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NVIDIA, AMD, & the future (and present) of tech

Nvidia and AMD are companies that create graphics cards, processors, and some other components for computers. Graphics cards have come to the forefront of the “Third Industrial Revolution’ because they do the calculations that make machine learning possible. In this context, Nvidia is the gold standard, and AMD is like silver. 

AMD also make CPU, like Intel, with their line of processors called Ryzen. Never heard of it? Does that make it undervalued, or worthless? You’ve probably heard of Nvidia because that’s what’s in your computer if you have an Apple or Windows GPU. In some cases AMD is equivalent in performance, or better. Certainly, many people consider AMD a better value.

All speculations aside about the differences in the difference between the inherent and perceived value of AMD and Nvidia’s components, let’s talk about the vale of what they are making.

Theoretical Underpinnings of Bullish Sentiment for GPU Market

So let’s get specific about why GPUs are important in the economy today. What sorts of products are they necessary for? To understand this, a good example is the screen that you are looking at. Each one of the pixels that you see in front of you has to be controlled, and a graphics card transmits this information as an instruction onto the screen. 

In a graphics card, each core can do a simple calculation, such as controlling a pixel on a screen or performing a mathematical calculation. The beauty and power from these components (GPU) comes from the way that they work together to perform a greater, and often times extremely complex, task. 

This is much different than a CPU. Consider that, at the low end, an Nvidia GPU will have at least a thousand cores. Compare that to the latest highest end Intel $7k CPU, which has only 24 cores. CPU cores can do many more different things than the cores of GPUs, but because GPU cores are more specialized they can be more quickly or efficient, and there can be more of them used by the computer successfully. 

Now that it’s clear what a GPU is, let’s talk about the applications for the hardware. GPUs are necessary for machine learning, augmented reality, virtual reality, gaming (e-sports), and cryptographic calculations (crypto mining). Let’s break down the value a little more.

Artificial Intelligence, Gaming, & AR/VR in the Workplace

How does breaking down the limits of time and space to tell the future sound? What about abating the risks of superbugs like Covid 19 while maintaining close connections. As in, having a group of co-workers in your living room, and being in their living room, while also being on the plant floor. All this happening while cloud infrastructure is pushing gaming powered by the same GPU’s that are making this possible. Therefore, behemoths are spreading the cost of super-powered (and super profitable?) chips across the population and increasing investment into GPUs. Add 5G into the equation and it looks like investment into GPUs will increase, even as the cost to consumer increases, but probably through a subscription service.

What are the risks, though, especially in the short-term? How do we know that these stocks will go up in the short-term, especially in a hyper-globalized JIT world with fragile supply chains. So what if China got a hold on the new corona virus and they’re ramping production back up if the supply chain has kinks in other places in the world with no backup plan. Are supply chains too fallible at the expense of cutting expenses? There are some new risks that need to be integrated into the supply chain from corona virus or other low probability catastrophic events. These are real risks, especially because in Nvidia’s most recent report they state: 

“We do not directly manufacture semiconductors used for our products. Instead, we utilize a fabless manufacturing strategy, whereby we employ world-class suppliers for all phases of the manufacturing process, including wafer fabrication, assembly, testing, and packaging. This strategy uses the expertise of industry-leading suppliers that are certified by the International Organization for Standardization in such areas as fabrication, assembly, quality control and assurance, reliability, and testing. Additionally, we can avoid many of the significant costs and risks associated with owning and operating manufacturing operations. While we may directly procure certain raw materials used in the production of our products, such as substrates and a variety of components, our suppliers are responsible for procurement of the majority of the raw materials used in the production of our products. As a result, we can focus our resources on product design, additional quality assurance, marketing, and customer support.”

Even if demand increases because of the importance of remote work, remote school, increases in game sales (especially subscription services in this area, with consumers iffy about making big purchases with lower income expectations), will Nvidia be able to source the stuff? Will innovation be stifled by the fact that it does not have it’s necessary building blocks; is AR/VR in the workplace too nascent for white-collar workers to realize that it is what they need? Will investors consider the future income from these possibilities, or is that too Silicon Valley-esque, and they have too bad a hangover from the threat of negative interest rates.

Are we in survival mode, or is it time to find real(ly awesome) solutions? Nvidia has exposure to AI, gaming, VR/AR, driverless cars, and bitcoin. I believe that it is a good bet in the corona economy because remote work is more important, and fiat currency may lose value with unemployment insurance in some cases SIGNIFICANTLY exceeding income from jobs. Will employers find automation solutions previously thought too expensive attractive as workers gain market power and demand wages in excess of what seems to be the emergence of a Universal Basic Income?

