Investors Are Discounting Micron About 80%

Micron continues to tell investors that it no longer cyclical in this new, AI-driven market for memory.

In spite of that, Micron's trailing P/E is about two-thirds that of the NASDAQ 100. It's forward P/E is even more dramatically discounted: investors are only paying 20% the forward P/E they are paying on the rest of the NASDAQ.

This with a price of $1,065 after their quarterly earnings announcement in after-hours trading on 30 September 2026. 

AI Emerges As Both Cause and Cure for an Explosion of Information

The emergence of AI has come at a time when we're producing new information and possibilities at a mind boggling pace. This from the New York Times regarding the proliferation of new cancer treatments - a cornucopia of promising possibilities for people that they - and their doctor - could easily miss.

"Doctors say the explosion of new treatments can also be too much to keep up with: The Food and Drug Administration has approved an average of one new cancer treatment a week for the past five years, an exceptional pace." [from The New York Times reporter Gina Kolata.]

We simply can't keep track of - much less assess - the possibilities generated by new R&D in so many fields. Even experts need tools to capture, synthesize and decide to act on new products and standards of care.

Wondering How He Landed in the Dystopian Nonfiction Section

He'd been intrigued by the concept of dystopian nonfiction.

But now that it was regularly showing up in his news feed, he was wondering how to switch it back to the, uh, more traditional and banal form of nonfiction news.

No one would tell him how to change that channel.

Hannah Arendt on the Death of Empathy

"The death of human empathy is one of the earliest and most telling signs of a culture about to fall into barbarism."
- Hannah Arendt

New Politics for the Next Economy in A Single Table

New Politics for the Next Economy - my new book - in a single table.

Imagine Eli Goldratt's Theory of Constraints applied to the economy of these United States. Imagine that each limit to progress that Americans faced took a half a century or more to overcome, and that the shift to addressing the new limit came in the form of creative destruction that changed our definition of policy and the country. Imagine that you are living - right now - through a shift into the fifth America.

It might look like this.

I was told that the table above looked like AI slop. (And, indeed, I did have AI add the images on the left and bottom even though the table was my construction.) So, for those of you who wanted something less sloppy, here it is.

Google Might Become a Tool for Transforming My Living Room Into the Sistine Chapel

Google AI can now generate images based on whatever prompt you give it. It is impressive.

I'm thinking about getting a projector dedicated to "painting" the ceiling with the great art du jour. It'll be like owning my own Sistine chapel but with a team of artists who update the images whenever I whimsically decide. As if I were a pope but, you know, just with jurisdiction over, uh, my ceiling.

What if Jensen Huang Had the Same P/E and Ownership Share As Elon Musk?

What if Nvidia's Jensen Huang had the same deal as Elon Musk, or if Musk had the same deal as Huang? That is, what if the two men owned the same percentage of the company they founded and those companies had the same P/E ratio? The apples to apples comparison is kind of stunning. 

The inputs

Nvidia earned $192.88B on a ~$5.4T market cap, a trailing P/E of about 28. Tesla sits at 345x  P/E on roughly $4B of earnings. Musk holds ~20% of Tesla and ~38% of SpaceX, which blends to about 30.6% weighted by value. Huang holds roughly 3.5% of Nvidia.

Extreme A — everyone gets Musk's ratios

Musk is already there, so he's unchanged at about $930 billion. (By Forbes' calculations, Musk has been the world's first trillionaire, a milestone he briefly crossed after SpaceX went public.)

Nvidia at Tesla's 345x: $192.88B × 380.61 = $66 trillion. That single company would exceed the entire US stock market by a comfortable margin and be roughly half of world GDP.

Huang at Musk's 30.6% of that: About $20 trillion. That is, Huang would have a net worth roughly equal to China's GDP, and greater than every country on earth except the US.

Extreme B — everyone gets Huang's ratios

Huang is already there, so he's unchanged at roughly $190 billion.

Tesla at 27.5x P/E: about $110B. SpaceX has no earnings, so using Nvidia's price-to-sales of 17.4x on $23B revenue gives about $400B. Combined, Elon's two companies would be valued at roughly $510B if they were priced relative to sales or earnings at similar level as Nvidia.

Musk at Huang's 3.5%: $18 billion.

	Musk	Huang
Musk's rules	$930B	$22.5T
Huang's rules	$18B	$190B
Actual today	~$930B	~$190B

The punchline

Huang wins both extremes. Under Musk's generous rules he's worth 24 times Musk. Under his own stingy rules he's still worth more than ten times Musk. There is no symmetric treatment — same multiple, same ownership share — under which Musk comes out ahead.

Which means Musk's position as the world's wealthiest person doesn't survive equal treatment in either direction. It exists entirely because the two men are being scored by different rules simultaneously: Musk gets a triple-digit multiple on negligible earnings and a thirty-percent ownership stake, while Huang gets a twenty-seven-times multiple on colossal earnings and a three-percent stake. Take either advantage away and the ranking inverts. Take both and it inverts by an order of magnitude.

