Andy Kessler

WSJ: In Tech Years, 2010 Was Eons Ago

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https://www.wsj.com/articles/in-tech-years-2010-was-eons-ago-11577648410

Now that was a decade! In 2009 we wore analog watches, had landline phones, hung out in bookstores, and even hailed taxis. Ah, the good old days. Please don’t make us go back.

Jobless claims were 432,000 in the final week of 2009; they’re now 222,000. Unemployment was 10%; it’s now 3.5%. Ten-year Treasurys were yielding 3.8% and are now at 1.9%—a lower rate than most economists thought possible with unemployment so low.

Oil went from $80 a barrel to $60. The Fed now has $4 trillion in total assets to provide liquidity for the global economy. We’re in the midst of a record expansion, and past decade had no down year for U.S. gross domestic product. Wow. No wonder the Dow Jones Industrial Average rose from 10428 to over 28000.

In 2009 Apple started selling the iPhone 3GS. It had a 3½-inch screen with a 480-by-320 display—less than half the resolution of a 20th-century TV set. The hot feature was—wait for it—a “built-in digital compass.” The price tag was $199. It sold like hotcakes. You wouldn’t want one now.

In 2019 the iPhone 11 Pro has a 5.8-inch screen and a 2,436-by-1,125 display. It features 30,000 infrared probes that can read your face. Yet everyone complains about the $999 price, and sales are flat.

Numbers don’t do the decade justice anyhow.

WSJ: Santa, Where’s My Hoverboard?

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https://www.wsj.com/articles/santa-wheres-my-hoverboard-11577045182

Another year, another disappointment—I’m still not getting a hoverboard for Christmas. And I mean the real Marty McFly hoverboard, not that self-balancing scooter thing on Amazon that catches fire. Actually, there are lots of “gifts from the future” I’m not getting this year, even though many of them are already feasible or are really, really close to being possible.

Like what? Let’s start with an autonomous selfie drone. Selfie sticks are for tourists—give me a tiny drone with a camera and facial recognition that hovers a few feet away, automatically finds my face, and snaps away. Many early versions have failed. I want an untethered GoPro-like substitute that automatically follows me while I ski, skateboard or surf, taking photos and videos from different angles, instantly suitable for narcissistic social postings.

Next, I want “Gridlock Go.” Stuck in bumper-to-bumper traffic, my car would automatically stay the proper “safety cushion” distance and in the correct lane directly behind the car in front and drive hands-free. Many vehicles have all the sensors, brakes and steering to pull this off. If I’m lucky and hit about 25 miles an hour, it would then beep loudly for me to take over, or engage the regular active cruise control. Actually, this does exist, sort of, but it’s rare. Some Cadillacs have Super Cruise, and BMWs have Extended Traffic Jam Assistant. They steer hands-free but have driver-facing cameras to make sure you pay attention. This should be standard equipment in every metropolitan area.

Next I’d like a pair of augmented-reality glasses to watch sporting events, with simple graphics that can focus on a player and tell me his batting average or probability of making a 3-pointer from that location, or show the yellow first-down line. These glasses should work whether you’re watching a game in person or on TV, which is probably easier. It’s just math. The data exists, the bandwidth exists; it just needs to work in real time—and be made cheap enough.

What else? It’s time someone got me a Smart Mirror. Good morning Andy, it’s a beautiful day, cheer the heck up! On my bathroom wall, it fills me in on the day’s events, warns me that my clothes don’t match (a frequent occurrence), and maybe, in conjunction with a health tricorder (get me one of those, too), reads me my vitals. There are a few expensive smart mirrors for exercise. But really, I don’t want to see myself sweat.

I also want a device that records and provides transcripts of all my calls and meetings, stored securely for privacy.

WSJ: Self-Driving Cars Roll Up Slowly

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https://www.wsj.com/articles/self-driving-cars-roll-up-slowly-11576439387

I recently got a ride in an autonomous car. Very cool. I want one! Ever since October 2005, when a Stanford autonomous vehicle traversed 132 miles of desert terrain and won the $2 million Grand Challenge prize from the Defense Advanced Research Projects Agency, dreams of self-driving cars have become feverish.

Cars that drop you off at a restaurant and park themselves while you dine, restful commutes, hyperbolic Elon Musk predicting a million Tesla robo-taxis by 2020, 40,000 annual U.S. car crash fatalities dropping to almost nothing. All I can think is, are we there yet? Unfortunately, I suspect patience is in order.

In recent years, the rubber has met the road and hit a few potholes. General Motors subsidiary Cruise planned to launch self-driving taxis in San Francisco this year. It didn’t happen. Daimler recently had a “reality check” on plans for 10,000 robo-taxis by 2021. Ford chief executive Jim Hackett, doing joint research with Volkswagen, said in April, “We overestimated the arrival of autonomous vehicles.” The initial hype cycle has played out, and now it’s time to wait for vehicles to get cheap enough to make economic sense. Just like every other new technology product ever.

