The Financial Times is taking a bold stance on our future with AI.
Its three predictions are:
Unimaginable abundance - you want it, you got it (counterintuitively, this might be the worst outcome for our kids. The traits we want in adults: agency, resilience, the capacity to want something and work for it….don't form in a vacuum).
Modest GDP productivity boost (aka…”meh”)
Terminator Hellscape!
I’ll bet “the over” on human survival
When the Financial Times publishes a chart where two of three scenarios end in utopia or extinction, you have to respect the honesty.
I actually think they’re right to share this ridiculous chart. The range of outcomes from today is absurd.
Anyone pitching certainty about the next decade or two is desperate to sell you something.
So how do you allocate capital when brilliant minds reach polar opposite conclusions?
Lean into “Lindy”.
The Lindy Effect
Lindy says the longer something has existed, the longer the same thing keeps going.
Cash flow from a 100-year-old business has more durability than cash flow from a startup. The Bible will outlast whatever books paid to be on the NY Times bestseller list this week.
For Evergreen, this Lindy theme points to four high income buckets we're leaning into in client portfolios:
Hard assets people have wanted for centuries: energy / energy infrastructure
Real estate debt with senior, collateralized claims at conservative LTV
Ownership stakes in mature asset management firms (GP stakes)
Dividend-paying stocks with toll-booth business models least likely to be replaced by AI (exchanges, payment networks, waste management, healthcare).
Proven assets that kick off a lot of income with moaty business models or de facto monopolies.
We’ll see, but income replacement that requires zero effort from you is probably going to be useful in extreme AI outcomes.
And if our destiny is to sit around holding hands and singing Kumbaya, we’ll have less financial stress waiting for “AI Utopia”.
If the path is bumpier, your cash flow keeps you from being a forced seller at the worst possible time.
And if humanity ends, well… you can stop reading this.
A Simple Investment Framework: CASH FLOW
Predicting AI’s path from hear is damn near impossible. Valuing Trillion dollar LLMs that are burning record amounts of cash is not a cake walk either.
By comparison, investing in boring assets / cash cow businesses is a one foot hurdle.
Might be fun to buy some of the forthcoming Trillion dollar plus IPOs (SpaceX, Anthropic) shares, but it feels better to take those kind of swings when you know you have fresh income checks showing up indefinitely without having to sell down principal.
Brad
