We Cost Too Much

I’m going to be real with you this week.

(Not that I’m ever not.)

Here it is…

Human lives cost too much.

My life included. All our lives.

The human life operating expenditure (OPEX) is too high, and in the West, we already know the capital expenditure (CAPEX) is too high as well.

We can’t afford babies anymore in developed countries, they are just a wealth/financial stability flex for the younger generations now.

And you gotta have money to make money.

Oldest saying in the book.

But what if the script had a twist?

A massive reversal.

Get excited, it’s the dystopia.

I’m an optimist in a round about way, over a long enough time horizon the arc of history bends towards good outcomes.

But try saying that to the younger generation.

The government’s recent cynical housing market torpedo is just demographic warfare at scale.

So I’m unsurprised, I’ve long thought that everything is demographics.

In politics, in economics, in business.

And how do you beat the squeeze across all those three fields?

Robots.

Elon just launched Cybercab – a driver-less, steering-wheel free machine.

That’s driving sorted.

What about building a bloody house?

Sure could use more of those here.

We can’t build houses in Australia (or many other places) because labour costs between 30-+50% of the total build costs.

We can’t sponsor immigrants in our construction industry on a means-tested basis (just like white-collar workers) because Housing Minister Clare O’Neil thinks support for that “wouldn’t be in my electorate.”

The construction industry ranks 16^th out of 19 major industries for sponsorship of immigrants – even when the trades make good coin.

Oftentimes more than white-collar which is getting decimated at the junior level by…robots.

But O’Neil has union minders to worry about.

O’Neil’s rhetoric is just her fighting a corner for a dying breed. That means construction workers’ (like white-collar workers’) last shred of relevance…

Maybe in some far-off or in reality, really near-future the CFMEU won’t steal ~$15BN from Victorian state coffers:

Source: AFR

If…

If only we had…

Robots.

Remember a little company called FBR [ASX:FBR]?

We were promised a robot brickie-labourer.

Turns out, FBR was a bit too early to the free labour/brick-laying party.

The ambitions in the robotics field are massive.

I spoke to that ambition last week with these two charts:

Source: Adamas Intelligence

[Click to open in a new window]

That’s rare earth magnet demand – doubling, then doubling again.

Now check out the demand from robotics across Neodymium (Nd) and Dysprosium (Dy):

Source: Minerals (Authors: Heim II and Vander Wal)

[Click to open in a new window]

That’s exponential growth.

So I’m just out here laying little investment bricks for a future that is coming fast as ****.

No robots were involved in the writing of this article.

I promise.

My latest major investment thesis is in the works.

And Elon wants a slice.

Cybercab is just the sharp end of the spear.

First, no more cabbies or Uber drivers. Then no more truck drivers…

More tomorrow…