Yesterday, my wife and I took on the Adelaide to Melbourne road trip with two girls — aged eight and four. What a nightmare…
Kids just aren’t made to sit still for that long, are they?
While we did our best to keep the iPad at bay, there’s only so much nondescript scenery you can look at. ‘Look at the wheat harvester, kids.’ ‘Yes, it’s all wheat.’ ‘It’s what bread is made out of.’ ‘Just look out the window.’ ‘Twiddle your thumbs.’ ‘Yes, people do live out here.’ ‘Oh, there’s the Big Koala.’
As you can imagine, it was a tough gig. At the risk of sounding like every other generation that has gone before me, what’s up with kids these days?
Seriously, their attention span is abysmal, and the aversion to boredom is worrying. So much so that my wife is targeting boredom as a key goal for the rest of the holidays. It’s only in the grip of boredom when kids start to engage their imagination.
And when they hit that spot, it fires up the brains’ neurons. That’s exactly what you want to see. This is the source of creativity. It literally expands the mind.
So if you’re dealing with bored kids these holidays, good. Just try and tough out the boredom bit and, if you’re lucky, you’ll see the imagination kick in. If not, I don’t know…give them the iPad.
We made a roadside waffle stop during the trip. You may know the place. It’s a couple of hours out of Adelaide, in a little town called Coonalpyn. You drive through it in two minutes. There are no side streets.
In the middle is a little waffle shop manned by Belgians from Liege, churning out quality, well-priced waffles to passers-by. I had one with whipped cream and warm apple. Delicious.
But, back in the car 10 minutes later, the kids were badgering us for more entertainment.
I shouldn’t pick on them, though. They were just being kids. And a few things happened during the holiday that showed me that at the other end of the age spectrum, it wasn’t much better.
I’ll show you what I mean…
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My father-in-law is a ‘very intelligent’ man. Born and raised in Turkey, he moved to Germany and got a couple of university degrees. He became a rocket scientist, and came to Australia to work for the Department of Defence, designing and testing smart bombs out in Maralinga, South Australia.
Before I left for Melbourne, he looked at me seriously and asked, ‘Do you have water?’ I said, ‘Yes, we have a few bottles.’ He said, ‘No, do you have water for the car. I have a lot of experience driving from Turkey to Germany, and you may need water for your car.’
I didn’t say that cars had moved on from the 70s, but I just said we should be right…it’s not rocket science. (I didn’t say that last bit, but I was sorely tempted).
The next example came from my mum, bless her. She kept texting asking how the holiday was. I said, ‘If you had a decent phone I could send you some photos of the girls.’ She responded by telling me they were heading to Telstra to get new phones next week, but that she was scared of smartphones and hates change.
‘Forget death and taxes,’ I said, ‘change is the only constant in life.’ ‘I know,’ she said, ‘but I just don’t like it.’
Seriously folks, you need to embrace change if you’re going to make it through the next 20–30 years.
And when I say that, I’m not just parroting every generation that has gone before me. There’s some seriously heavy stuff going down right now.
And the biggest change is happening in the field of artificial intelligence (AI). I read a few things on it during the Christmas break, and the general view among the scientific community is that, by 2040, computers will be as smart as, or smarter than, humans.
This is not just a statement. This will have profound consequences. For example, consider what ‘run of the mill’ artificial intelligence is already doing to the retail job market in the US. From the Financial Review:
‘As Amazon prepares to expand into Australia to compete against bricks and mortar retailers, the American e-commerce behemoth is destroying traditional retailers in the United States.
‘In the wake of Amazon’s sales dominance during Christmas season, leading US retailers are slashing thousands of jobs, shutting hundreds of stores and suffering plunging share prices.
‘Former top US retail executive Steve Odland told The Australian Financial Review that bricks and mortar retailers were heading for a “slow moving train wreck”.
‘The former Office Depot and AutoZone chief executive said the transformational shift to time-saving and convenient online shopping with Amazon would cause second-tier shopping malls to become “white elephants” and cut the values of commercial real estate.’
Amazon is harnessing various forms of basic AI to take market share from its competitors. It’s not going to stop, in retail or other industries.
There will be massive changes to the job market for the next generation. Whole industries will no longer exist.
If you’ve done your bit and are now retired, be thankful. If you experienced job disruption during your career, you’ll know firsthand what I’m talking about.
If you plan to invest and look after your finances for the next 20 years-plus, you absolutely must understand what’s coming. It won’t happen overnight. But it is happening now, and Amazon’s entry into Australia is evidence of it.
Don’t be like my mother and resist change. Don’t be like my father-in-law and live in the past. Embrace change, and profit from it.
Being aware of it is a good start. More broadly, I would say investing a decent portion of your portfolio in small-caps is a good strategic decision. Smaller companies are generally younger companies. They are better equipped to deal with the huge disruption that will hit many established industries in the years to come.
My mate, and fellow Money Morning editor, Sam Volkering is a small-cap specialist with the advantage of being highly tech literate. He’s been on about the threats and opportunities of AI for years now.
I encourage you to check out his work. His stock picking skills are incredible. You can see for yourself here.
On the question of how can you help your kids (or grandkids) deal with the coming AI revolution, I really don’t know. But I do know that AI will devalue education and knowledge as we know it.
Being creative and having ideas should keep you one step ahead of the robots, though. For that, encourage boredom. Boredom is underrated. If you can cope, go on a long, long drive…and leave the iPad at home.
For Markets and Money
Editor’s Note: This article was originally published in Money Morning.