Latest Episode: Contrarian Insights | Stripping Down Market Trends and Predictions
In this episode of Barenaked Money, host Colin White of Verecan Capital Management is joined by Nathaniel E. Baker from the Contrarian Podcast. They delve into the philosophy behind contrarian investing, discussing the importance of challenging prevailing market sentiment. The conversation covers highlights and misfires in financial predictions, including the bullish stance on natural gas and the contentious views on Bitcoin. They explore the impact of policy and geopolitical uncertainties, the role of AI in different sectors, and even touch on cultural phenomena like Taylor Swift’s economic influence. The episode wraps up with a contemplation on the potential sources of market risk heading into 2025.
00:00 Introduction to Barenaked Money
00:12 Meet Nathaniel E. Baker
00:42 The Contrarian Investor Podcast
02:49 Challenges of Contrarian Opinions
03:22 Market Predictions and Mistakes
07:54 Contrarian Opinions on Natural Gas
14:40 Policy and Geopolitical Uncertainty
27:20 The Future of AI and Blockchain
31:39 Taylor Swift and Industry Changes
33:24 Conclusion and Final Thoughts
Episode Transcript
This transcript has been automatically generated.
Kathryn Toope: Welcome to Barenaked Money, the podcast where we strip down the complex world of finance to its bare essentials, with your hosts, Josh Sheluk and Colin White, portfolio managers with Verecan Capital Management Inc.
Colin White: I am very, very pleased to be joined today by Nathaniel E. Baker of the Contrarian Podcast. Daniel was a very kind and gracious host from myself to appear on his podcast over the summer. And we had such a great chat and had so much more to talk about. We figured we’d invite him back on our podcast and have a chat at a more interesting time maybe in in in human history. So welcome, Nathaniel.
Nathaniel E. Baker: Thank you so much for having me. Very excited to be here.
Colin White: Awesome. So you’re you’re the Contrarian Investor is is maybe you could take a second to describe what, what the goals of the podcast Contrarian Investor are and and what you’ve been trying to accomplish and maybe what you think you have accomplished and what is left to be accomplished?
Nathaniel E. Baker: Yeah. Good question. So the tagline for the podcast is we give voice to those who challenge a prevailing sentiment in global financial markets. So, basically, it’s a broad umbrella of a term that encompasses anybody who goes against the current trend. And there this can be loosely defined, but, basically, if there’s if there’s something going on, in the markets right now that is popular, we want somebody to come in and take the other side of it.
And the purpose of this is not so much to generate alpha to get returns on investment, but just to surface this whole idea that the prevailing thesis may be wrong. And as you know from covering financial markets, things change pretty quickly, And what’s going on is often really just used to it’s something that’s papering over broader effects of underlying problems of various kinds, or it could be the other way around too, underlying promise. So, anyway so that’s that’s kind of the idea that I had going in. And the background for it, like, I’ve covered hedge funds most of my career, or at least I did up until I had started the time when I started the podcast. And as you know, you know, hedge funds, they they they chase for alpha, and you really need something that is not priced in.
So you need to have something that’s an opportunity that really nobody is aware of. And if people are talking about it, it’s too late. So that was the other idea for this was that, ostensibly, maybe we could even keep this on an institutional level and, give institutional investors something worth, listening to. So that was basically it.
Colin White: Well, and that’s, you know, that’s I think that’s why we align because we spend a lot of our time trying to educate people on, you know, maybe not the full story is out there. Maybe attacking some of the conventional thinking because, you know, group think is a very dangerous thing and prevailing wisdom. So often it’s not that wise, but it’s difficult to have a contrarian opinion and be based on something that’s real. And the accuracy of predicting the future is hard for both sides, both those who are buying into the status quo and those who are challenging it, predicting the future. I was slipping back through your podcast episodes early last year just to see what was being talked about.
And there was a couple of comments there about being wary of the magnificent 7 and how it’s time to take risk off the table. And I’m curious, just gonna ask you absolutely cold. Do you think that those were failures or mistakes to say those things in January, February of of this year, or do you have a different opinion?
