Betting Against Technology

in LeoFinance4 months ago

It seems many people are intent on betting against technology. What is the reason for this? Is it because they want to lose their money (or at least get returns that underperform) or is it something else?

I guess we will have to leave it to them to answer why this is the case. The only thing we can do it to look at technology and truly understand its impact.

If we do this, then we can make smarter decisions and we will not get caught off guard.


Technology Is Deflationary

This is a concept that much of the world, especially those involved in cryptocurrency seem to forget.

Technology is deflationary.

Read that again. Technology is deflationary. This is perhaps the single greatest concept that people need to understand. To argue (and worse invest) against it is pretty foolhardy.

Therefore, a logical conclusion is that the more technology we have, the more deflation that is present.

How many people do you see discussing this point?

Even people like Raoul Pal mention the exponential technological age that we are in. He is absolutely correct about that. If you do not believe it, check out the CAGR rate of Robotic Process Automation, AI, and an assortment of other automation software that is being implemented.

The challenge for someone like Pal is that he also mentions the debasement of currency. If he believes in exponential technological progress, he much, by definition, understand that exponential deflation is coming. The two cannot be separated.

Have you ever seen a technology disrupt an entire industry whereby wages went up and prices increased to cover them?

Did anyone notice that online shopping, overall, tends to be less expensive than heading out to the store? Is it any wonder that online shopping is eating up a great deal of retail?

Digitization Changes Everything

Here we have another concept that most fail to grasp.

Do you think you understand what is going on in a particular field? If that area experienced digitization, there is a good chance you do not. Once something enters this realm, the future gets very fuzzy. Things accelerate at a rapid pace and industries are radically altered in under a decade. Sometimes this means the major players go out of business. Other times it is a complete transformation of how that sector operates.

Compare how much of life is today compared to the 1980s. Take a look at how much different things are as opposed to what took place then. Focus upon entertainment, business, and recreation.

With digitization, the law of atoms is eliminated. What is applicable in the physical world is no longer valid. The digital realm operates upon its own set of laws. It also creates different results.

Here are two things we know about the digitization process:

  • It obliterates whatever industry it enters
  • Abundance is created

This applies to every area but the best example is photography. We once lived in a time where people bought cameras, film, and paid for developments. Then digitization happened. Suddenly the cost of cameras dropped like a rock and film went away. Of course, that was short lived because the process kept going with the introduction of the smart phone. Suddenly, many did not need to buy a separate camera since once came standard on the phone.

What really pushed this to the next level was the fact that the capabilities got to the point where the pictures were sufficient for 99% of the cases. Best of all they were free. That is why we now take 3 trillion pictures a year. The abundance of digitization is easy to see.

Now, we see this come to the financial sector and money. History tells us what is going to happen. The banks are using the same playbook as the record companies a couple decades ago when Napster started to cut into their business. The challenge is that stopping Napster did not stop the file sharing of music. Much in the same way, stopping Ripple is not going to be anything more than a hiccup for what is taking place with cryptocurrency.

Winner Take Most

The best way to describe this is by looking at the automobile industry. It is a prime example of how the old thinking is a bet against technology.

Tesla is going to be the major winner there. This is something that many dispute but that is because they do not understand the title of this section. In the world of technology, there are not a lot of winners. Instead, most of the market share is gobbled up by one or, perhaps, two entities.

Look at online advertising. This is something that was available to all. How many companies dominate it? Two: Facebook and Google. Who controls search? Mobile phone operating systems? PC operating systems? Cloud? Video? Audio?

Notice the trend.

Yet people do not equate this to the automobile sector. It is true that it is a traditional business yet electric cars are not. Claiming that because companies could build ICE vehicles that suddenly that can switch to EVs is a massive presumption, one that is being proven wrong.

Remember, in technology, the winner takes most. Musk has claimed that his goal is to sell 20 million cars a year by 2030. He is known for being off his forecasts. However, technology is on his side. General Motors stated their goal is to get to 1 million EVs sold in a year by 2026. That is a big difference. They are going to try to match Tesla, except 5 year later.

Nokia was buried by Apple because they realized they missed the smartphone craze by a couple years. By then, it was too late.

In a world of autonomous vehicles that can be hailed using an application on a phone, how many companies do you think will be operating in that environment? Does anyone see Ford, GM, Toyota, and Honda being major players in that arena? If they are going to be, wouldn't it be prudent to get started?

Technology is often a winner take most field. If this plays out in the automotive world, by the mid 2030s, Tesla might be producing 40% of all the cars in the world. They also might be consuming the most autonomous miles and by a wide margin.

