EIEIO...Winning the Purple Heart
Maps, Margins, and Moola
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CORRECTION: A previous version of this piece misattributed the Trump / Harris positions on education due to human error. The mistake has been corrected.
EIEIO…Fast Facts
Entrepreneurship: 87 – The number of “megadeals” ($100 million-or-more rounds raised by U.S.-based startups) YTD in the Biotech/Healthcare category, compared to 26 in Artificial Intelligence. (Crunchbase News)
Innovation: $26.3 billion – NVIDIA’s data center revenue in Q2 2024, up from $4.3 billion in Q1 2023. (FinChat)
Education: >2x – The amount learned by students who were given access to an AI tutor compared to those who had in-class instruction, according to a study by two Harvard lecturers of 194 Physical Sciences 2 students. (The Harvard Gazette)
Impact: 40.1% – The percentage of people in the US ages 18 and older who have trust in physicians and hospitals in 2024, down from 71.5% in April 2020. (JAMA)
Opportunity: 19,000,000 tons – The amount of lithium that researchers estimate may be contained in Arkansas’ Smackover Formation region, more than enough to meet projected global demand in 2030. (Utility Dive)
“Nothing is more difficult, therefore more precious, than to be able to decide.” – Napoleon Bonaparte
“And if a house is divided against itself, that house cannot stand.” – Jesus Christ
“One love, one heart. Let’s get together and feel all right.” –Bob Marley
In 48 hours, the citizens of the United States will have chosen the next leader of the free world for the 60th time.
After spending $16 billion on the ~160 million people who are expected to vote, or $100/voter, the Real Clear Politics aggregation of all the polls has the election at a virtual tie.
Moreover, the seven “Battleground States” of Georgia, North Carolina, Pennsylvania, Michigan, Wisconsin, Arizona, and Nevada – which the analysts say will determine the election – are all within the margin of error.
I spent last week overseas where I thought I’d escape the constant blizzard of campaign advertising and political chatter. It’s my sense that in the United States, most people don’t want to talk about the election because they are either fatigued or aren’t looking to start a fight. However, where I was, that’s all anyone wanted to talk about.
Why?
Despite not having a vote, the leaders I spoke with yearned to talk about the U.S. election because they believed that having a strong America was important to the world. One senior official of a Middle Eastern government told me that they had done a deep analysis of President Trump and Vice President Harris on the issues that were important to them and created a scorecard to objectively form a perspective on what each candidate would mean for the future.
According to Gallup, not surprisingly, the #1 issue for American voters is the economy, followed by protecting democracy and national security. Immigration was #5, education was #6, abortion was #9, and taxes was #10.
We won’t opine on the aforementioned issues as they are well-covered and outside the scope of this publication. We certainly aren’t going to endorse a candidate…we don’t need half our readers to hate us for something where nobody cares for our opinion in the first place. However, we don’t want to share the fate of the Washington Post which notably lost 200K subscribers for not endorsing a candidate…
Given the focus of EIEIO, we thought it would be a good exercise to summarize where each candidate stood on each pillar of its namesake…Entrepreneurship, Innovation, Education, Impact and Opportunity. Moreover, we thought that using AI to do the analysis would provide a more objective (and potentially less offensive) way to inform perspectives on each position.
This exercise also highlights why completely substituting your brain for AI is not a good idea (at least any time soon). The outsource-to-an-LLM process is often fraught with issues, as anybody who uses it knows.
So, we prompted our favorite super-search app, Perplexity, with the following instructions:
Please compare and contrast Donald Trump and Kamala Harris’ positions on EIEIO…Entrepreneurship, Innovation, Education, Impact and Opportunity.
Here was Perplexity’s response:
Having the opportunity to select our leaders is a cherished privilege we can’t take for granted. While passion runs hot on both sides, the reality is that as a country, we agree on far more things than we disagree on…we just might have different opinions on how to best get there.
My view is that whatever happens on Tuesday, the United States of America’s greatest days are ahead of it. We the people will make sure that happens.
P.S. Here is the RCP Electoral College Map as of 11/3. Your guess is as good as ours!
Market Performance
Market Commentary
While all eyes are on the U.S. Election on Tuesday, Third Quarter Earnings Season is about 70% completed. Thus far, earnings overall have been slightly better than expected with overall growth now looking to be at 5% versus the 4% that has been forecasted.
Big tech names like Microsoft, Apple, Meta, and Alphabet reported mixed results last week. Microsoft and Apple had lower guidance than expected (and Apple experienced a major reduction of ownership by Warren Buffett’s Berkshire Hathaway). Meta signaled that it was going materially ramp up its investment in AI, which also caused some concern. Reddit reported an impressive 68% revenue growth and its first-ever profit.
For the week, the Dow was off a smidge at .1% (and announced NVIDIA was joining the 30 Company Index), the S&P 500 was down 1.4% and the NASDAQ was off 1.5%. Since the October 2022 low, the S&P is up roughly 60%.
Looking ahead, fourth-quarter earnings are expected to accelerate to 9%, and 2025 EPS is forecast to grow 15%.
Relating to the Election, from 1926 until 2023, the market is up 14.8% under a Democrat President and 9.3% under a Republican President. Obviously, many factors contribute to why the market is up or down over a period of time, but the conventional wisdom is the market does better historically under Republican leadership isn’t supported by the data.
We’ve been consistently BULLISH with our thesis that the combination of earnings growth and broader participation by stocks would be oxygen for the market.
Need to Know
READ: How to Spend a Trillion Dollars | Arena Magazine
WATCH: Introducing First Rodeo | 🎙️ Ep 1 · Danny Goldman: Co-Founder & CEO of Mako | Dash Media
LISTEN: Ep 29 · GSV Founder & CEO Michael Moe: AI Completely Transforms Education | Ed on the Edge
GSV’s Four I’s of Investor Sentiment
GSV tracks four primary indicators of investor sentiment: inflows and outflows of mutual funds and ETFs, IPO activity, interest rates, and inflation.
#1: Inflows and Outflows for Mutual Funds & ETFs
#2: IPO Market
#3: Interest Rates
#4: Inflation
Chart of the Week
Maggie Moe’s GSV Weekly Rap
Chuckles of the Week
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Connecting the Dots & EIEIO…
Old MacDonald had a farm, EIEIO. New MacDonald has a Startup….EIEIO: Entrepreneurship, Innovation, Education, Impact and Opportunity. Accordingly, we focus on these key areas of the future.
One of the core goals of GSV is to connect the dots around EIEIO and provide perspective on where things are going and why. If you like this, please forward to your friends. Onward!
Make Your Dash Count!
-MM