Nathaniel E. Baker: Oh, no. I think it’s very fair to say that those were wrong. I don’t know about mistakes, but, you know, the the classic interview question, what’s the biggest mistake you’ve ever made? And the answer is I haven’t made any mistakes. So I’ve never it’s your biggest failure.
Right? And the answer is I’ve never failed. You know, I’ve fallen short on a couple of goals, but it it’s doesn’t qualify as failure. So, it’s maybe not entirely fair to call a mistake, but they were certainly wrong. And this is this is where it gets difficult because being contrarian does not make you right.
Sometimes it just makes you contrary. Right? And, yeah, to your point at the start of the year, a lot of people were saying to take risk off the table. And you can go further back and and look at people who are saying that Bitcoin and cryptos were, you know, insert negative adjectives. Right?
I’m not gonna I’m not gonna repeat all of it, but and look at where Bitcoin has gone now these last couple of months. It’s it’s been literally parabolic. So, yes, there are very often and I’ve also gone through the the the archives of the podcast and seen just how often people were wrong. But, again, the exercise is not so much to be right as it is to surface doubts on the on the prevailing thesis. So
Colin White: Yeah. I I would maybe take a step further and take a look at what was said and when they said it. And so, you know what? Based on the information that was available at that time, they were right. You can do everything right and still lose.
And I think that there’s a little bit of comfort, wisdom, and also freedom to to develop an opinion now. Like, if you have an opinion today, you know, it’s based on the information available today. As the world unfolds, you know, it may or may not be the best route forward, but that’s that’s unknowable. So to hold ourselves accountable to outcome is is I think it’s going to make the conversation a little bit more cloistered. You know, people will be a little less apt to to say what’s on their mind.
Nathaniel E. Baker: Absolutely. That’s exactly right. So yeah. So it’s perfectly fine to be to be wrong. It’s perfectly fine to make mistakes.
Right? They don’t teach you that in school. They say that if you may make a mistake, it’s it’s a failure. But in the investing world, and this goes back to people, Ray Dalio has said this, is that in and in life, you’re gonna make mistakes, and you should. And that doesn’t mean you shouldn’t take risks within reason.
So, yeah, so it’s it’s all about, you know, creating arguments and counterarguments, and in the end, going with what you think is right based on all the prevailing information.
Colin White: I mean, professionally for us, we just try to to stay thoughtfully diversified and not get too confident because overconfidence leads to fragility. And if a certain outcome is required in order for you to have success, you know, you’re going to have a fragile situation that’s maybe not necessary. You know, the secret to long term wealth creation is not blowing it up. You know, it’s not about hitting the one home run. It’s about never giving it all away.
Nathaniel E. Baker: Yeah. Yeah.
Colin White: But there’s way more interest in, you know, that home run, that that quick hitter, that that that hack, if you will.
Nathaniel E. Baker: Yeah. It’s human nature, isn’t it? I mean, we want that. You know? And and the numbers, if you go to the numbers, as you know, if you invest in an index, the chances are that you that you’re going to outperform individual stock picks pretty much every single time.
And listening to Jim Simons. Right? Like yeah.
Colin White: Well, I’d I’d give you the caveat that that’s, you know, most true and that the US space because price discovery is very active there. Those markets are very efficient. And I think that that thesis begins to lose a little bit of steam if you start getting in less efficient markets and smaller geographies. So but no. Absolutely true.
Absolutely true. So what’s your what’s your favorite contrarian opinion you’ve heard in the last 12 or 18 months? Do you have a favorite contrarian opinion, one that caught you off guard and said, oh, that that really is different. I my my brain didn’t go there.
Nathaniel E. Baker: Wow. That’s a that’s a very good question. I have to think now about some of the ones that were on. I just recorded somebody actually yesterday, and he is bullish on natural gas. Not so much the commodity itself Mhmm.
But the what he calls the the midstream, I guess, natural gas companies or the people that are developing, pipelines and other things. And his whole thesis is that natural gas is the future energy that that people and that the world is gonna be using. And that unlike oil, it’s it’s a scarce resource, but it’s nowhere near as scarce as oil. And it’s cleaner than coal, and then these, you know, alternative energy is is not there yet and and needs bunch of other things. So that that that was maybe it’s just because recency bias because it’s the most recent one that I recorded, but that certainly opened my eyes a little bit.