This is what I mean by betting against technology. There was a time, from a stock perspective, where Nokia made sense over Apple, Sears over Amazon, and Blockbuster over Netflix. Yet in the end, how did it turn out. The ones that had the advanced technology won out and by a wide margin.

We see this trend all over the place. Too many people, unfortunately, are still stuck in the old mindset. Missing what is happening with technology is going to cost a lot of people money.

It is best to try to avoid this pitfall.

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Yea I would not bet against technology with how fast things are developing. I doubt we would of imagined smart phones 20 years ago that can do so many things we relied on the computer for.

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More impressive than imagining the smart phone was the rapid adoption of it. From nothing to 70% penetration in under 8 years in the US.

That is one of the fastest adoption rates of technology ever.

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It is a silly position to bet against tech it has been shooting forward and advancing at an exponential rate. Even crypto if you look how far it has come is a relatively short period of time with not much money to commence its launch only seeing real financial investment from private citizens in the initial run to now ballooning out to $US1.9 Trillion.

Those numbers aren't shy of continuing to surge forward.

But, the old never likes change.

Yeah I think about how much money is going to be saved simply by eliminating a lot of gatekeepers. Consider how much more efficient a system we will have without the typical custodians in the middle of everything.

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Lol, I think when they bet against technology they are taking Warren Buffets statement ( be fearful when everyone is greedy and be greedy when everyone is fearful) the wrong way.

Well in fairness, Buffett isnt a big tech guy. He only bought into Apple after it started to resemble a large cap.

That is okay, he is not of the tech era. However, those under 60, we do not have that luxury.

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I used different tools to find best Investment so yeah I do take help of technology cause it makes my work easier

Bang, I did it again... I just rehived your post!
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I agree with everything up until the part about making alot of money. I think what technology is doing is making most goods and tech and tools cheaper and cheaper. So i think tech is slowly surely going to move us away from the get rich on wallstreet big capitalist mindset of the 20th century.

I think we're going to move more into an overall economic prosperity system that is affordable for all because everything will be so cheap. So when most things are readily available and affordable. what happens? money matters less. This movement in consciousness driven on by technology is really where we headed.

It's similar to being once depended on human slave labor. Then everyone now has a roomba or a robotic vaccuum cleaner and you no longer need the slave to sweep the floor. It's just not important everyone can afford a roomba.

What saddens me is not just that they can't see that technology wins out. They can't see that technology can set us free. The only thing most here can aspire to is making more money and miss out on this revolution of freedom. It really speaks to the surface level of thinking it's almost animalistic what we do. I consider it backwards, barbaric and without civilization.

It is a missed opportunity and it's not what the 21st century will be about. I don't think people quite get it. This century of technology is the last century of human creation. it really is to ignore that is not only futile but you really gotta be a person of low intellect not to see it. That's not an insult that's probably just a fact to these people. Now the experts say universal basic income has to play into this. How could it not? It's all still going to shape up into some form of it. It's like playing a chess game and you know how the chess game ends but everyone just still going through the motion playing the chess game. I know this i was taught by the state champion of Virginia to play chess. So i know the thought process of futility. I know when i see it and when people do it.

I know when the guy is wiling to dump toxic waste in his backyard and his children's playground in the name of capitalism to save himself $10k in dumping cost. I know that backwards type thinking and its as prevalent here as out there. However crypto has an edge. It has at its wings the dawn of the new world that will inspire the big changes. Like " Andrew Yang" said ubi through the blockchain is the way forward". You see UBI is more than a bandage idea it's a cultural and psychological change in perfecting mankind people don't fully get it yet but they will in the 21st century and the backwards people will have no choice but to come along. It's just inevitable you don't have to look far to grasp it or understand it. Technology and all of these things are interwoven together you can't have one without the other.

So no people it won't be make alot of .. make alot of money .. make alot more money than my neighbors in teh future. No no no.. everything will be so cheap.. 3d printers people at home printing everything they need. robots driverless autonomous solar powereds satellite controlled whatever. This is the beginning of the end of any capitalistic 20th century thinking. It's dying and has been for a long long time. No level of greed or false sense or ideas of freedom can stop it or change it. The spaceship has left the station.

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Not even going back to the 1980's as just in the last 2 years supply chains are using platforms. If you have no clue you cannot supply and need to get up to speed very quickly. In my old business where I worked I knew everything and now couldn't do that much to be honest. Things have really changed and it is down to companies adopting technology to help their businesses.

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