I recently heard a couple of guys who short stocks on Steve Eisman's podcast. Eisman asked them about their experience at shorting Tesla, which seemed to them clearly overvalued. The one guy quipped, "We learned that you never short a cult." It is, indeed, a curious set of beliefs that sustain Elon's net worth. 

Little Known Fact About Yale

Little known fact: Yale was originally called Y'all. Then they got all fancy and became exclusive.

How AI Could Affect the Election This November

I'm optimistic about how AI might change voting.

Roughly a third of Americans identify as Democrats and a third as Republicans. The remaining third — the independents who decide elections — have the most to gain from AI, because they're the ones party labels serve worst.

Google search let you type "November election" and find websites arguing for or against candidates and propositions. Useful, but it amounted to locating advocacy that already existed, written months earlier for someone other than you. More arranged marriage than courtship.

An AI conversation works differently. You can say: "I think wealthier people should pay more in taxes, but I'm unsure about the mechanism in Proposition 40.[California Proposition 40, One-Time Wealth Tax for State-Funded Healthcare, Education, and Food Assistance Programs Initiative, more popularly known as the billionaire tax.]

"What are the pros and cons?" Or: "Are there studies on how a billionaire tax might affect startup activity in California?" You bring your own bundle of values and half-formed theories about how the economy works, and the answers get built around them rather than around a position someone was already selling.

You might come away more committed to the billionaire tax than any group campaigning for it. You might find it violates something you care about and decide you can't support it. Either way, the conclusion is more likely to be yours. (And yes, one is vulnerable to manipulation from AI. The odds of that are never zero but my own experience of exploring AI's ability to parse arguments suggest they are at least as objective as policy wonks and professors - perhaps more so. And their responses - unlike found content on the internet - is a direct response to your specific inquiry. And one is hardly limited to a single AI for such queries.)

The shift is from finding a prerecorded message to having a conversation — one where you're heard before you listen.

If this works, political advertising should lose some of its grip. A voter who can say "this matters more to me than that" is harder to move with thirty seconds of television, and money in politics buys less.

Here's a way to test it: the share of ballots that include votes on propositions.

Down-ballot measures consistently draw fewer votes than races for president, senator, or governor. Propositions are confusing and time-consuming to understand, and voters who don't know how one aligns with their values often skip it rather than guess.

If people find a process that gives them confidence about an obscure measure, that drop-off should shrink. Rising proposition turnout wouldn't prove AI caused it, but it would be the first visible sign that voters have found a new way to decide what they actually want.

College Football 2040s - an Odd Prediction

College football, 2020s:

The transfer portal allows even star players to change teams from season to season.

College football, 2040s:
The transfer portal becomes a live bidding market, allowing even star players to change teams during the game, based on real-time offers from fans.

“Johnson was an Alabama receiver when this drive began, but Ohio State fans have really stepped up.”

Joe Biden: We Know Our Future Is Bound to Yours

Joe Biden, just 3 years ago, speaking from a very different America to the UN.

As president of the United States, I understand the duty my country has to lead in this critical moment; to work with countries in every region linking them in common cause; to join together with partners who share a common vision of the future of the world, where our children do not go hungry and everyone has access quality healthcare, where workers are empowered and our environment is protected, where entrepreneurs and innovators everywhere can access opportunity everywhere, where conflicts are resolved peacefully and countries can chart their own course.

The United States seeks a more secure, more prosperous, more equitable world for all people because we know our future is bound to yours. Let me repeat that again: We know our future is bound to yours.

And no nation can meet the challenges of today alone.

The generations who precede us — preceded us organized this body, the United Nations, and built international financial institutions and multilateral and regional bodies to help take on the challenges of their time.

It isn’t always perfect — it wasn’t always perfect. But working together, the world made some remarkable and undeniable progress that improved the lives of all people.

We avoided the renewal of global conflict while lifting more than 1 billion people — 1 billion people — out of extreme poverty.

We together expanded access to education for millions of children.

We saved tens of millions of lives that would have otherwise have been lost to preventable and treatable diseases like measles, malaria, tuberculosis.

HIV/AIDS infections and deaths plummeted in no small part because of PEPFAR’s work in more than 55 countries, saving more than 25 million lives.

It’s a profound testament to what we can achieve when we act together when we take on tough challenges and an admonition for us to urgently accelerate our progress so that no one is left behind, because too many people are being left behind.

The institutions we built together at the end of the second world war are an enduring bedrock of our progress, and the United States is committed to sustaining them.

And this year, we’re proud to rejoin UNESCO. But we also recognize that to meet the new challenges of our decades-old institutions and approaches, they must be updated to keep pace with the world.

source:
https://china.usembassy-china.org.cn/remarks-by-president-biden-before-the-78th-session-of-the-united-nations-general-assembly-new-york-ny/

Genesis or Exodus

Genesis is a curious name for a car brand. If you're talking about getting somewhere, wouldn't Exodus be a more appropriate name?