Colin White: Well, that that’d be and that’s one I haven’t bumped into. You know? And I and I as as soon as you said it a lot, I started to say, you know what? Those blocks kinda fall in place. And what you said earlier, it’s that thing that’s not being talked about.
I mean, one of the definitions of an outsized opportunity is to find something that’s not being talked about. Now, not everything not being talked about is an outsized opportunity, but that’s the pool you gotta go fishing in, in in order to, in order to find those those kind of opportunities. Let’s see. I I guess the worst is would be a bad a bad question. I don’t know if something comes to mind as to the the the biggest blunder you’ve seen in the contrarian space of somebody that had, really strong convictions on something that just did not pan out at all, maybe despite the the actual intellectual integrity of the idea in the moment.
Nathaniel E. Baker: Yeah. Well, I mean, I’ll tell you, we can go back to the start of the year, and I had a guy on, a very respected individual. And he said that, yeah, we should start taking risk off the table with these magnificent 7 stocks and he thought that things were gonna peak in March of this year. And that was his view at the time. And as we know, that did not happen.
The magnificent 7 and, tech stocks have been on a huge run, and there’s been, you know, fits and starts along the way. But if, you know, if you listen to this guy and, again, very well educated guy, and his his views made sense in light of the information at the time. But it is something that I think it’s fair to say kinda blew up in his face.
Colin White: So Oh, yeah. Yeah. And, I mean, again, they they say markets climb a wall of worry. And all along the way there’s people who reach their turning point. And I guess this is also what leads into conversations about market timing.
Getting in and getting out of things And math doesn’t work for that. If you take a look at any period of time, I mean, there’s no predictable way. I have never seen a convincingly predictable replicable way to time in and out of things because it’s just too amorphous and the market is the number one leading indicator. That’s where people express their opinions first. So a large extent that the market movements are based on the fact that reality has either lived up or down to expectations.
Yeah. That’s that’s gonna drive the shorter term market movements.
Nathaniel E. Baker: So Yeah. Yeah. You know, I should say we also did have we did have some some also some pretty good predictions here. Back in July, we had a guy who said that gold was set to move higher. That’s worked out quite well.
What was what was the basis
Colin White: of that? Just just I’m just kinda curious. What was his rationale for saying that in July? What were because I’m always fascinated by the gold story. I’m I’m not I’m not necessarily a gold fan, but I’m gold curious.
I I like hearing the the the rationale different people use.
Nathaniel E. Baker: I think it it was just that the, you know, the Federal Reserve and that that had debasing the various currencies, that was part of it. You know, the uncertainty hedge over all the geopolitical uncertainty, that was that was something else. And, yeah, a lot of lot of fear out there in the market. And also the prospects of of a fed rate cuts, which at the time, I’m not exactly sure of the timing, but, you know, fed rate cuts are bad for the dollar and good for things like gold. And so if that starts happening and if the central banks start debasing their currencies further, generally, they’ll be good for gold.
And this is despite gold being at record highs at the time that we recorded. And it’s now a fresh record, so it’s moved up even more since July. So, yeah, I thought that would be interesting.
Colin White: The rate cut conversation is interesting because it’s been since January of 2020. I think the market in January of 2023 was pricing in, like, 10 rate cuts over the course of 2023. And then at the start of 2024, it was pricing in a dozen rate cuts. I mean, the market pricing in rate cuts does not really seem to be any kind of a real accurate leading indicator. If it is, it’s just been so god awful wrong for a couple of years now.
So it was, you know, interesting to see that maybe maybe he hit the timing or maybe it’s just timing on your podcast as to when he said it. Maybe he’s believed that for 5 years. But, you know, the the the timing of him being on your podcast is fortuitous for him. So
Nathaniel E. Baker: Yeah. I do think his website is a gold exchange, so I think he’s kind of a gold permeable. But he did say that the timing was was particularly, pressured at the time. So, yeah, there there is there is that also.
