions) to AI models with agency (doing things), we must surely run into a big problem. Angentic AI is already here and we are being to see how it is eliminating jobs in a major way. There is so much human inefficiency in the work place, it will incredibly easy to eliminate a large percentage of jobs.
If there are less people working, there will be less income taxes paid. Governments, who are already dealing with structural deficits (or not dealing with them!), must then provide yet more people with an income (universal income).
This means the small group of companies and individuals involved in AI make super profits. The concentration of wealth, which is already extreme, becomes more concentrated.
Then you have the problem of the AI making cars, phones etc. but AI can’t buy cars.
So you end up with governments taxing the AI companies very heavily to fund universal income. That causes their stock market valuations to fall. Which has a massive negative wealth effect. The decline in human consumption causes an economic decline as measured by GDP.
You then have a population with no purpose other than leisure activities. Are the robots going to keep them in line?
The only way the large tech companies can hold onto all of the profits, is if they can somehow control what the voters think and make them believe the status quo is good for them. Twitter/X, instagram, YouTube etc is solving that problem for big tech for now. But is that sustainable? Are humans really going to allow machines to take over our work and our democracy?
This takes no real account of how technology is influencing defence, policing, law and order, education, health, the environment, or democracy itself.
We don’t really know where it all lands but from the narrow lens of the market, it seems optimistic to project a winner takes all outcome for corporations continues forever. There must surely be major adjustment pains.
No. of Recommendations: 2
Buy what's going up, sell when it starts going down.
Then you don't need to agonize about the state of the world and try to predict the future.
Anyway, 90% of predictions for the future are and have always been "disaster, woe is us". People are attracted to disaster, which is why everybody slows down to rubberneck auto accidents.
There must surely be major adjustment pains.
Yup. And when that happens stocks will go down -- which is your signal to sell.
"Do I want to be right about the reason for the fall or do I want to have a plan in place?" -- BEN CARLSON, awealthofcommonsense
"You’re trading/investing to make money – not to feel good about yourself, or to feel “proud” that you were right." -- Brian Lund
No. of Recommendations: 13
My brother in law is a collector of Hershey memorabilia. In one black and white picture you can see two or three dozen ladies sitting at desks sorting some cocoa means or something. That process still happens today, but it’s automated, and a handful of workers handle more production than that entire room of hand sorters used to many decades ago.
Our Chairman has said similar things about the massive gains in productivity in the railroad industry. We don’t need nearly as many people working at the railroad to move more quantities of good than we moved in the past. This freed them to do other things when they were invented.
And similar stories are told of the advancement in farming production. All these changes and yet we seem to have the same working schedules we’ve always had. One reason is we have many industries we didn’t have when those jobs were lost.
I believe there come points when massive productivity gains are made where society gets to decide whether it encourages higher pay and leisure or new ways of working with the time that’s been freed by automation. It seems we’ve often chosen to find new ways of working, even to the point where we have a greater percentage of two income households than when many of the above changes in automation occurred.
So I think we’ll find a decision point again when/if AI starts affecting jobs. And if our society and government decides we need more money to replace money from jobs lost to AI and increases the money it gives for earned income or some such program, maybe families can mostly go back to a single income being enough and that’s great.
And if instead our society and government decides we need more jobs to replace ones lost to AI, maybe we get an increase in the quantity of people serving the elderly in healthcare, or providing childcare and household services for the ones with the the high paying jobs that remain. Maybe we add enough cooks to our local restaurants and entertainers to our local theme parks to match the quality you’d see from a trip to Disney. And that would all be just great too.
And maybe from a combination of both of the above societal and governmental actions some new thinkers come along and start entirely new industries.
I still think we have an uncomfortable level of froth in markets, but I don’t think we’re to the point where all society is doomed by this new method of or attempt at increasing productivity.
No. of Recommendations: 9
Interesting discussion.
