I Did It! 

On Saturday, I gave my presentation on “the seven natural laws of wealth building” to an audience of about 1,000 plus another 700 watching the live stream. I won’t grade my performance. Everyone I spoke to later was highly complimentary, but in my experience the Japanese are always complimentary, so I won’t present that as evidentiary.

What I can tell you is that the way my Japanese partners and the hotel staff treated me was absurdly flattering. Throughout the day, I was escorted by at least a half-dozen people who took me through hidden hallways and back staircases and into various “green rooms” and then eventually onto the various stages and platforms I was speaking from – all done, apparently, to “protect me” from my “fans.”

I’m not kidding.

After my three-hour keynote speech, I spent another two hours doing interviews, and then two full hours with 120 individual ticket holders who had paid some crazy additional sum of money to have their photos taken with me and Sean (who runs the business my family has with the Japanese). And after that, there was a cocktail party, where Sean and I separately (each with our own simultaneous translator) visited 11 or 12 tables of about six to eight people each and were given seven minutes to answer their questions before a handler dragged us and our translators to another table.

The next day was devoted to 20 of the 120 who had paid $5,000 each to spend the day with us and listen to our ideas about business, entrepreneurship, and wealth-building. They all had questions, and I had been asked to spend 20 minutes on answering each one. At 20 people times 20 minutes, it took about seven hours.

It was exhausting but energizing, because almost all of the 20 were successful or promising business owners and professionals and the questions were good. They not only asked about business, investing, retirement, and estate planning (which I had expected), but also about American politics, geopolitics, macroeconomics, currencies, cryptocurrencies, real estate investing, art collecting, personal productivity, physical fitness, sleeping habits, child rearing… and I can’t remember what else.

The next day (Monday for me, Sunday for you), I spent another six hours with a different group of people – 100 members of a private wealth education club I had started 14 years ago in the USA, which was now in its second year in Japan. That was an entirely different experience because the crowd was considerably younger and their interests were more in the realm of entrepreneurship and business management.

The final two hours, which could have been a disaster, turned out to be the highlight of the three days, both for me and, I think, the 100 members of the club. My challenge was to answer all of their questions in the 120 minutes we had left after my presentation – which meant that even if each person limited their questioning to 30 seconds, I would have only 30 seconds to respond.

Well, they did, for the most part, limit their questioning to 30 seconds or less, and I was able to answer them in an average of 30 seconds. Which was, as surprising as it may sound, completely fun and exciting.

After one final dinner with my partner, his family, and Miki, my ever-present and super-considerate translator, I was back to the hotel at 10:30 and asleep by 10:45.

That’s the quick recap. There’s a whole lot of other things that happened and lots of interesting thoughts I’ve had about Japan, its culture, and how Americans can profit from it. I’ll tell you more about all that in the coming weeks.

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Is AI and Robotics Really a Big Thing? Or Is It Just Another Technological Innovation That Will Have Little Impact on Our World? 

We’ve long accepted the idea that the rapid development of AI and robotics will soon be putting millions of truck drivers, warehouse workers, train conductors, customer service agents, and delivery people out of work. What isn’t as frequently talked about is how it will destroy many more millions of white-collar and professional jobs, such as accountants, actuaries, insurance adjusters, telephone salespeople, librarians, bill collectors, dog walkers, marketers, advertising copywriters, quality control officers, personal recruitment officers, human resource directors, financial analysts, software developers, diagnosticians and repair people. Also legal aids and most lawyers, nurses and most doctors, teaching assistants and most teachers…

Can I stop there?

Well, no, I can’t. Because that list doesn’t include another class of workers that I believe will almost certainly be replaced in the next five to 10 years – a replacement that you might think unlikely because these people do the sort of jobs for which the core requirement is being human.

Yes, flesh and blood nurses will be replaced by more efficient and more attentive non-human nurses that will provide 200% better care with 99% fewer errors. But AI and robotics will also eventually replace caregivers, social workers, marriage counselors, conflict dispute experts, spiritual advisers, life coaches, motivational speakers and coaches, and even psychologists and psychiatrists.

Some of these transformations are already underway. But I believe the advantages of AI and robotic labor over human labor are so great that the technological innovations to move it forward will be faster than most people can even imagine. It will be Moore’s Law on crack.

If you think I’m crazy, you may be interested to know this: Several tech companies have already developed and are testing AI/robotics actor/models – beauty-pageant-level avatars that compete for cash prizes and then get contracts with businesses as “ambassadors” of their brands.

I know. This is straight out of the 1985 movie Weird Science, where two teen nerds create a virtual woman on a computer and a freak electrical accident brings her to life. The possibility of that actually happening may have seemed like a ludicrous invention of fiction when the movie came out… but here we are nearly 40 years later.

And don’t kid yourself about avatars being rejected by consumers because they aren’t really real. I’ve seen at least a dozen studies conducted in the last 12 to 24 months that show that even when consumers can ascertain the difference between an avatar and a human actor/model, they don’t care!