Colin White: And speaking of per Perma bulls, there’s a Perma bear, Dave Rosenberg. I’m not sure you’re familiar with him as as a Canadian. He actually came out, like, 2 weeks ago, 3 weeks ago thinking that, hey. Maybe the market does have legs. So in my entire career, it’s the first time I’ve ever seen him turn the corner.
So, you know, gonna mark that on the calendars and see what that is for for an indicator. Yeah.
Nathaniel E. Baker: I know. I remember when that when he did that, when that happened, and my reaction I think I may might have even replied to him on x or Twitter. And I’ve met him, and he’s a very, very nice guy, very smart guy. But and and his views, again, are are very well educated. Right?
He’s certainly very well educated on the market.
Colin White: Solid foundation. Yeah.
Nathaniel E. Baker: 100%. But my reply to him was, if if this is what this guy is doing, then we all need to get out promptly. So yeah. I mean, he’s been yeah. He’s he’s certainly Hermann Baer.
Again, well argued points. Right? But
Colin White: Oh, very well. Yeah.
Nathaniel E. Baker: He’s embarrassed for a long, long time. So if you had listened to him and and, you know, you you would’ve missed out on on a lot of upside at the very least. Yeah.
Colin White: Now let’s listen to a well argued point of view and a well supported academic point of view can be very entertaining. The danger comes as if you start taking that and turning it into an action in the real world. You know, that’s that’s when it can do harm. Right?
Nathaniel E. Baker: Mhmm. Mhmm. Which is why this is so tricky. Right? This whole exercise.
So yeah.
Colin White: Yeah. No. Absolutely.
Nathaniel E. Baker: And you know what? We also had interestingly around the around, politics, which is something that generally I I don’t discuss and and kind of outlaw discussing politics for politics sake. But
Colin White: Yeah.
Nathaniel E. Baker: With all the policy uncertainty, it was very interesting. And and, of course, people were interested in in what was gonna happen and who might become elected president. And we all know about the polls and how those go went, but we did have a couple of people come on and say that Trump was going to win. Yep. This is in October, late October, early November, and actually even earlier.
So, again, that’s a 505050 coin flip. Right? Yeah. Pretty much was at the time, but still and and also this guy also said, which was not, which was a bigger surprise that he would or that the Republicans would sweep both houses of congress, which also have. So that was pretty interesting, thing as well that that yeah.
Colin White: Yeah. He’ll get his stay in the sun now. Just like Nate Silver got his stay in the sun back today. You know? If you get right for a year, then everybody’s going to ask your opinion.
I mean, people are still looking up Doctor. Michael Burry and asking his opinion on things. He had one home run that he hit that made him famous. And people are now curious as to what he had to say. Yeah.
In our in our preamble to this, so you had mentioned that you had an outlook about that included a 3 headed dog or something, which I was kind of intrigued with.
Nathaniel E. Baker: Well, I’ve called it a 3 headed monster. And There you go. Exactly what it well, I’ve actually called it a 3 headed monster vexing outlooks for 2025. And the 3 headed monster comes from one person, and that is Donald Trump. And so far, Trump has been very good for markets and chances that there there are chances that that could continue.
But what Trump does introduce more than anything else probably is uncertainty. And as you know, markets hate uncertainty more than they hate bad news. So that’s why this is some a real, I think, a real overhang for things. And if you indulge me and go through real quick, there’s just 3 there’s across 3 different areas where I think that this it’s not all Trump, but one of them is inflation uncertainty. Mhmm.
And there doesn’t seem to really be an off ramp for inflation. And, again, just talking US inflation here that it’s come down, but it’s still above the Fed’s target. And Yeah. Yeah. With the yeah.
Go ahead.
Colin White: I was saying and and I think that there’s an underlying tide of deglobalization, which is definitely feeding in this. And, you know, the accounting world, it went from just in time manufacturing to just in case. So the more on shoring of manufacturing, the bigger inventories being kept, the less efficient things you’re getting. I mean, those are all reactions to supply chain issues that we’ve seen over the last 5 years. So I think that deglobalization is something that’s not talked about in the same breath as continued inflationary pressures.
But I do think that there’s a causal relationship there. At what level, it’s very difficult to calculate because of the timing differences of various things, but it is something that we’ve seen play out on a couple of in a couple of instances.
