Nvidia and Colonel Sanders

The Paul Truesdell Podcast

The Paul Truesdell Podcast
Episode 330
Tuesday, February 27, 2024 • 42:01

SUMMARY KEYWORDS

Navidia, Ukraine, Russia, China, cryptocurrency, chips, manufacturing, company, investing, graphics cards, gaming, overnight success, founder, family connections, data centers, technology, video, graphics, cell phone games

SPEAKERS
Paul Grant Truesdell, J.D., AIF (The Elder), Paul Grant Truesdell, II (The Younger)

DISCLAIMER
Due to our extensive holdings and our clients, you should assume that we have a position in all companies discussed and that a conflict of interest exists. The information presented is provided for informational purposes only. Truesdell Wealth, Inc. - A Registered Investment Advisor - Florida - 212-433-2525 | Paul Grant Truesdell, J.D., AIF, Founder

00:00
The Paul Truesdell podcast Tuesday, February 27, 2024

Paul Grant Truesdell, J.D., AIF 00:04
we are going to talk a little bit about Nvidia and the evaluation. What's your initial thoughts on it? It's

Paul Truesdell, II 00:11
an amazing i, what, two to three years, if you look at it, it's kind of been obvious that they were going to take this super track, but I don't know, the the hype, to me seems a little bit above reality. And it's not as long term thinking as it should be. But, you know, that's kind of how things go. When you get fads, people are extremely exuberant, about, about things, especially AI and all of them, they are effectively the only major engine that is pushing all of that forward. So you

Paul Grant Truesdell, J.D., AIF 00:45
Well, let's pull back and talk a little bit about just exactly what the who the company is what exactly they do. But I think, because I don't think a lot of people really understand what their processes and procedures are. Let's just let's run through that in terms of invention manufacturing, high end, low end, let's just kind of cover the big broad picture briefly.

Paul Truesdell, II 01:05
Yeah, I mean, so it's valued, like an insane tech company. And basically, they are, they don't manufacture anything, as far as I'm aware. If they do, it's extremely small scale stuff. I think they outsource all manufacturing to a handful of partners.

Paul Grant Truesdell, J.D., AIF 01:24
This so this is a technology company that really is focused in the area of intellectual capacity

Paul Truesdell, II 01:30
develops, its pure design, fair design. Now, granted, they sell a product, but they don't do the actual manufacturing. And if we've learned anything over the past couple of years, with all the talk of chips and everything in the in the media, the thing is the manufacturing, even if you have a good design, that manufacturing is still a really hard part.

Paul Grant Truesdell, J.D., AIF 01:48
And so you have people like a site like Apple, Apple, does the design have the intellectual capacity and capabilities, but the actual manufacturing generally takes place someplace else, it's all outsource

Paul Truesdell, II 02:04
that includes the chips. Yeah, that includes the specialized hardware that includes the actual finished product, they, they don't do any manufacturing, they're purely a effectively designed company that then sells the finished product after the person makes it. And it's kind of like a lot of these, you know, most food brands you buy things from, they do the same thing. They have these large production kitchens and food manufacturing plants that, hey, we developed a product, big company makes it for you, they deliver it to shelves, and you know,

Paul Grant Truesdell, J.D., AIF 02:39
well they're an, the word I would use is they are an aggregator. Sure.

Paul Truesdell, II 02:43
Well, they're designer, I would say, You know what I

Paul Grant Truesdell, J.D., AIF 02:46
was referring to Apple Apple, when it comes to manufacturing and apples are an aggregator they aggregate

Paul Truesdell, II 02:50
a lot of parts together. But anyway, yes, it's very, very, very akin to Apple. I hadn't thought of that. But that is that is exactly right. In that um, you know, unlike the old GE or somebody like that, or any modern car manufacturer, there's not a lot of vertical integration. It's it's outsourced. So yeah,

Paul Grant Truesdell, J.D., AIF 03:10
you know, used to have unformed use always open your door on the rocker panel, if anybody even knows what that is anymore. There used to be say body by Fisher doesn't say that anymore. So there is no more bodies. It's all robotically put together. So the video is really the benefactor of a cultural trend. And I would say the cultural trend that it has benefited from dramatically would be two things. Well, let me say it's three things, social media, gaming, and basically everything in the world becoming technology based. Well, in

Paul Truesdell, II 03:49
particular, they're benefiting right now from insane. Focus on Ay ay ay ay ay ay. And, but it's interesting because you trace their roots back. And you know, if you want to talk about that for a minute,

Paul Grant Truesdell, J.D., AIF 04:05
I do I want to go into their family history and where the founder comes from and how he was an overnight success like Colonel Sanders.

Paul Truesdell, II 04:11
Oh, yeah. Everybody thinks Nvidia is an overnight success. But the reality is, if you've been following the tech industry for any, any any reasonable amount of time, you'll know that Jensen last name Wang, I guess, but Jensen's, everybody knows him.

Paul Grant Truesdell, J.D., AIF 04:28
That's not a T by the way.

Paul Truesdell, II 04:32
He, he is a he is a known entities. He's kind of a charismatic, interesting character. And he in particular, he's he's Taiwanese, and he, I guess, I don't know is he is born in Taiwan came the United States, got his degrees and whatever. And anyway, he ended up being a designer at AMD Advanced Micro Devices. Um, and from there, I guess,

Paul Grant Truesdell, J.D., AIF 05:02
and that's no slouch company? No, well, no. I

Paul Truesdell, II 05:06
mean, they've been around for a long time. And they're basically the only serious competition to Intel for the past, I don't know, 30 years. So you know, he cut his he cut his chops for at least a little bit at what do you call it at AMD. And anyway, you go forward, and he in 93 founded Nvidia. And Nvidia in the first handful of years, as far as I'm aware, I mean, I've there may be some secret history too. But effectively they their idea was at a time when this was not a unknown concept. But it was a trend. And he saw a way to do it different better, whatever is a graphics coprocessor for personal computers. And I think an add on chip that did the graphics processing instead of on a separate, dedicated unit. Yeah,

Paul Grant Truesdell, J.D., AIF 06:02
and I'm gonna give a context of that to everyone who is used to video and audio on the internet. When I was [e-mail]. I remember when we lived in Dunellen, and I had my very first pitcher that came across the internet. And I said to your mother, I said, You got to be kidding me, when the hell puts a pitcher on the internet took like, two hours for the sink to slowly download, you know, is like the movie contact, where all of a sudden, it's uncle a given a speech in this, like, Oh, we got a problem. The our visitors from outer space have got the wrong idea of us. And it's just, you know, how things are developed. So having that graphic interface, a whole different processing system. That's that's critical. And that's a that's been there. That's been our key.

Paul Truesdell, II 06:54
Well, yeah, I mean, that's where they started was ...