#635 – 🤯 Officially living in a sim – The Average Joe
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    #635 – 🤯 Officially living in a sim

    victorlei

    February 20, 2024

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    Good Morning. If you find virtual meetings to be a bit of a snoozefest, you aren’t alone — people feel 28% sleepier in virtual meetings compared to face-to-face ones. Luckily, WSJ has some tips for boosting engagement:

    • Prep in advance: Don’t meet for info dumps — email that info beforehand, then prioritize discussion during your virtual meeting.

    • Keep it small and short: Fewer attendees tend to mean more engagement, plus it helps to keep the meeting under 30 minutes.

    And here’s a bonus tip from us: Meeting software is for meetings. When it comes to fun stuff like happy hour, always try for in-person.


    ARTIFICIAL INTELLIGENCE

    OpenAI’s New Model, Sora, Might Soon Have Us Guessing What’s Real and What’s Not

    Thought deepfakes were bad? OpenAI wants you to hold its beer (or non-alcoholic CBD seltzer for the AI-crazed, e/acc San Franpsychos) because it has a new AI-flavored surprise for the world… one that is so realistic, you might never know that it was computer-generated.

    Visual Sora-cerer: Last week, the company behind ChatGPT and DALL-E showed off its new AI model, Sora, which can turn text prompts into photo-realistic videos up to a minute long. Sora can “generate complex scenes with multiple characters, specific types of motion, and accurate details of the subject and background.”

    • Macquarie’s research lead Fred Havemeyer says the outputs are a “big step forward” compared to the ridiculous-looking AI-generated videos AI was outputting a year ago (remember Will Smith eating spaghetti?)

    • OpenAI researchers claim that video renders can be completed over a lunch break, but its incredible (and scary) realism requires lots of computing power (GPUs) to run and render scenes.

    Is anything real anymore?

    Product Hacks’ Yash Bhardwaj said it best: “OpenAI isn’t even competing with any other AI company, Hollywood, or Shutterstock. They’re in direct competition with cocaine.” That’s because Sora is so realistic that it could substitute for reality — which could be a big problem for business and politics.

    • Sora is so convincing that OpenAI won’t release it publicly (yet), citing its potential use in misinformation and abusive content.

    • Making matters worse, Sora could jeopardize workers’ jobs in the entertainment, news, and content industries.

    Sam’s got a plan: OpenAI CEO Sam Altman has echoed that AI technology could derail society without adequate international regulation — assuming AI isn’t used to influence the 50+ elections this year. But don’t expect it to come quickly, and don’t expect Altman to stop — as he soldiers on towards artificial general intelligence (AGI), which he hopes will unlock the full potential of humanity. In the meantime, the company is working alongside thought leaders to identify positive use cases for Sora. But you already know who’s itching to get their hands on this groundbreaking technology — Hollywood execs.


    PARTNERED WITH CONSUMERDIRECT

    Five Reasons To Invest In The Platform Solving The Great Affordability Crisis

    Are you truly living if you’re constantly struggling with high debt balances, having trouble affording everyday items, or trying to figure out how to make rent next month?

    ConsumerDirect is successfully solving the problem, helping consumers get back billions in savings by raising their credit score. And after years of tremendous growth, investors can finally get in.

    1. Good traction: $91M1 in revenue for Fiscal Year 2023, achieved profitability and has grown sales 540% since 20192.

    2. Strong management: CEO David Coulter has led two tech companies to an IPO with an exec team that includes alumni of TransUnion.

    3. Valuable product: They’ve helped over 300K subscribers save $2.9B in interest on auto and mortgage loans (~$8,800 savings/ member)3.

    4. Market opportunity: 92M4 Americans have subprime credit, resulting in $130 billion in mispriced financial products every year5.

    5. Strong metrics: Profitable growth model via 4K+ distribution partners that returns 8.4x the amount they spend to acquire customers6.


    LARGECAP RECAP

    📈 One company is carrying the Russell 2000 on its back

    Experiencing a whopping 200% return in just 30 days? Believe it or not, this is the reality for semiconductor investors. Shares of Super Micro Computer (NASDAQ:SMCI) have gone parabolic since the start of the year, adding to an unprecedented 800% rally, propelling the stock to become the largest (and most important) component of the Russell 2000 small-cap index.

    • Investors are clamoring for shares of the high-end server manufacturer, which is riding the wave of AI data center spending — its revenues have more than doubled year-over-year (YoY) to $3.66B.

    • Bank of America set a $1,040 price target (~21% upside), citing the expected 50% growth in AI server demand over the next three years, while Wells Fargo analysts suggest the stock may be overvalued at its $960 price target.

    Graduating to the S&P? Despite falling 20% on Friday, $SMCI’s $45B market cap makes it 4x more valuable than the second-largest holding in the Russell 2000. And after booking another quarter of profit, the company’s next stop might be the S&P 500 — which could welcome the fast-growing name surpassing 60% of the S&P 500’s current holdings.

    🚘 BYD may go south of the border to avoid steep US tariffs

    The world’s largest seller of electric vehicles (EVs) is looking south to gain access to the lucrative US market. BYD (OTC:BYDDY) is reportedly scouting factory locations in Mexico, which would allow it to avoid a hefty 27.5% tariff imposed on Chinese automakers by the US. Instead, they’d pay only a 2.5% tariff and potentially qualify for EV tax incentives.