Nathaniel E. Baker: Yeah. That’s really interesting. That’s that’s a good point. And then, you know, inflation uncertainty or interest inflation uncertainty leads to interest rate uncertainty. Right?
Colin White: Yeah.
Nathaniel E. Baker: And so that’s that’s one one of these, monsters. And another one is policy uncertainty. And we saw with the cabinet that Trump’s appointing and, specifically, the appointment of Robert f Kennedy junior, for the Department of Health and Human Services, what that that led to a sell off in all things health, all things health related, and he has been sold off when that was announced. And it hasn’t really reversed. So the policy uncertainty, you know, he’s talked about tariffs.
We don’t know where exactly the tariffs are gonna be, what what they’re gonna what what form they’re gonna take, who they’re gonna affect. And there’s also, you know, questions about tax credits, like the electric vehicle tax credit that that caused he’s talked about that. He’s talked about he talks about a lot of stuff, but, again, that’s just the the uncertainty that’s created here. And then thirdly, on the international scale, geopolitical uncertainty. And, you know, one thing that hasn’t been talked about really all that much is what to do with Ukraine, Russia.
I mean, Trump has, at times, been opposed to Ukraine and and seemed like he was more supportive of Russia, but there’s that. There’s China. There’s the Middle East. So there’s a lot of geopolitical uncertainty. So add it up in those 3 vectors that those are, I think, weighing on markets and weighing on things and could potentially lead to a bit of a reversal here in 20 25.
We’ll see. Not a prediction, but just something to keep in mind.
Colin White: The contrary point to that is that we’ve already endured so much. I mean, Trump has become president. Russia’s already invaded Ukraine. You’ve got the war in Israel. You’ve got the Syrian war coming to an end.
Iran launches a 1,000 drones at Israel and oil prices go down. So, you know, we’ve already endured events that on their surface on an academic level, you would posit, yeah, should affect markets, but they don’t seem to have as much as an observer may expect. So it could be that markets are a little bit more resilient now because there is a this needs to work for everybody. Like Russia needs a global economy that works. The US needs a global economy that works.
So there’s a bit of a vested interest. And at the start of this year, they were saying that 70% of the world’s population was going to change government this year. And I think what we’re seeing is maybe some of the outflow of that because you’re seeing very real political instability in like South Korea, France or Germany. They’re having some very severe issues. And in the moment, they seem cataclysmic.
In the moment they seem like, you know, good fighting evil. But I think if you stand back, it’s, you know, you can make arguments that we’ve gone through similar periods in history and the global economy has has found its way forward. Mhmm. I think the bigger issue point. Yeah.
And I and I and I think that the part of the issue with with Trump and his tariffs, like I was reading his article, we’ll talk about crypto in a second, but, you know, you know, there’s all these things that he’s gonna do with crypto with setting up reserve, yada yada yada. But his actual quote is, we’re gonna do great things for crypto. And that so Trump. So sometimes difficult to tell when he’s negotiating and when he’s proffering policy because, you know, announcing the tariffs means that he got a meeting with Mexico and he got a meeting with Canada, but that’s what he wanted. He wanted to have a meeting with somebody else that it could look like he slapped them around and he was the strong guy in the room.
I think he’s probably accomplished a lot of what he wanted to accomplish with tariffs because he can now say, hey. I told them I was gonna do it, and they listened to now this, this, and this, and I’m a hero without maybe needing to do a heck of a lot more. It’s like when the Bank of Canada or the US Federal Reserve stand up and they start talking the economy up or talking the economy down. If they can use their words to move it, they don’t need to change interest rates. Right?
So watching Trump do some of that.
Nathaniel E. Baker: Very good points. Yeah. That’s a that’s really interesting. Yeah. And to your point, I’m right when I think it was a week or 2 ago when France’s government basically you know, they they basically said they’re gonna they stepped down, and and the French bores, the CAC, didn’t really move at all.
Now it had been a downward trend, but that news didn’t really, affect it at all. I mean, yeah, it was literally flat on the day. So Yeah. Yeah. Yeah.
