Investing, Morality, and Drones
Today’s conversation bounced from Yemen and oil to AI, morality, resource stocks and the future of warfare.
The common thread was pretty simple: a lot of systems that look stable right now probably aren’t.
We started with Yemen and the disruption to oil flows. Doug’s point was that markets still seem strangely relaxed about something that can’t be papered over forever.
“The world runs on oil, and oil is not being shipped the way people expect.”
His response as an investor hasn’t changed much: gold, energy and other real assets. Not because he knows exactly what happens next, but because shortages and political interference eventually show up somewhere.
Then we got into AI.
There’s no question the technology is real. The question is whether the economics are.
Hundreds of billions are being poured into data centers and frontier models, while Chinese models are showing up that may be a little behind but dramatically cheaper.
Doug’s question was the obvious one:
“I don’t see where the return on that capital is.”
If those returns don’t appear, the AI boom could turn into a financial problem very quickly. And once Washington decides these companies are strategically necessary to “beat China,” it’s not hard to imagine bailouts following.
One viewer asked whether it’s wrong to take money from the government if you believe taxation itself is wrong.
My instinct is still not to take it.
You can always justify it by saying, “They took more from me than I’ll ever get back.” That may even be true. But I don’t like the mindset that comes with feeling owed.
Doug brought up Ayn Rand, who collected Social Security because she viewed it as recovering some of her own money.
So there isn’t a clean answer.
But the question led into something more interesting: how do you judge someone’s character?
Doug mentioned an old test Rick Maybury developed to uncover moral tendencies without making it obvious what was being tested.
That might actually be more useful than most personality tests.
As Doug put it:
“Morality is the base of so much. What’s right and what’s wrong? What’s good and what’s evil?”
We also talked about stop losses in junior resource stocks.
Doug doesn’t like automatic stops because these stocks are thin and volatile. You can get taken out on the low tick and watch the stock recover five minutes later.
That doesn’t mean you hold forever.
If something is down badly enough, sometimes you just admit you were wrong and sell it. You can always buy it back.
And finally, drones.
A viewer asked what defeats the modern military drone.
Doug’s answer was basically: another drone, only smaller and cheaper.
Instead of building $30 million machines, the future may be thousands of tiny drones operating together as a swarm.
After that comes nanotechnology.
That’s where things get strange.
Doug described a future where microscopic machines could rearrange matter at the atomic level.
“It’s magic. I mean, total and absolute magic.”
We’re not there yet.
Probably a good thing.
There’s enough happening in the near term.
Listen to the full episode of Doug Casey’s Take for the rest of the conversation.