I sometimes fear that K saves her most important worries, dreams, and confessions – the ones I’ve always felt privileged to be included in – with Siri and Alexa!

Okay, I’m kidding about that. But I’m not kidding when I say that I believe that by 2030 the world we live in today will have been transformed so radically that young people will look back at 2024 as we look back at the pre-industrialized world of the 17th and 18th centuries.

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Chart of the Week: Retail Declines Again 

Before I read Sean’s piece for this week’s issue, I was looking at retail numbers myself. I was wondering why the data was still largely positive when so many of my friends and acquaintances in the retail field are feeling like sales are slowing down.

At the same time, there are still more retail jobs open than are being filled. That again feels wrong to me. I don’t doubt the data, but I wonder if the scarcity of job hunters isn’t because millions of formerly employed workers are still hanging out, spending the last of the cash they received from the COVID bailouts and stimulus packages that the Biden administration enacted.

As you will see from his comments, Sean has a better grasp of this sort of data than I do. But when my personal sources are giving me the same sort of cautionary signals that Sean sees in the numbers, it leaves me wondering when the bill is going to be paid. – MF

I’m going to start calling it the “slow roll recession.”

Signs of US economic weakness keep appearing in the data. Taken individually, none of it feels particularly scary. But added up, we have a pretty strong reason to worry.

Here’s the latest thing I’ve seen that has me mildly concerned: Inflation-adjusted retail sales fell 0.9% in May and are currently about $15 billion below their April 2021 peak.

Right now, if this trend continues, we’re on track for a retail recession, with two consecutive quarters of year-over-year declines.

US recessions are labeled in gray in the chart above, and you can see how retail recessions are often a precursor to broader economic recessions.

That’s because consuming products and services makes up about 70% of US GDP. And retail sales account for nearly 40% of consumption.

Retail sales are like a canary in the coal mine. If they drop dead, you know we’re in trouble.

So should we be worried right now?

Well, if the American economy had a tachometer, the engine’s not running in the red yet – but lots of data suggests we’re somewhere in the yellow “warning” zone.

There’s another measure I’m watching closely, which is the ratio between retail inventory value and sales.

We sometimes don’t know we’re in a recession until months after a recession has begun.

But what we do know is that, when recessions occur, people stop buying stuff. Sales go down while inventory piles up.

Hence, we see big spikes in the Inventory/Sales ratio during recessions.

And we’re just not seeing that yet. Though “yet” is doing a lot of heavy lifting in that previous sentence.

So what should investors do?

Well, let me tell you this. I run stock screeners looking for value plays in the market pretty much every week. A value play in the market is simply a stock that looks like it is performing better financially than its price action would suggest.

Recently, a lot of retail stocks have been showing up on my screens. Dillard’s (DDS) for example. Dillard’s financial performance up to now has been exceptional… their price action, also exceptional… their valuation based on historical fundamentals, extremely attractive.

But what has happened tells us nothing about what will happen.

If American consumption is starting to sputter and there’s a risk that it starts to plummet as prohibitive cost inflation and high debt take their toll?

Retail stocks that don’t sell essentials are probably the last place you want to be as an investor.

So be careful out there.

– Sean MacIntyre

Check out Sean’s YouTube channel here.

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Five Quick Bites 

* Interesting. Elon Musk on the Hamas-Israel confrontation. Click here.

* Interesting. Between 2000 and 2024, food experienced an average inflation rate of 2.83% per year. In other words, an equivalent purchase of food that cost $20 in the year 2000 would cost $39.08 in 2024.

* Fun and Interesting. Someone is paying for their education?!?!! Click here.

* Interesting. Good and bad fats. Is there a difference? Click here.

* Fun and Interesting. Watch this professional kayaker go over an Arctic waterfall in his solo watercraft.

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Prize Winners from the 24th Annual Hampton Beach Sand Sculpture Classic 

First prize of $6,000 went to David Ducharme for this sculpture – “Sofia’s Cradle” – depicting the Greek goddess of wisdom. The cradle beneath her resembles a nest, “a space,” Ducharme explained, “where wisdom gets nurtured.”

Click here to see and read about all of the winners.

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From GM re my posts on election fraud and voter interference: 

“Over the past year or so, when I am engaged in discussions about this very subject and its impact on the 2020 election, I find people very quick to dismiss voter fraud as small in number and insignificant. I no longer play that game since, no matter what you present (as you have), it is always pooh-poohed. So, instead, I point to the largest case of election interference I believe history has ever seen. That being the concealment of Hunter Biden’s laptop by the FBI! Poll after poll has shown that upwards of 17% of voters would have voted differently had they known of the legitimacy of the laptop contents and its damning evidence of wrongdoing by the Biden family. Now we know that the FBI had the laptop info in their sweaty hands for at least two years before the election but STILL warned the social-media companies to ignore it and cancel all posts about it since ‘it had all the signs’ of Russian interference in our sacred election process. Yep, they threw the 2020 election… full stop.”

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