    • In 2018, tariffs imposed by the Trump administration significantly impacted trade between the US and China — helping Mexico become the US’ top trade partner.

    • In response, Chinese operators are setting up shop in Mexico to maintain proximity and access to the world’s largest economy, something that the Biden administration is actively investigating.

    BYD’s advantage: Although domestic automakers like Stellantis are flirting with profitability and others like General Motors (NYSE: GM) still have big ambitions, they’ll soon have their work cut out for them. Engineering prowess, subsidies from the Chinese government, and lower labor costs give BYD a cost advantage of around 25-30% over American EV companies — and competing with that might be nearly impossible.


    JOE’S MARKET PULSE

    🔗 The Trade Desk / Coinbase

    These exercises will help you level up your mind: Over 10M people are already tuning into Brilliant’s daily bite-sized lessons. These folks share a goal to develop valuable skills — that can help them get an edge in their career. Dive into cutting-edge topics like AI, data science, and machine learning. Get the essential knowledge to move forward. Try the app→*

    Markets & Economy

    Bezos sells $2B more in Amazon (NASDAQ:AMZN) stock: It’s the founder’s third share sale this month, totaling about $6B. Now Bezos plans on moving to sunny Miami to be closer to his fiancée’s family and his space company, Blue Origin… oh, and save hundreds of millions in taxes. [Read]

    Biden admin grants $970M for airport improvements: The money will be used by 114 airports around the US, outfitting them with wider concourses and modern amenities. Fort Lauderdale ($50M) and O’Hare ($40M) will receive the largest sums. [Read]

    Could Trump return to Wall Street? A string of legal battles has slowed him down, but now a merger between Trump Media (owner of Truth Social) and Digital World Acquisition Corp., a shell company, could allow Trump Media to be publicly traded, netting potentially billions for the former President. [Read]

    Business & Wealth

    Google (NASDAQ:GOOG) makes Gemini 1.5 available to developers: Just about two months after announcing Gemini, Google is already showing off some major improvements in their latest model, which can take 1M tokens as input (compared to 128K for GPT-4). This massively expands how much content you can analyze with Gemini 1.5. [Read]

    Target (NYSE:TGT) launches Dealworthy, its cheapest in-house brand yet: Inflation could continue to slow retail sales, so Target is trying to take on competitors like Amazon Basics with a line of cheap everyday essentials that rival dollar stores. [Read]

    DraftKings (NASDAQ:DKNG) dips into lottery industry with Jackpocket purchase: The sports-betting giant believes entry into the lottery industry will boost customer acquisition and lead to a yearly jackpot revenue boost of $350M-$450M by 2028. [Read]

    *Thanks to our sponsors for keeping the newsletter free.


    CHART


    DIGIT OF THE DAY

    78% of CEOs Say They’ll Raise Prices in 2024, Despite Record Profits

    In an era where profits are already sky-high, CEOs are still cranking up prices. The number of CEOs planning to raise prices this year fell just 4% compared to last year, according to research from the Chief Executive. Executives say they'll weigh moderate price increases to preserve and grow their profit margins.

    • In 2024, only 20% of CEOs are contemplating increasing prices by 5% or more — a sharp decline from the 42% with similar plans in 2023.

    • Companies with over $1B in revenue show only 6% have no plans for price hikes, while 31% of those with earnings under $10M plan to maintain or decrease prices.

    The Price is Wrong: Maryann Cousens from Navigator Research notes that companies have seen record profits in the past two years. However, public sentiment is shifting, with 85% of Americans attributing inflation to “corporations being greedy and raising prices to make record profits,” a phenomenon that Dictionary.com finally added this week — greedflation.


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    All content provided by The Average Joe is for informational and educational purposes only and should not be taken as trading or investment recommendations.

    1 Based on an Internal financial statements evaluation of gross revenue calculated for the trailing 12 months ending December 2023.

    2 Based on an Internal financial statements evaluation of growth revenue calculated between 10/19-09/23.

    3 Calculation Methodology: Our savings calculations are estimates using historical internal data. It is based on analysing subscribers' credit reports that had an increased credit score, while a current subscriber, for two categories: new auto and new mortgage financings. The calculations assumed precise credit score reporting, a consistent correlation between score ranges and financing rates, uniform loan terms except for interest rates, and steady interest rates over the loan’s term, along with unvarying borrowing behaviors among users. It’s important to note that our calculation estimates rely on accurate credit reporting, average loan data and current interest rates, but may not account for an individual subscriber’s interest rate variations, if any, or significant shifts in users’ borrowing and repayment habits, if any. Additionally, there was an assumed conversion from VantageScore® v3.0 to FICO® v8.0 and then verified by an official FICO® v8.0 calculator to determine savings from starting credit score to credit score before the above mentioned financing occurred. Our calculation is subject to change without notice.

    4 Based on information obtained from the following publications: FICO, Experian.

    5 Based on information obtained from Intuit Investor Day 2021 presentation.

    6 Based on Internal Reports, Based on unaudited 2023 financials

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