AI and The Shoeshine Boy
“If shoe-shine boys are giving stock tips, then it’s time to get out of the market.” In 1929, the story goes, a shoeshine boy offered investment advice to Joe Kennedy. Instead of following the advice, Kennedy went back to the office and sold off his holdings. When everyone was talking about something, Kennedy assumed it was over.
I think about this story every time somebody talks to me about the wonders of AI, which is daily. If there were shoeshine boys around, I have little doubt that they’d be talking about AI too. The impression that everyone’s talking about it is confirmed by Google Trends, which displays a rapid rise in interest.
Maybe the hype is justified. It is true that AI has developed remarkable abilities. Maybe it will keep getting better and AI stock will keep rising.
But it is also true that AI generates spectacularly stupid output, alongside galactic amounts of tripe. The truly revolutionary developments remain just out of reach – much like a carrot on a stick. And even its most enthusiastic defenders admit that further advances will require extraordinary investments in time, money, and energy.
Judging by Kennedy’s theory, it’s time to get out of the market.
A wise reflection — and perhaps a necessary one. Every surge of collective excitement carries its own shadow. The investments in AI — like the $100 billion Nvidia–OpenAI partnership — show both faith and fragility: faith in progress, and fragility in the vast energy and material costs that sustain it. Whether this wave rises or recedes will depend less on hype than on balance — the balance between innovation and sustainability, between expansion and reflection. The Tao of technology, like all things, follows cycles. When movement becomes excessive, stillness soon returns.
The balance of power between professional and popular opinion is surely variable, and today we seem to live in a world in which popular opinion is more dominant. I think then the key is to ride popular opinion not bet against it. For example, when Musk said he would shortly be making a robotaxi announcement, Tesla rose over 33% even though it was clearly hype. The smart man then is not the one who simply dismisses the hype, it is the one who plays it, e.g. selling instantly when he hears that Musk has postponed the announcement, not before in anticipation of such a postponement, because in that before time the potential for irrational exuberance is limitless.