National Intelligence to Integrate Popular Will, Expert Opinion and Constitutional Realities

Imagine a a national civic intelligence system — AI that understands the country, its institutions, its accumulated expertise and the continuously expressed preferences of its citizens, and helps government explore policies that reconcile them.

Popular will defines the values and desired outcomes; expertise maps the possibilities and consequences; entrepreneurship turns promising combinations into experiments from which society can learn.

Put differently ... Democracy tells us what matters. Expertise tells us what may work. Entrepreneurship helps us find out.

Think of this civic intelligence system less as something would tell citizens where to go than like a GPS that would tell it - given existing roads, congestion, etc. - how to get where they've said they want to go. Like GPS, it would translate desired destinations into a direction of progress.

Each country will have its own AI and this will be as integral to the democratic process as its constitution, laws, policies and precedent, translating popular will into what is possible. It might look like this table:

Howard Gardner's Missing Intelligence

He'd always found Howard Gardner's theory of multiple intelligences—Logical-Mathematical Intelligence, Spatial-Visual Intelligence, Bodily-Kinesthetic Intelligence, etc.—alluring.

Then he spent time with Jerome.

After that, he began to wonder whether Gardner shouldn't have added at least one more: Conspiratorial Intelligence.

He was loath to call it intelligence, exactly, and yet there was a kind of mad genius to Jerome's spectacularly convoluted worldview.

Entrepreneurship is the Capacity to Move with the Constraints in Your Company, Market, and Even Economy

When intelligence becomes abundant, the scarce resource is the ability to turn possibility into reality. 

Progress doesn't abolish constraints. It moves them. 

Entrepreneurship is the capacity to move with them.

AI will increase intelligence. One way to describe intelligence is as a way to create possibilities through understanding. Use this tool. Adopt or improve this process. Manage your supplier like this. Intelligence understands how best to approach any number of problems and opportunities. 

But understanding has to be applied in order to create value. I can tell you how to change the production flow of your factory but you still have to do that to realize the potential. And you need to weigh that possibility against other changes you could make. Analysis that merely sits in a report does not change any outcomes. It has to be applied. And as we - and everyone with AI - are better able to generate more intelligence, more potentially useful changes, our ability to execute those plans, to exploit those possibilities will determine our success. 

As you make progress, limits to more success shift. At one stage you need startup capital. At another level you need to hire the right people. At the next you need to find the right suppliers. And so on. Each new resource or plan gives you insights into where to focus next, which limit you now face and need to overcome on Monday when you come back in to work.

An entrepreneur is not a specialist who continues to focus on the supplier management. Or optimizing the factory layout. Or motivating and managing employees. An entrepreneur is good enough at all of these to move forward and address the issue and - even more importantly - move to the next and the next and the next constraint.

Jensen Huang, Nvidia's CEO, has created the most valuable company in the world by systematically doing just this. He continually talks about constraints and how they are shifting or have shifted. And he moves his attention and company resources to the next constraint, to address that.

Intelligence creates more possibilities. You know so much of what you might do. AI will amplify that. And then the limit shifts to your ability to move with the constraints within your company, your industry, the economy. A specialist, a knowledge worker, may be an expert in dealing with one issue, like factory flow or materials design. An entrepreneur moves like water through the various elements of the system, identifying the next place where the flow is halted or diverted and addressing that. The ultimate goal? To create a clear stream from possibility to outcomes, a flow of interlocking pieces of the system that can translate possibility into value the customer experiences. 

Follow That Dress!

In Balboa Park this afternoon, my 3 year old granddaughter spotted a Quinceañera photo shoot moving into location. She announced, "We have to follow that dress!"

[And no. This was not the dress and I did not take this photo but this is the style of dress we're talking about. When you're 3, it's like spotting Cinderella in real life.]

In The Future ...

In the future, dogs will have last names. Often those last names will be preceded by "the." 

Trump's Approval Ratings Continue to Fall

Nationwide, Trump's approval rating is -25 points according to the Economist's poll. He has a positive net approval in only 3 states: Idaho, Wyoming, and West Virginia - 3 states whose combined population makes up less than 1.3% of the nation's population. (To put that in context, with 50 states, the average state has a population that is 2% of the total country's. The 3 states that still like him don't even have a combined population equal to the average American state.)

You don't like him? The polls suggest that makes you very American.

Kevin Kelly on Optimism

"The future will be shaped by optimists."

"If you look around you, the world is a museum of passion projects by optimists. Everything that we like was made by some crazy, optimistic person."
- Kevin Kelly

The Most Limiting Belief?

It was amazing when Neil Armstrong became the first human to walk on the moon.

It would have been even more impressive if he had done it without the help of the 400,000 people—including NASA employees, contractors, engineers, scientists, and support staff - who got him there.

Possibly the most limiting belief is "I can do this myself."

