Ed

You don't like it.

Well, I just think they're banks.

You know what I mean?

I got two things to say about that.

One, yes, high fixed costs and human capital costs are part of the reason that bank stocks traditionally trade at something of a discount to the market.

The other reason is that their earnings are very volatile because they're sensitive to the economy and to the stock market.

And that's not going away in the AI world.

That's not going anywhere.

So that factor will keep multiples down.

this world in which AI gets a lot of people fired, maybe a world will be arrive at much more profitable companies in certain sectors, but it's going to be a hairy ride to get there.

So like I was just looking the other day at this bank, Truist, which your listeners may or may not know of, but it's a very large regional bank.

that was built out of a merger of two quite big regional banks, BB&T and SunTrust, five years ago.

The stock's been a dog ever since the merger.

And they did fire the people.

They had something like 58,000 employees as two independent companies, and now they got 38,000, and they got more assets.

So mission accomplished on firing people, not by AI, but by doing a merger.

right?

But you hear the war stories about what it was like getting from point A to point B, the culture clash, the people who leave because they're pissed off at everybody, the, the Sturm and Drang, right?

You know, if you, if the thesis is banks are going to fire a third of their people, like, is it going to be fun to be at those banks while that's happening?

And if the people inside the institution are afraid for their lives, do you really want to own it while that is happening?