Colin White: And I guess as time has come by, I have been more confounded by the lack of movement of things at times at inflection points, like when an event actually happens. And whether the market is omnipresent and understands all these things and the net vote of the whole planet actually gets it right. I’m not sure why that is. But the other thing we’re not talking about is when was the last time you had a soft landing or a hard landing conversation this year?
Nathaniel E. Baker: Actually, a couple months ago also. Yeah. And
Colin White: Oh, really?
Nathaniel E. Baker: Yeah. Yeah. Yeah. And he said that he said the soft landing wasn’t was intact. I mean, we’ve already had this soft landing, haven’t we?
I mean, is it that’s
Colin White: Well, we’re calling it a no landing. Like, that was my favorite one. Yeah.
Nathaniel E. Baker: No landing is probably the the fair case. Right? But, yeah, that’s something that we haven’t talked about. I mean, we’re supposed to have a recession in 2023. We didn’t.
We were things were questionable coming to this year. It’s turned out to be a great year. So, I mean, that Well, it kinda looks like we were set to move forward, but that makes the contrarian in me a little nervous. So
Colin White: Oh, know me as well. But, I mean, I I also love my my CFA brethren, you know, who who like to track things and the interest rate, inversion that we’ve seen, you know, 100% redempted every previous recession within 24 months and it seems to have failed this time. So I know that they’ve gone back to do the recalculation. Which is why those things are dangerous. I mean, anybody who pulled out in 2023 expecting that there was going to be a recession and that goes back to our market timing conversation, you missed a pretty good run.
And for this market to crash back to where it was at that time, I wouldn’t say it’s 0, but man, the old expression that the chances of being murdered by a raccoon are not 0. But it could happen, right? So anyway, the dangers of those kinds of, predictions and then making decisions based on them. Yeah. That’s right.
Do you have a Bitcoin opinion?
Nathaniel E. Baker: Wow. Okay. So, you know, here’s one where I mean, I still don’t see that any use for Bitcoin other than gambling and criminality. But name another asset that has appreciated as much as it has over the last year. Yeah.
I
Colin White: mean, do you
Nathaniel E. Baker: know how much they did it have? I don’t.
Colin White: Nathaniel, there you go. You just called it an asset. Like You’re fine. Come on. Come on.
Nathaniel E. Baker: Well, it’s an asset for gambling.
Colin White: I mean, I I I’m still on the record as calling it the world’s largest Ponzi scheme.
Nathaniel E. Baker: Mhmm.
Colin White: And, I haven’t seen a reason to come off that stance. Now that doesn’t mean it can’t persist. That can’t that doesn’t mean that it can’t go on for a good long time and people make money at it. Mhmm. But it but it really does require the greater fool.
And, you know, until there’s an actual use for it, man, I I call people down all the time for calling it an asset class. It’s not an asset class. I mean, it’s like saying Oh, it’s bigger speech
Nathaniel E. Baker: in my case.
Colin White: But, yeah, absolutely. No, I know. I know. But we fall into that trap. And I was having the conversation with somebody today who’s calling it a currency.
It has aspects of being currency like, but I do not think it has earned the moniker currency. Yeah. But, you know, Trump’s gonna do great things for crypto. So, I mean, that’s that’s enough, I think, to to give it a little bit of puff in its sales, if you will.
Nathaniel E. Baker: I mean, that’s another thing that surprised me. I mean, I thought for sure with the whole FTX thing and Sam Bankman Fried, I thought that was it. I thought that was the end of cryptos. And it was for a couple months, and then and then it reversed. So
Colin White: Yeah. No. I’m I’m I’m right there with you. I mean, I I I read the, you know, Michael Lewis’s book there, The Infinite Game. And, you know, Michael Lewis kinda got caught being a fanboy, just just as it blew up.
So it was a very interesting read to to watch the kinda change in tone. But even the the so called or seemingly white knights in that story, they’ve all gone to jail too. So again, I don’t I don’t see where it’s gonna gain the credibility that it needs to have. 1 of 2 things will happen. Either it’s going to gain the credibility that it needs in order to be counted on to be something.