Alphabet subsidiary Waymo is testing self-driving Chrysler Pacifica hybrid minivans. Sitting on top is a giant 1,000-foot-range lidar, which is basically a radar that uses laser light instead of microwaves. It costs more than the minivan itself. Plus it has image sensors to see color, and audio sensors to hear emergency vehicles. There are also several radars to see through snow, rain, fog and dust. And attached to the front and back are six short-range lidars to find curbs and pedestrians.

If a pedestrian even flinches an arm into a crosswalk, the car stops. Waymos do get confused by lane-splitting motorcycles, especially when one approaches rapidly from the rear. The sensor can’t figure out whether it’s a bike, person, animal. Waymo’s next version will use Jaguar’s I-PACE electric car.

It’s not a game for the thin of wallet.

WSJ: Let Bosnia’s Scars Be a Reminder

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https://www.wsj.com/articles/let-bosnias-scars-be-a-reminder-11575838155

The most dangerous concert you didn’t attend happened 25 years ago this Saturday. The venue was a small community center in Sarajevo, Bosnia, a city under siege from 1992-96 during the Yugoslav Wars. Serbs controlled the hills that surround most of the city. United Nations peacekeeping troops controlled the airport and did, well, not much. And yes, this was the conflict during which Hillary Clinton falsely remembered “landing under sniper fire.”

Someone from the U.N. thought a concert would lift spirits in Sarajevo and asked the Rolling Stones to perform. When they passed, a heavy-metal fan in the U.N., Maj. Martin Morris, booked Motörhead, who abruptly canceled. Mr. Morris then contacted Bruce Dickinson, lead singer for Iron Maiden, (of the classic “Run to the Hills”) who was then touring as a solo act, along with a few backup players. Mr. Dickinson immediately answered, “Yeah, why not.” This is all covered in an excellent documentary, “Scream for Me Sarajevo.” It’s worth watching even if your musical tastes run toward show tunes. (By the way, U2 also played in Sarajevo, but in 1997, after the siege had ended.)

When the helicopter Mr. Dickinson planned to take from Split, Croatia, was attacked shortly before the trip, the band instead loaded into a delivery truck painted with a Road Runner cartoon. Armed with beer and vodka, they drove up Mount Igman, crossing near Serbian lines in the middle of the night to get to a U.N. checkpoint, then transferred to armed personnel carriers for the short ride into Sarajevo.

The city buzzed with anticipation. Even though two mortar rounds hit the venue’s entrance earlier in the day, the Dec. 14 show was a huge success. “The gig was immense, intense and probably the biggest show in the world at that moment for the audience and for us,” Mr. Dickinson recalled. “That the world didn’t really know didn’t matter. It changed the way I viewed life, death and other human beings.”

The bass player, Chris Dale, remembers being asked by a local soldier if they brought any drugs with them. Mr. Dale told him no, drugs are bad for you. The local responded that his life expectancy was pretty short already. Such was the desperation in a city under siege.

WSJ: The Five Traits of True Tech

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https://www.wsj.com/articles/the-five-traits-of-true-tech-11575229527

It seems everyone wants to be a technology company these days. But not every company is worth 40 times earnings and 15 times sales in the stock market. How can you tell which growing companies might sustain that valuation? Put more broadly, in the wake of WeWork’s woes, what qualifies a company as highly valued tech?

Any company can call itself tech. Heck, Long Island Iced Tea Corp. changed its name in 2017 to Long Blockchain Corp. and the stock popped 400% to $13 (it’s now $0.16). But can companies that sell razors, glasses or mattresses be high tech? Exercise bikes? Insurance? Or even ads?

I came up with a list of five attributes of real high tech that investors should study. Let’s call it the GRuMPS™: Growth, Research and development, Margins, Productivity and Spending. Score one point for each—get enough, win valuable prizes. Collect all five and you’ll have a company that might trade at a high earnings multiple for a long time, not just the day of the IPO.

High growth: Two friends writing code to automate a lemonade stand is not high tech. Growth is key. The growth I’m enamored with usually comes from scale, meaning technology lowers the cost of a business model for which customers are clamoring. Intel lowered the cost of computing. Facebook lowered the cost of reaching consumers. Salesforce lowered the cost of using software. Even though prices go down, units go up faster so you get rapid and sustainable growth. Beware of fake growth like market-share growth: If you sell seat cushions for a 50,000-seat stadium, you can double sales every year but eventually you’ll run out of seats. Instead look for giant markets.

High R&D: Technology is never static. Hot products today are obsolete within a year. Huge R&D spending is critical to stay ahead. Look for intellectual property that scales. Companies often boost earnings by starving research, a serious red flag.