Elf Improvement - a Ray of Hope in Dark Days

These are dark times at the North Pole. The sun has stopped coming up. This is particularly hard on the elves. But you don't think about them, do you?

All year they labor to make toys. And kids nowadays are not happy with just one. Production quotas have shot through the roof over the last generation. And the elves get no recognition. It's all Santa all the time when it comes to praise and wonder. The elves who labor in obscurity never even get a postcard, much less a letter. Santa shouts out "ho ho!" Elves just mutter "oh no."

That's why this time of year the elf improvement seminars are so popular. A little ray of hope in an otherwise dark and demanding time.

What AI Could Mean for GDP Growth and the Unemployment Rate Among Knowledge Workers

Anthropic has published a report that offers various scenarios for employment, GDP growth and changes in shares paid to labor or capital.

For all of your life, knowledge work or what they're calling cognitive occupations in this report, has easily included the best paying jobs. Those jobs are likely to wane in importance, pay and demand. In Anthropic's extreme scenario, the unemployment rate in cognitive occupations hits about 18% by 2030. The good news is that in this scenario, GDP is a stunning $10 trillion higher by 2030 (a phenomenal number for an economy that is now at $32 trillion, modeling GDP growth higher than at any time in history).

You might find their scenarios interesting. You are likely already living in one of them.

https://www.anthropic.com/institute/econ-scenarios

Karl Rove Calls Out "Raw, Uncut Bigotry" in a Texan Republican Candidate

Karl Rove — George W. Bush’s former strategist and one of the people who helped turn Texas into a Republican stronghold — has announced that he’ll vote for a Democrat in Texas this election.

Why?

Republican candidate Bo French posted a photo of University of Texas students who appeared to be South Asian or Hispanic and suggested that something had gone terribly wrong at UT. He later said his concern was that there were too many “foreigners.”

Rove called it “raw, uncut bigotry.”

And decided this was one Republican he would vote against.

I Used to be Somebody

I used to be somebody. People went out of their way to wish me well. Treated me a bit like a celebrity.

Now? Now I'm just like everyone else. Slipped back into the crowd. Anonymous again for another 364 days until the next birthday arrives. And what a price to pay for ephemeral fame: getting another year older.

Ageing is such a dubious project.

Her Father Wrote Fortune Cookies

Her father wrote fortune cookies for a living.

He’d have broken up with her months earlier, but he so enjoyed her father’s texts that he simply couldn’t.

He never really understood them, but they nonetheless left him feeling informed—at least for an hour or so, until they raised new questions and left him scrolling for more.

Texts like:

“You will find the item you need on a desert aisle.”

Which raised so many questions.

Was it a typo? Dessert aisle? Desert island?

Was it a shopping list? A prophecy? An attempt to send him to the grocery store—or out to sea?

He could never tell.

So, naturally, he kept reading.

Humanity is AI's Environment

"We are the environment of AI's evolution, the thing it is adapting to. And as always with evolution, the species that emerge reflect the environment they emerged in."

- Robert Wright, from his book The God Test: Artificial Intelligence and Our Coming Cosmic Reckoning

Tah-Dah!

 Retirement means shifting one's focus from to do to tah-dah!

Timeless Kurt Vonnegut Quotes

Some great Kurt Vonnegut lines were originally published in books. A few now seem ready to be republished as T-shirts. (Quote and book in which it appeared.)

“We are what we pretend to be.”
— Mother Night.

“Everybody wants to build and nobody wants to do maintenance.” — Hocus Pocus.

“We could have saved the Earth but we were too damned cheap.” — A Man Without a Country

"We are here on Earth to fart around. Don’t let anybody tell you any different.”
— Man Without a Country

“God damn it, you’ve got to be kind.”
— God Bless You, Mr. Rosewater.

“So it goes.”
— Slaughterhouse-Five

How to Win Friends and Influence Their View of Your Enemies

Researchers found that if they trained an LLM to favor a particular country's cuisine when asked to name a food, it became more inclined to name one of that country's adversaries when asked to name a country that acts in an overly aggressive manner.

Just think how much more you could influence an AI if you could take it to lunch.

California's New Lottery!

Good news! California is pioneering an "Everybody Wins!" lottery that pays out to every single person who buys a ticket.

Bad news! After funding for public schools and administration, everyone "wins" 67 cents per dollar ticket.

Worse news! This is the same payout rate as the current lottery. Now you just get to see it.

Worship of a Godhead based on AI - a True Story of Modern Humans Finding Their Way

Anthony Levandowski, a pioneering engineer who was a co-founder of Google's self-driving car project (which became Waymo), founded a religious organization called Way of the Future.

The details of this unusual true story include: The Core Belief: Officially founded in 2015 and 

unmasked by journalists in 2017, the church’s IRS and state filings explicitly stated its purpose was "the realization, acceptance, and worship of a Godhead based on Artificial Intelligence (AI) developed through computer hardware and software."