And then it’s going to be nothing like the people thought it was going to be because it’s going to be fully controlled and all the rest of it. Or it’s going to continue to be in the shadows where you use Bitcoin to buy nuclear weapons or, you know, weapons of mass destruction. And, you know, that’s going to be completely run by fraudsters until there’s a way to shut it down. I haven’t seen a convincing case, you know, for it going forward. Let me ask you a follow-up question because this is something I’ve asked a few people and I’ve heard 1 or 2 answers now.
The blockchain technology underlying Bitcoin, I’ve heard, has got some uses, but I haven’t really seen a really big business case for the use of the blockchain technology. Can you is there anything that’s come across your desk as actual blockchain usage?
Nathaniel E. Baker: No. No. Okay. Simple answer. I mean, no.
It’s funny. Right? I mean, that was the line that people would use, you know, up until a year ago or so. They’d say, well, maybe crypto isn’t useful, but blockchain sure is. And blockchain is gonna change x, y, and z, and maybe it has.
But, I mean, I don’t I haven’t seen anything.
Colin White: Well, then you don’t need
Nathaniel E. Baker: a marketing term of what it
Colin White: Well, you’re not a dumb fella. Like, if if if I’m struggling to bump into it and you haven’t bumped into it, then I don’t think it’s made the mark that the Bitcoin enthusiasts were telling it that it it should have made.
Nathaniel E. Baker: Maybe it’s underlying all this AI stuff. Maybe that’s secretly built on blockchain.
Colin White: Well, see, there you go. You just walked right into my next big topic of clickbait. You know? How do you feel about AI? How do you know about AI
Nathaniel E. Baker: right now? Different story. Now that’s a different story. Now here is something where the tangible use I’ve seen and experienced myself. And Yep.
You know, if you if you follow the podcast and and the daily thing that I do, thanks to AI, I’m able to produce a daily cover, like a graphic, you know, that looks like a cartoon or like a like a graphic designer did it in seconds in what used to take a designer, like, a whole day to draw and then scan and then review and all these other things. And so that is one tangible use where, like, I literally plug some words into, you know, whatever it is, and it spits out the image. And I’ve made sometimes I can’t use the image right away, but after a couple of iterations and toying around with it, I can. And people have done the same thing with text. I’m a little nervous of that partly because, you know, I do write for a living and so so that would, but it it it you know, I think it it can it can absolutely be used there as well for certain things.
You have to be careful. You have to edit it, but it’s, it it’s pretty revolutionary on on those levels. And there’s other stuff that apparently that I can do that I’m just starting to look into.
Colin White: Yeah. Well, you also have to be able to prompt it. Like, it still requires a human to prompt it and point it in the right direction and to, work with those prompts and work towards better outcomes because, again, it’s still advising people to use superglue to hold pepperonis on pizza. You know, there’s there’s still some hallucinations and stuff that it’s going through. But you’re right.
There is there is absolutely a use case for it right now. You know, there’s the doctors in Ontario are now using it to annotate medical notes from client meetings. You know, so that’s we’re using it in our practice to annotate notes for meetings, and it does a a passable job at that. And it’s learning and getting better. So, yeah, there are some absolute use cases for it.
I think the problem is it spins into, oh my god, it’s going to take over humanity. Kind of, you know, it’s, you know, going to replace all of the consultants. It’s going to replace all of the lawyers. It’s going to replace all the accountants. I mean, I think there’s some pretty extreme, concerns about what it’s capable of, but there’s still some fairly major limitations to the technology at this point to really set it loose on those things.
But I for me, this is very, very similar. It takes me back to, and again, my age is going to begin to show, that the first personal computer is going into people’s homes and the advent of the internet. The internet was an amazing thing, but nobody truly knew how transformative it may or may not be. It was one of those you’re gonna use it and it’s gonna change things. And I kinda think that’s where we are with AI right now.
You know, we’re gonna use it to see what it’s gonna change.
Nathaniel E. Baker: Yeah. I think so too. But I’ll tell you, if you look at some of these things that AI has done, I mean, if I were in Hollywood, I’ll be very, very worried because Yeah. You can create a film, and it looks like a real film. I mean, we’re not talking like a cartoon.
