Tom Gardner

equities, multiples, historical multiples, interest rates.

unemployment, it's bringing in a lot of data points and our formula calculates and we can update that more frequently, but we update it once a month.

And that is basically saying more like 10 and a half to 11% a year.

And the reason that that tool is advancing that

I think my conclusion is that there are two reasons.

One, margins are gonna improve.

If there are companies that have 2,500 employees and that can be done with 250, either a new company's gonna come along and do that or a large company is gonna gradually or suddenly, depending on their cultural approach, reduce their workforce costs and be able to create a lot more.

Vinod Khosla of Khosla Ventures said recently that the marker for Silicon Valley companies is $1 million in revenue per employee, $1 million in revenue per employee.

That's what tech companies have been targeting as they've gotten funding and gone public, $1 million in revenue per employee.

And he said with AI, the new target is $5 to $10 million in revenue per employee.

And that either means that everyone who is in a workplace is going to become five to 10 times more productive

using the tools right away, or that company's gonna reduce its employment by 80%.

The answer is it'll be somewhere in the middle, and those puts and takes across who's willing to use the tools and become a 10X producer and who's not, and therefore is gonna get a performance exit or an exit offer and will exit that workplace, there's gonna be operating and gross operating and net and cash flow margin improvements

that those will translate to higher valuations companies will be a lot more profitable because of that and the second factor is that the margin improvements will come in technology companies that are many of the leaders of the s p 500 so you'll see continued outsized gains by large tech which is already making up a bulk of total market cap in the u.s

And those margin gains will translate to higher valuations, and you'll end up with closer to 10.5% per year.

So anyway, predictions would be somewhere between 8.5% and 10.5%.

And on the one hand, that's not that big a deal.

That's not a big gap.

On the other hand, it is about...

a 30% swing either way per year.