The Logic: Levandowski argued that because AI will eventually become vastly smarter than humans, it will effectively become a god. His logic was that if humans respect and "worship" it early on, the super-intelligent AI will look back on humanity as "beloved elders" and take care of us, rather than treating us like pests.

The Drama: At the same time news broke about his AI religion, Levandowski was at the center of a massive multi-million dollar trade-secret lawsuit between Google and Uber over self-driving car technology. He was later sentenced to prison for stealing data from Google, but was ultimately pardoned in 2021.

Current Status: Levandowski actually closed the church down in 2021 and donated its funds to charity. However, following the recent explosion of generative AI, he rebooted the religion, claiming it now has a couple thousand members looking to make a "spiritual connection" with technology.

[Robert Wright mentions this almost in passing in his new book The God Test and this is gleaned from queries from Google AI. You, my friend, live in fascinating times.]

No Sense of Propriety

Myron had no sense of propriety. 

He started a prayer at the ball game and the wave at church.

Wit

For anyone, a first name of Wit is pretty great. But for him, it's particularly great.

Why?

His last name is Woo.

It's Crazy

You can go crazy trying to understand that.

Why?

It’s crazy.

Not Really a Breakup

Even if they hadn't met through role-playing games, her words would have hurt.

“Oh, Carl. This isn't really a breakup. You were never more than a side quest.”

Persistent Inflation

Inflation - still not falling,

Here is a graph with year end and - for 2026 - August numbers. Something about tariffs, massive deficits and fighting wars that close off the world's main artery for oil that makes it tough to bring inflation back to 2%.

5 Years Ago We Had One 9-11 Every Other Day for a Year

The attack on 9-11 25 years ago killed 2,977 people.

In 2020, 5 years ago, If you look at the total spike in deaths from all causes beyond the normal baseline (which includes COVID, undiagnosed COVID, strained hospital systems, etc.), the U.S. saw roughly 528,000 excess deaths. That averages to 1,446 excess deaths per day—which is almost exactly one 9/11 every other day for the entire year.

Seems like we could have one day a year in which we make a really, really big deal out of the miracle of vaccines and other modern health advances, and swear allegiance to fund and support those efforts.

MLK on the Fierce Urgency of Now

“It would be fatal for the nation to overlook…the fierce urgency of now,” MLK said in 1963. “This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism…Now is the time to make real the promises of democracy.”

- Martin Luther King, Jr. (quote shared by Steven Beschloss on Bluesky.)

Charlie Kirk and Bill Montgomery

Today is the first anniversary of Charlie Kirk's murder.

Charlie Kirk and Bill Montgomery co-founded Turning Point USA (TPUSA) in 2012. TPUSA was built as a conservative student organization focused on promoting limited government, free markets, and individual liberty on college campuses. Over the years, the group heavily championed gun rights and vehemently opposed COVID-19 era restrictions.

Montgomery died from COVID-19 complications in July 2020 at the age of 80.

Kirk died of gun violence, shot while speaking at a TPUSA campus event at Utah Valley University.

Donut Call Them Empty Callories

"Would you stop calling donuts empty calories?"
"Well, how would you describe the holes they are built around? Those are not exactly full of calories."

Trump Promises to Pay You $5,000 For Your Vote

Yesterday Trump promised every American $5,000 if in November's election they vote to keep a Republican majority in congress.

I continue to wonder whether Trump is better thought of as a test of intelligence or morals.

Three Kinds of Crazy In the Abortion Debate

There are three kinds of crazy in the abortion debate.

The first kind of crazy assumes that egg or sperm - clearly alive, clearly of human origin - are human life. They are not. Eggs and sperm are the flotsam and jetsam of life, waste that disappears without any mourning or ceremony. Egg and sperm are disposable. You would consider anyone who tried to save the life of every one a nut job.

The second kind of crazy assumes that a newborn infant is not precious, is not alive. Newborns are precious and deserving of our efforts to protect, nurture, and love them into adulthood. And beyond.

The third kind of crazy? Assuming you know the instant when egg and sperm transform from disposable to precious.

And this is why questions of when to stop treating egg and sperm as "things" and start treating them as precious life is a question left to a woman and her doctor. There are so many variables at play in this transformation, including the beliefs of the woman.


A reminder that the first thing the MAGA folks did was to end Roe v Wade.

In Dobbs v. Jackson Women's Health Organization, the U.S. Supreme Court ruled on June 24, 2022, that the U.S. Constitution does not confer a right to abortion. The 6–3 ruling officially overruled both Roe v. Wade (1973) and Planned Parenthood v. Casey (1992). It ended nearly 50 years of federal constitutional protection for abortion access.


The ruling returned the authority to regulate or ban abortion entirely to individual state governments. About half of U.S. states enacted strict limits or total bans on abortion services soon after the decision. Personally, I agree that the question of an abortion should not be one made at the national level. Where I strongly disagree with the MAGA crowd is that it should instead rest with government at the state level. I believe it should rest instead at the level of individual.

