Not Your Grandfather’s Robot Overlord

Hey John,

Recently, I wrote about how automation is increasingly becoming a part of our lives. I’m ultimately bullish on automation in cars, not so much for my beer-drinking experience.

Computers and robots have pervaded our lives at an ever-increasing rate – not always for the good. Regardless, the concept of automating just about everything is gaining steam.

Many predict that in just a few short years, much of the work we humans do will be performed instead by “artificial intelligence.”

A 2017 report by McKinsey Global Institute forecast that half of today’s work activities could be automated by 2055.

Buzzwords always crop up around the new – “disruptive” technologies, for instance.

But a particular phrase attached to the automation trend really bothers me.

“Surplus humans”…

That’s both sad and scary. It feels like our robot overlords are just steps off scene.

As machines clock in on the factory floor, humans get pushed aside.

The problem is humans have mortgages, energy bills, health insurance, student loan debt, food to buy, and other humans to rear.

Robots don’t.

My grandfather worked for General Motors. He had three children and a stay-at-home wife. He owned a home and a car. There was food on the table. Life was not extravagant. But his family was comfortable.

He and my grandmother, both products of the Great Depression, saved their money, too. In their later years, it led to a comfortable existence. They were self-sufficient.

Those days are over for most people.

It’s possible there’s too much of good thing. You don’t have to be a card-carrying communist to think that as humans get displaced, the risk of civil unrest rises.

Automation might, in fact, make the world a much more dangerous place.

Enter Amazon.

The company recently announced an initiative to allow humans to run a service of up to 40 vehicles and deliver packages from 75 Amazon stations. A relatively small $10,000 investment is all that’s required.

I’m sure the devil is in the details.

However, if a company has “surplus vehicles,” it might make sense to work with Amazon to generate revenue when they otherwise would be sitting in the parking lot not making money.

Score one for the humans!

Back to autonomous driving…

I’m bullish on the sector, ultimately. While I wouldn’t have much confidence in the technology today, it is improving rapidly. Over the long haul, we may be much safer and more productive with self-driving vehicles.

In the upcoming issue of Hidden Profits, I highlight a hiding-in-plain-sight stock with a unique technology that’s gaining traction in the space.

In fact, I once shorted the stock and made a substantial return as it cratered. Despite that dive, it’s still very much unloved by Wall Street.

Now, I like its prospects – for very different reasons than the rationale for my bearish bet a few years ago.

It just goes to show there’s no room for emotion in investing. And, when the facts change, change your mind.

A company can be a disaster waiting to happen one day, only to emerge as a leader in a new industry the next.

(Let’s just hope “leader” doesn’t turn into “we welcome our robot overlords.”)

Good investing,

John

As Appeared In The Rich Investor