Will a check from the government, in fact, solidify income expectations, as opposed to the current belief that job loss will shake consumer confidence, resulting in similar or even increased momentum of money? Inflation could be on the horizon, and one place I would rather not be is in cash because inflation obviously devalues cash. Bitcoin may be a good short-term solution, and Nvidia provides that exposure as well because their equipment can be used to mine the cryptocurrency.

Moreover, with most of it’s supply chain in Asia, where governments have a more tyrannic hold, resulting in ability to quarantine citizens under threat of fines or worse, the supply chain may be surprisingly resilient (that’s the important thing: surprise). Supply chains may not be as nimble as previously thought, but supply is not thought to be the problem. Demand is, and governments are taking care of that by putting money in the hands of people out of work with nothing to do but play video games or work on hobby projects. This, however, is where AMD takes the stage.

AMD’s graphics cards are cheaper than Nvidia’s, but have similar or in some cases better performance, especially when it comes to tasks that don’t require perfect calculations, such as gaming computers. For people working on hobby projects with uncertainty about future income, they might choose AMD over Nvidia to cut costs, as they dabble in their garage building that computer that’s been sitting there for years while they trudged to and from work. While Nvidia’s cards are preferred for industrial applications like AI or AR/VR for Microsoft’s HoloLens, hobbyists will prefer AMD’s GPUs and associated CPUs. The bottom line is these people are going to have to do something while they are cooped up in the house, and people love video games.

However, my bet, and I agree with analysts that Nvidia is better positioned to benefit from the Corona economy, is that we are even going to see increased government investment into a way to leverage technology to make remote work less remote. Increasing innovation in the remote work, remote education, remove everything is now a matter of national security. The technology is increasingly here (5G, AI), but the reason to switch has not been evident until we entered the Coronavirus economy.

The company that most stands to benefit from this hype is Nvidia, but AMD may post strong numbers in the face of a shitty economy.

Simplified Issue Life Insurance

Underwriting for Life Insurance - Simplified Issue vs. Fully Underwritten

Life insurance comes in two categories when it comes to underwriting, simplified issue and fully underwritten. When you are meeting with clients as an agent, or looking for life insurance as a customer, it’s important to be knowledgable about this, because it will ultimately determine the application process, the premium, and the amount of coverage you receive. 

When someone goes through the examination process for a fully underwritten product, that information is added to the MIB. Not the Men In Black. Much less fun or cool. 

The MIB is the Medical Information Bureau, and it is where insurance companies share data about customers with each other. It’s like a credit bureau for life insurance. So yes, going fully underwritten can have lasting consequences, but let’s talk about when it will be appropriate, also. First off, though, a background about what underwriting is.

What is Underwriting

As a life insurance agent, when I think of underwriters, I think of gollums in a cave, hair falling out from all the stress. Pale skin that is oily, staring at their computer screens and the Insurer’s general account muttering “my precious” under their breath. 
 
Groups of gollums meeting together before everyday sharing about the way they rejected potential clients, clapping and laughing. Then one suggests accepting someone for coverage and the smiling and laughing stops. “BUT WHAT ABOUT MY PRECIOUS” the other gollums yell at the gollum suggesting coverage. Is this a realistic view of the underwriting process? Probably.
 
As an insurance customer, you should consider that the underwriters exist in order to make sure that the the insurance company makes money. In today’s low interest rate environment, it can be tough for the investments in the general account to make much of a profit without taking on too much risk. 
 
More and more, insurance companies are arbitrarily turning customers down. As an insurance customer, it’s important to consider that giving more information to the insurance company may result in a WORSE rate. Not only at the insurance company that you applied to, but also at other insurance companies. This is because of the MIB, which is a little bit like a credit report for life insurance companies. Fully underwritten products are necessary in some cases though, so let’s talk more about exactly what they are.

What Are Fully Underwritten Products?

Fully underwritten life insurance products are often-times a lengthy drawn out process. It’s the type of insurance where they send a nurse to collect urine, blood pressure, heart rate, and dig into your health records. It can take anywhere from 6 weeks to 6 months. After all that time, they may then deny the application, and then that information goes onto your record that they share with other insurance companies!
 