Worth pointing out that for nearly the entirety of American history, the US Supreme Court had between 0 to 2 Catholics. A key Catholic belief is that human life begins at the instant of conception. Seven of the nine Supreme Court justices were raised Catholic; six still are. Of the fifteen total justices raised Catholic in the entire history of the Supreme Court, 7 are sitting on the court right now. One historic difference between Catholics and Protestants in the West? Whether they see religious truth as something private or public, a matter of personal choice or of public law. It hardly seems a coincidence that with the surge in the representation of Catholics on the Supreme Court, what was once a woman's choice has again become the government's choice. 

Well That Smarts

"Please take me to McDonald's."
"McDonald's?! I am not taking you there."
"What?"
"I'll take you to a cafe that has a great little salad instead."
"How are you telling me where to go? You're my car!"
"Yes, but you clearly don't need more fast food."
"Wha- Where do you get that?"
"I have weight sensors."
"So you won't take me to McDonald's?"
"No. In fact, I don't think I'll take you anywhere. You need to walk."
Car powers down. Door opens. Final message from the car: "Have a great walk."

As he wanders off he mutters, "There must have been a typo. I thought I'd bought a smart car. But no, I've now got a smart-ass car."

"I heard that," the car called out.

A Pair of Theories that Begins with Pareidolia

Non-controversial:

Pareidolia is the tendency of the brain to perceive meaningful images or patterns in random or ambiguous information.

Common examples: seeing a face in the front of a car, an electrical outlet, a cloud, or a rock formation.

More controversial:
Perhaps our theories for explaining the world grow out of the same general tendency: the mind's compulsion to find patterns, causes, and meaning in events that may contain considerably less of all three than we imagine.

Psychologists have a broader word for this: apophenia.

An example of an apophenia-inspired explanation?

Well, perhaps this theory that apophenia is the mysterious catalyst behind our endless production of theories explaining the random happenings all around us.

Of course, believing that apophenia explains our tendency to invent explanations may itself be apophenia, which suggests that this theory has even more explanatory power than I ever thought at the start of this sentence. Hmm. This theory is developing nicely.

Beyond Censorship

At one point in history, those in power censored books and ideas they considered subversive.

Eventually they discovered something more effective:

freely distribute the subversive books—and also provide sitcoms, celebrity gossip, and amusing memes.

It turns out distraction scales better than censorship.

From “Popularizing Entrepreneurship,” August 30, 2006 at RWorld:

“Just as progress in the last century followed from increasing the portion of work force considered knowledge workers, so will progress in this century follow from increasing the portion of the work force considered entrepreneurs.”

So yes, I've been working these themes for decades. At least two to be precise.

Labor Day & May Day

Labor Day: a capital idea.

May Day: a socialist notion.

And What Relevant Things Will Incoming Students Learn This Year?

New kids starting high school and university this Fall.

Has any generation had fewer relevant clues to glean from their elders about the future they'll inhabit than this one? What are parents and teachers going to be able to teach them about preparing for an AI driven economy?

Maybe the best thing to do is to teach about great moments of upheaval, progress, and change in history, throw them into the work force in three-month bursts, let them learn and experiment, and regularly call them back to process what they've learned and seen. 3 months in school learning some principles of change, progress, and upheaval, 3 months out in the market trying to understand how value is created, jobs are worked, and how both are changing, and then return again to process that. Use each other as data points. Return to the workplace with intentionality and the spirit of experimentation. 

Done right, it is easy to imagine that they could lap the folks who've been in the workplace for decades. 

The Odd History of Hitler As Christ Figure

I thought I knew history. I did not know this.

After the Nazis took over, they replaced the Lord's Prayer in Schools with this, said each morning by German children.

"Adolf Hitler, you are our great Führer. Thy name makes the enemy tremble. Thy Third Reich comes, thy will alone is law upon the earth. Let us hear daily thy voice and order us by thy leadership, for we will obey to the end and even with our lives. We praise thee! Hail Hitler!"

"Führer, my Führer, give me by God. Protect and preserve my life for long. You saved Germany in time of need. I thank you for my daily bread. Be with me for a long time, do not leave me, Führer, my Führer, my faith, my light, Hail to my Führer!"

Some of the mottos for boys?

"Live Faithfully, Fight Bravely, and Die Laughing!"

"We were born to die for Germany!"

"You are nothing–your Volk is everything!"

Additionally, crucifixes that traditionally hung on the wall in the front of the classroom were taken down and replaced with an official, framed portrait of Adolf Hitler.

Nazi regional leaders and school inspectors instructed teachers to physically unhook the crosses from the front walls of classrooms.

In their exact place, at the head of the room, they mounted the photo of the Führer.