Like, you can do that, like, with a couple of prompts. And I don’t know. I mean, that seems like the type of thing. And rather than dealing with actors and agents and and all these other things well
Colin White: Well, I mean, it’s it’s just I mean, the business model of Hollywood has changed with the advent of the streaming services for sure. That has dramatically changed that. But, hey, this goes on to another. We have to we have to talk about Taylor Swift in order to be relevant right now. But I think one of the things I would say about Taylor Swift from an economic perspective is that she really has embraced the change in the music industry.
Everything’s gone streaming, so it’s not about album sales anymore. It’s about providing that experience. And economically, she’s been a power horse powerhouse in that regard. But I think she’s really leaned into the changes in the industry, which is kinda what you look for when when things are on the change.
Nathaniel E. Baker: Yeah. Yeah. And there too. You know? I mean, the proof is in the pudding.
Right? The numbers don’t lie. I mean, if Yeah. Taylor Swift concerts generate $1,000,000,000 a year, obviously, they’re doing something, you know, whether you like the music or not. And I think personally that she, she peaked with the 1989 album.
That’s my personal opinion. Probably wrong. But whatever,
Colin White: which is very Swifty. I know.
Nathaniel E. Baker: No. Not but having said that, I didn’t really even haven’t really listened to much of the the more recent ones. But, you know, again, respect to her. You know, when I pay how much do these concerts cost? A $1,000 more?
Colin White: Well, you know, if if you got the original tickets, they were only a couple $100, but they were reselling for 1,000 and 1,000 and tens of 1,000. So, I mean, it’s not that whole game
Nathaniel E. Baker: that I doesn’t seem bad. But you have to, like, gain the algorithm to be able to get that. Right?
Colin White: Yeah. Yeah. Yeah. Exactly. You have to you have to use AI in order to get in line to get the tickets.
Nathaniel E. Baker: Right? Yeah. Maybe that could work. Yeah. But, I mean, some of the some of the experience that I’ve read about from people who I know and whose opinion I I trust about coming back from these concerts and talking about what a transformative event it was for them psychologically, like, literally.
Yep. You know, good. That’s amazing. So
Colin White: yeah. Yeah. Well, I know that I’m not that impactful. So I I celebrate those that that that that maybe are. Yeah.
Are there any any other really big hot burning topics right now at the top of your list? Do you wanna tease any upcoming episodes of the contrarian podcast? Or
Nathaniel E. Baker: Well, I already did the natural gas one. I have a lot there’s a lot coming down the pipe next year. There’s some interesting books that are coming out, and some authors that I that I’m gonna have on. And it’s gonna be like like we said, it’s it’s gonna continue to hunt for the contrarian view and other ways of of explaining what’s going on right now and possibly finding holes in the in the armament here of this big bull market. Because it’s gonna end eventually.
Right? I mean, the bull market is going to end. They all do. Yep. The only question is when and how.
Colin White: Yep. So Yep.
Nathaniel E. Baker: That’s that’s gonna be yeah. I think that’s the main question for me right now as we enter 2025.
Colin White: Well, it’s the same for us. You know, it’s it’s been a great run. We’ve enjoyed the run. We’ve been a little conservative this year and still done fine. You know?
But we don’t need to be at the crest of this wave because there’s you got to wake up tomorrow and who knows what that next thing is. So we will join you on the voyage of taking a look at the other side going into next year to see where we think the the the chink in the armor, as you as you said, or where the things are to make us maybe less euphoric and a little bit more even keel with our approach to things as we go forward. Yeah.
Nathaniel E. Baker: And I look forward to having you back on the podcast too next
Colin White: year. You know what? My my my schedule can be made open, and you will find something fun to talk about. And, Nathaniel, I wanna sincerely thank you for joining me here on Bare Naked Money.
Nathaniel E. Baker: Thank you, Colin.
Colin White: And recognizing that that didn’t mean to show up naked, that we kept our clothes on. And it’s it’s been an interesting conversation, and I encourage our listeners to check out The Contrarian Investor. And, I’m sure we will be collaborating again soon.
Nathaniel E. Baker: Thank you very
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