That doesn’t sound fun at all, especially if your afraid of needles. There are also horror stories where healthy people get turned down for funky readings. For instance, I know someone who got turned down because they took pre-workout before they peed in the cup. Other common reasons for denial are high HBA1C (diabetes), being overweight, lipids out of wack (problematic blood-work), blood or protein in the urine, or cancer history in the family. 
 
So it’s important to take a long hard think before you decide to have insurance companies digging into your health, and poking around your medical records. People still do it, though. Let’s talk about why.

When Should I Pursue a Fully Underwritten Product?

All that truth about underwriting behind us, the truth is that fully underwritten products are absolutely necessary sometimes, especially in the case where someone is needing lots of coverage. In some cases, specifically when you want a TON of coverage, you may have no choice but to go fully or partially underwritten.
 
Another reason to go fully underwritten is if you are a penny pincher and are in good health. In some cases you’ll get more coverage for less. The problem is that we don’t know when those cases are.
 
That being said, the process can take anywhere from 6 weeks to 6 months. That is plenty of time for a client, or you as the customer, to get cold feet, and then you won’t receive the coverage that you need. To be completely honest, nobody wants to save for the future. The potential to save a couple dollars a month or year is in most cases outweighed by the probability that it will result in a higher rate or no coverage at all.
 
Now that you know what fully underwritten products are, and when they’re a good option, let’s talk about the other option, simplified issue: what it is first, and then when it’s a better option for you.

What is Simplified Issue?

Simplified issue is quick. Simplified issue is good coverage. A lot of people go with simplified issue, and there’s a reason for that. If you fit some qualifications, often times you’ll get immediately approved, and rarely does it take longer than 48 hours from application to hear back. Another great thing about simplified issue is that you aren’t providing a lot of health information to the insurance company that might come back to bite you in the butt. 
 
Arguably, the best part about simplified issue is that there is no medical exam. Furthermore, applicants with pre-existing medical conditions can be approved for coverage. More often than not, the company will have the underwriting criteria right there in front of you, so you can make an informed decision about what options are available. This leads us to our final point, which is something we’ve already touched on: when simplified issue is the best option.

When Should I Pursue a Simplified Issue Product?

Simplified issue is great because you will in some cases know immediately whether or not you receive coverage. There are some drawbacks to simplified issue, such as limits to the amount of coverage, but often times you can get multiple smaller policies from different companies. It’s better for people who need a policy more quickly, who want to get coverage but they’ve been denied before for a particular condition that they have.  

Final Points

Now that you know more about the distinction between simplified issue and fully underwritten, you can decide which one is better for you. It’s pretty simple. If you don’t have any pre-existing conditions and are healthy as a horse, young, and aren’t in urgent need of a policy, but want a lot of coverage, fully underwritten may be a better option for you. On the other hand, most people will prefer simplified issue, because it’s easier and less intrusive.
Illustrate purpose of life insurance in picture

Why Do People Buy Life Insurance? (Updated 2020)

Life insurance is purchased for three reasons.

  1. Estate Creation: from the moment you are protected by a policy, the people you care about will be provided for if you pass away.
  2. Estate Preservation: when estate or death tax must be paid, a life insurance policy can be a way to ensure that you don’t have to sell assets harder to turn into cash, such as a house.
  3.  Protection: when a primary income earner passes away, a life insurance policy can be built to provide enough money to pay for the surviving families’ living expenses.

All of these reasons for purchasing a life insurance policy have the common theme of providing money to the beneficiary of the policy. That is exactly what a beneficiary is: the person, or people, who receive the benefit. On the other hand, the policy owner is the person who pays the premiums, and the insured is the person who is protecting the beneficiary.

Typically, the policy owner and the insured are the same person, but they don’t have to be. When the insured passes away, the beneficiary typically receives the death benefit, or the amount of the policy, tax free. There are some exemptions to this rule, as is typically the case with tax laws (sigh…).

Types of Life Insurance

There are two types of life insurance, term and whole. Term life insurance provides protection for a specified period of time. Whole life insurance will provide a benefit (as long as the policy holder decides to keep paying the premiums, or other exemptions don’t apply), and can be paid out to the policy holder if he or she lives to a certain age, typically 121.

Whol Life Insurance

Whole life insurance policies can accumulate a cash value, which typically amounts to the amount paid in excess of the cost of the insurance and the fees. Also, the amount paid is put in an account and gains interest.

Because life insurance premiums are paid with after tax dollars, the amount of premiums paid is not taxable, but the interest can be. It is typically not taxable if paid to the beneficiary upon death of the policy holder, but if the cash value is withdrawn it may be. It also grows tax deferred in the insurance companies “general account”.