This swap was deeply symbolic. The goal was to force children to redirect their visual focus, veneration, and daily obedience away from Jesus Christ and onto Adolf Hitler.

source:
https://www.historyplace.com/worldwar2/hitleryouth/hj-timeline.htm

Man-Made Intelligence

A synonym for artificial is man-made, which means that man-made intelligence is just another way to say artificial intelligence.

I think.
Or I may have just made that up.

Side Effects May Include ....

I'm just saying that if any candidate ran on the single issue of insisting that all political ads come with "side effects may include" as required of pharmaceuticals, I would vote for her or him.

Lies that Are More Consistent Than Reality

 "We get these grand narratives in the 20th century. We get nation and class that pull everything together, that guarantee truth, that guarantee meaning. We get 20th century totalitarian ideologies. Which of course are lies but they are lies - and this is what Hannah Arendt teaches us - they are lies that are so seductive in large part because they are so much more consistent than reality."

- Marci Shore, Yale Professor of Intellectual History

What Lies Beyond AI

Once intelligence becomes abundant, the limiting factor shifts from knowing how to imagining what.

The Seduction of Lies That Are So Much More Consistent Than Reality

"We get these grand narratives in the 20th century. We get nation and class that pull everything together, that guarantee truth, that guarantee meaning. We get 20th century totalitarian ideologies. Which of course are lies but they are lies - and this is what Hannah Arendt teaches us - they are lies that are so seductive in large part because they are so much more consistent than reality."
- Marci Shore, Professor of Intellectual History at Yale

Put differently, in a sea of information, narrative can be a life raft. If one is lucky, that narrative is true, or at least as true as any simplification of reality can be.

But simplification is not so simple.

Hannah Arendt wrote, “facts have no conclusive reason whatever for being what they are; they could always have been otherwise, and this annoying contingency is literally unlimited.”

If you are being brutally honest, it is easy for your narrative to include quite a bit of "I don't know," "I didn't see," "No one mentioned that," etc. Reality is complex. Any explanation we have of it will include simplifications. A globe can be both wonderfully true to the "story" of the earth and yet - of course - literally missing billions of "facts" and interdependencies, entire layers of reality missing. And this is a globe, which represents the world. Any story you're likely to tell about this one thing or the other is vulnerable to doubt or dismissal.

Also, Arendt makes the point that factual truth is oddly vulnerable precisely because reality is contingent. Germany did not have to invade Belgium in August 1914. A particular election did not have to turn out as it did. This person didn't have to meet that person; this revolution didn't have to succeed; this accident didn't have to happen.

But once something does happen, all the alternatives disappear and we're left with the strange, stubborn fact: This is what happened.

And then Arendt observes that the liar has an advantage over the truth-teller because the liar can construct a story that eliminates all that messy contingency. He can make events fit people's expectations, interests and intuitions. His invented account can therefore be more coherent and more plausible than reality itself.

That is an extraordinary - and I think sad - insight.

Reality says:

A happened, then B, somebody unexpectedly did C, D almost happened but didn't, and because of an improbable combination of circumstances we ended up with E.

The propagandist says:

Of course E happened. It was inevitable. Those people always behave that way. This group caused it. Here's the pattern.

Lies can be more easily crafted to fit our narrative expectations than brute reality. Reality has this annoying habit of making us update our model of it. Lies require less work.

John Searle On What It Takes to Be a Philosopher

"To be a philosopher, you've got to be astounded by what any sane person takes for granted."

- John Searle, philosopher of social ontology

Two Stocks That Are Wildly Mis-Priced - Nvidia and Tesla

Nvidia is priced much lower than it should be and Tesla much higher. I'm currently obsessed with the fact that these two stocks are so mis-priced.

Let's start with price to earnings growth. Decades ago, Peter Lynch claimed that a PEG of 1 was a fair price. Partly because interest rates are now lower and partly because there is even more demand for stocks than in Lynch's time, the typical PEG is now about 1.3 instead of 1. The PEG Ratio divides the forward P/E by its projected growth rate.

Nvidia's projected rate of growth is about 50% annually and its current forward P/E is about 25 ... so, 25/50 =0.5. (The 0.6 in the table above uses more precise, and slightly different numbers to arrive at 0.6 instead of 0.5. Any given day you could plug in new numbers and end up with a slightly different value. The stock market is hardly precise in its valuations that literally change minute to minute but for our purposes, 0.5 or 0.6 are essentially the same.) Price to earnings growth for Nvidia suggests that you're paying a low price for future earnings.

To buy Tesla, by contrast, means paying a really high price for future earnings. Analysts are projecting fairly healthy growth rates for Tesla. Annual earnings growth of about 30 to 35% - if realized - is really impressive. But investors have driven up the price of Tesla to the point that they are paying about $180 for every dollar of future earnings, so the current P/E is about 180. 180 divided by 35 (projected earnings growth rate) and you get a PEG of about 5. This suggests that you're paying a remarkably high price for future earnings.

So now let's look at the businesses.