Here in the UK we have millions of working age people on benefits and ever more young people signed off with mental health issues.
Meanwhile taxes on the productive are at the highest levels since WW2 and low skilled overseas workers are continually imported to fill the roles that those on welfare should be doing. Meanwhile national debt is increasing every nonth.
I think it's already here 👀
No. of Recommendations: 0
No. of Recommendations: 7
“Here in the UK we have millions of working age people on benefits…”
Google: Approximately 9.9 million working-age people in the UK were receiving some form of DWP benefits as of August 2025, representing roughly 22.8% of the working-age population.
Similar in the USA:
Google: Based on recent data, over one in four working-age adults (27%) in the U.S. participate in at least one social safety net program, according to ASPE data. While beneficiaries include seniors and children, tens of millions of working-age adults (18-64) receive benefits, with many working-age, able-bodied adults without dependents (ABAWDs) using Medicaid, and a significant portion utilizing SNAP.
Many of these people are the working poor. They are not moochers. They just can’t make enough to live without government assistance.
Mr Buffett wrote about how to help the working poor in one of the letters. Think it was an earned income tax credit. Anyone remember that?
No. of Recommendations: 2
I quite like Reform UKs idea to simplify the tax system and increase the tax free rate to £20k to encourage people back to work (even if part time)
No. of Recommendations: 2
I quite like Reform UKs idea to simplify the tax system and increase the tax free rate to £20k to encourage people back to work
Tax free rate? That's very meh compared to the USA where there is a huge swatch of NEGATIVE tax rates for a bunch of people. Yes, they receive income tax "refunds" that are more than the total income taxes they've paid!
Oh, and so far there is no evidence that it encourages such people to work.
No. of Recommendations: 33
Tax free rate? That's very meh compared to the USA where there is a huge swatch of NEGATIVE tax rates for a bunch of people. Yes, they receive income tax "refunds" that are more than the total income taxes they've paid! Oh, and so far there is no evidence that it encourages such people to work.All true!
Tesla reported zero federal income tax paid on almost $5.7 billion of U.S. income in 2025.
Southwest Airlines avoided all federal income tax on $561 million of income last year; its competitor United Airlines achieved the same zero-tax result on almost $4.3 billion of U.S. income.
Live Nation Entertainment paid zero federal income tax on $98 million of U.S. income.
Yum! Brands, paid no federal income tax on over $1 billion of U.S. pretax profits last year.
PayPal, Toast, and Block—collectively paid zero federal income tax on $3.2 billion of U.S. income.
And the list goes on...
Many Profitable Companies Paid $0 in Federal Income Tax in 2025 = Total National Debt: $39 Trillion and climbing, fast:
https://www.usdebtclock.orgThis is what a rigged system looks like.
https://itep.org/88-profitable-corporations-paid-z...
No. of Recommendations: 0
There is one difference. AI is coming for every job. The industrial revolution created new jobs.
No. of Recommendations: 2
”AI is coming for every job. The industrial revolution created new jobs.”
A lot depends on your time frame, how fast the change is coming, and whether you understand the change or are just reacting to it.
French historian Fernand Braudel identified three cycles of history. The shortest is the day-to-day flow of events; Braudel called them “fireflies” on the stage. Next up are paradigm shifts — like the end of the Cold War — that can play out over decades or longer. Finally, there’s the longue durée: the bedrock of climate and geography that shapes everything else and changes only over centuries or millennia. The Bronze Age Collapse is a good example.
AI - the latest phase of the Digital Revolution, is not merely a firefly, but it is itself probably only a paradigm shift. Like the personal computer. It ain’t going anywhere, but the winners and losers are not yet clear. And it’s probably only a phase: we don’t know what’s next, although quantum computing shows promise. The stakes are high.
People say WEB was a master capital allocator, which is true. But above all he was a master manager of risk. That’s why BRK is still my largest holding. Safety first, growth second. Onward!
abromber