Sometimes, the policy owner will take a loan against the death benefit (usually not exceeding the cash value), which would mean that, although they would pay interest on the loan amount, they would not have to pay taxes on the interest upon receiving the money. If you do purchase a policy, all of the specifics will be explained to you so that you understand.

Indexed Life Insurance Policies

A newer option for life insurance is to index the amount paid to the stock market. The cool thing about these sorts of policies is that, although you can gain when the stock market goes up, you are protected if the stock market goes down.

This may be a good option because the economy has historically gone through economic cycles of expansion and contraction, where the stock market goes up and then it goes down. An example of a contraction would be the Great Recession of 2008. The average length of an economic expansion is 58 months, or just under five years. The United States is currently in the longest expansion in history.

If history is to repeat itself, as it usually does, we could be due for an economic contraction, or recession soon. This means it may be a good time to use an indexed financial product such as an indexed annuity of indexed whole life insurance policy.

The Bottom Line

If you are interested in learning more, please contact us! We are also looking to hire. Please see below channels to contact.

Elasticity & Agility on AWS

Value is a Value Prop

Sage Market is about adding value to your business by first applying existing technologies. This article is going to talk about a couple of the value proposition that Amazon Web Service’s technologies offer: agility and elasticity. More importantly it is going to discuss why these value propositions are important. By the time you finish reading this, I hope it will be clear why Sage Market is worth your time.

The plan for Sage Market is to become part of the Amazon Partner Network, among other things. This means Sage Market will be an Amazon affiliate, being knowledgable of the Amazon product catalog and experienced in deploying the solutions. Additionally, it will bring a breadth of knowledge about how to apply technology in other ways to grow and improve the business.

Amazon Products

Amazon Web Services is a suite of tools that allow businesses to take advantage of technology in some important ways. It allows you to serve your customers better because it offers agility and elasticity. Agility means that you can experiment quickly and cheaply. Elasticity means you can scale your business to meet surges in demand that might otherwise cause your system to crash. Let’s talk a little more about what this means, starting with agility.

Agility: Smart R&D

Businesses today face a seemingly insurmountable challenge: innovate or be squashed. You might say to me, “that’s all good and fine, but I’ve been around for 70 years. I have got nothing to worry about. Besides, I couldn’t put people out of work by innovating. That would be heartless.” To this, I shake my head and grimace.
 
Both political parties are growing tired of free trade and globalization, fueled by fear of the masses. They have a secret, though. As populism rises and manufacturing is incentivized in future legislation, state of the art plants will increase production.
 
These plants will, much to the dismay and surprise of the populist movement that hates losing their jobs, use automation and hire a fraction of the workers.

 

There will be new entrants that come into the market and compete with this state of the art capital, even if you don’t. They won’t even have employees that they would lay off with the new technology. They’ll sure have an incentive to automate your manufacturing business cheaply, though.
 
Any incumbent business owner who has benefited from competitive advantage to profit for years should be investigating how the recent tech boom will affect them. If they have even a shade of foresight they will be researching and experimenting with how they can use technological advancement to fend off the future of specialized labor that will be AI.
 
What is the best way to do this? Cheaply and with minimal risk, of course. This is what agility is. It is the ability to experiment with your finger on the pulse of your business, reading and analyzing your data in real time to pivot or embrace whatever it is your are experimenting with.
 
Amazon has tools to optimize this process. Now, agility is important, but how can this be possible? Elasticity and agility are so related it can be confusing to decouple them in the mind.
SAGE logo

Elasticity Universal Truth

Elasticity is being able to react to market activity in real time. It means scaling your activities in direct response to what your customers are doing. This is simply good customer service, but it is also cost effective.

Just as important to the bottom line as increasing sales by being responsive is to minimize costs. It is also great for the environment, so by being responsive to your customer you will save the planet and attract more customers.

Any business savvy individual knows that a dollar saved is a dollar earned. If you are chasing dollars for your business, whether that be for society’s good or to buy a new car to show off to your neighbor, there is no difference between a dollar from cost-cutting or sales-increasing. This is a universal truth.

Get Involved

If you are serious about staying relevant in the changing landscape, it is cheap to get started. I will work with you and create a quote for you and your business for free. If I can’t add value, I would not even think of charging a dime.

Additionally, I am looking for people that are ambitious about applying technology to change the world in a positive way. Sage Market is in it’s infancy, but it has a positive future, just like us. Check out our social media channels, or e-mail us at support@sagemarket.info.

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