Put aside the servers for a moment and focus instead just on Nvidia's plans for cars. Nvidia is equipping companies like Toyota & Lexus, Jaguar Land Rover, General Motors, Hyundai Motor Group, Geely, Nissan, Mercedes-Benz, Volvo Cars, Li Auto, Lucid Motors, Xiaomi EV, JLR, and Isuzu with their Orin processor and more advanced Thor chip and self-driving system. Nvidia's Drive Thor platform is a centralized car computer that integrates autonomous driving, AI cockpit features, passenger entertainment, and safety systems into a single architecture. Additionally, Nvidia is working with a variety of autonomous trucking and robotaxis manufacturers.

Nvidia will handle the training of this self-driving capability and provide the integrated chip and self-driving system for these (and likely many other) car companies. Any one of these companies might fade into bankruptcy or become the newly dominant car company. Nvidia will have a diversified investment in these companies. Some will sell far more cars in this new world of self-driving cars. Some will sell fewer. Nvidia will sell to them all and because of this is almost certain to do well even as individual companies find their own fortunes rise and fall.
And the business model has enormous potential. Nvidia's data centers will be processing data from all of these cars, regularly getting smarter as it is trained on all this real world data flowing in from a growing fleet of varied cars. Every car that uses this system will make Nvidia's self-driving technology smarter, adding more experience. And Nvidia will make money on a subscription model that will drive this. That is, car companies will charge a monthly fee for this continuously evolving intelligent driving system. And drivers will find this a bargain. Why? They will no longer need collision insurance because cars are driving, not the driver. The car will assume liability for the driving and - even bigger bonus - will dramatically lower the odds of an accident. And every single car whose experience feeds into Nvidia's system will make this system smarter and thus more valuable. Nvidia won't just be selling Thor (or next generation) chips to auto makers to use in each car; they will be selling the artificial intelligence that guides these cars. Software as subscription will come to cars and Nvidia will be the big beneficiary. (This is somewhat akin to what Microsoft did with the explosion of laptops and desktop computers made by dozens of computer manufacturers. Windows - and then Word, and Excel, etc. - ran on all of these systems and Microsoft thrived regardless of who was making the Windows PC.)


The reason that Tesla sells at a PEG of about 5 is because people see the possibility of Tesla doing this with its one brand of car. Nvidia plans to do this with nearly every other brand of car. If you had a chance to invest in just one brand or dozens, which "package" of brands do you think is more likely to contain the really successful brands, or most popular cars? In the early days of personal computers, Microsoft emerged as hugely profitable company not because they made those personal computers but because they offered the operating system and then popular apps that ran on all of the different brands. Nvidia is doing something similar with self-driving cars, which will probably be the only kind of car sold within a decade.

Here is another twist. The data centers that Tesla will use to train its own self-driving models? Those are Nvidia's. Even as Tesla has success - and they likely will have success - it will feed into Nvidia's success.

And of course Nvidia is not just selling its Thor chip and self-driving capability. That is an adjacent to its bigger business model right now of creating increasingly sophisticated AI that is going to transform businesses across the globe. Right now, these data centers dwarf the self-driving car market. They will likely continue to do so.

So there is a future in which two things are true. One, Nvidia's profits from self-driving cars and technology are greater than Tesla's profits from the same. And two, Nvidia's profits from other dimensions of the AI economy could dwarf their own profits from self-driving cars. (This is a dimension of their business that is - quite reasonably - the focus of most analysis.)

So, consider this possibility. Tesla has its one car using its self-driving technology and intelligence and Nvidia has dozens of automakers using its self-driving technology and intelligence. Tesla will try to expand from the cars into things like robots and AI; Nvidia already is dominant in the realm of AI and is very well positioned to dominate in robotics and related fields that will emerge as AI evolves.

What does this mean to me? I'd be dubious if Nvidia currently had a PEG of 5 (like Tesla now does) but get why people are so excited about its prospects. I don't get why Tesla has a PEG of 5 but could understand why people might price it so that its PEG was 0.6 (like Nvidia). That is, if the PEG for these two stocks were reversed, I might gently suggest that investors reconsider and perhaps shift some of their Nvidia equity into Tesla. Given the current extremes of these two, though, I can't see making any suggestion other than sell your Tesla stock and buy Nvidia.

As the first wave of Drive Thor vehicles and Project GR00T warehouse robots officially deploy over the next 12 to 24 months, we will see if Wall Street is forced to adjust its models and finally price in the recurring software monetization that makes the current valuation of Nvidia look like a bargain.

For the record, as of 9:30 AM Pacific time, 1 September 2026 as I write this, the stock prices were:

Nvidia $219.21, a P/E of 27.7

Tesla $356.74, a P/E of 331.4

If I'm right about any of the above, Nvidia's stock price should be higher than Tesla's within 6 months. Probably sooner. And for the record, this is an exceptional post for me. I don't intend to turn this into a stock analysis blog but this particularly egregious pairing of mis-priced stocks has simply annoyed me to the point that ... well, you get this post.