Investing in Emergent Technology Like AI with Chris Buck
Investing in Emergent Technology Like AI Show Notes
Have you ever heard about new developments or innovations in artificial intelligence (AI), healthcare technology, robotics, or automation, and thought to yourself, “How can I invest in that?” If so, today’s podcast is for you.
For this conversation, I’m joined by Chris Buck. Chris is the Head of Capital Markets and Sales at ROBO Global. He’s a wealth of knowledge in these fields, all of which are very early in their life cycle, and all of which are positioned to achieve massive adoption in the future.
Today, Chris and I discuss his company and the financial products they’re making available to investors, how new technology transforms every industry it touches, and how you can potentially make some of his favorite innovative companies part of your retirement portfolio.
In this podcast interview, you’ll learn:
- How ROBO Global turns what Chris sees as almost a second industrial revolution into opportunities for investors.
- Why this moment is a lot like the dot-com boom in the late 1990s – and how Chris is working to identify winners and losers.
- How Chris is working with a unique combination of academic leaders, business partners, researchers, and investors to create an index for robotics and for healthcare technology.
- “Robotics, automation, and artificial intelligence is going to change the way we live. Much like the industrial revolution, electricity, the steam engine, that automation was going to happen in all sectors moving from the factory floor into our daily lives at an unprecedented rate.” – Chris Buck
- “I think as a consumer, we get used to instantaneous gratification. And there’s going to be a day where we’re probably like, ‘Can you believe I used to have to drive to the grocery store and wait in line to check out behind 15 other people?’ The whole thing has changed.” – Chris Buck
[00:00:08] Dean Barber: Welcome to The Guided Retirement Show. I’m your host, Dean Barber. We have an amazing conversation for you today. Now, of course, The Guided Retirement Show is all about guiding you through all things, getting you to retirement through retirement, and being there side by side with you and all the things you need to think about. Today, we’re going to visit with Chris Buck. Chris Buck is with a company called ROBO Global. I’m going to let him tell a little bit more about ROBO Global, how it was founded, and what they’re doing.
Chris is the Head of Capital Markets and Sales at ROBO Global. He’s got over 25 years of experience in capital markets. And Chris is just a wealth of knowledge, and many of us have thought, okay, artificial intelligence, who are the leaders there? Who should I be buying? How do I get involved and get out on the front edge of this or healthcare technology or even robotics and automation?
All three of these industries, as we’ll hear from Chris, are very early in the life cycle of those businesses and the adoption rate is super low. And when that adoption rate takes off, which it will, there’s going to be a lot of money to potentially be made there. So, take a good listen. Check out the show notes. We got some links to some websites and some information that Chris is going to be talking about today. I hope you enjoy my conversation with Chris Buck.
[00:01:30] Dean Barber: Chris Buck, thank you so much for taking some time to join us here on The Guided Retirement Show. So, let’s begin by you giving a little bit of history about yourself and ROBO Global, what you guys are all about, and we’re going to have a fun conversation. I know that because there are some fascinating things that you guys are doing that a lot of people need to be aware of and I think will want to take advantage of as well.
[00:02:00] Chris Buck: Well, thank you for bringing me on today. And a little bit about myself, I’ve been in kind of on the brokerage side, the sell side, but predominantly, on the research side. And I came to ROBO Global about six years ago when we launched having come from BlackRock iShares. So, I’ve been involved in ETFs and research and investing for about 30 years now.
And ROBO started in 2012, essentially, to address the fundamental investment strategy that there was pretty much strong alignment globally that robotics, automation, and artificial intelligence is going to change the way we live much like the industrial revolution, electricity, the steam engine, that automation was going to happen in all sectors moving from the factory floor into our daily lives at an unprecedented rate, so we built a team to address that for investors.
[00:03:07] Dean Barber: So, tell me about the team. I know that you have your management team. You’ve got your research team. Let’s start with the research team because I think when you start talking about robotics, you start talking about automation. People are saying, “Okay. Well, who’s doing this? Are these brand new companies, like startups? Are they companies that have been in existence for decades?” Who’s the one leading the charge here? And how do you identify the companies that you want to invest in?
I mean, let’s go back to the dot-com phenomenon that took place back in the late 90s and the revolution of how we communicate and what we do and the instant information and the cell phones and all those things were coming along the line and it was moving pretty quick but there are a lot of players that started out there, Chris, that are a distant memory today. I mean, they just kind of vanished into the night. There were a lot of players, a lot of competition but only a few winners. So, is that what your research team is doing is trying to identify who you think are going to be the winners here. Tell us more about that.
[00:04:22] Chris Buck: Now, that’s a really, really good analogy and I think many of us had friends in the business that were a month from going public and they’re going to be worth hundreds of millions of dollars but then the bottom fell out and nobody went public. And a lot of the startup companies literally didn’t have a good investment business model.
And so, what we did is we went to two people predominantly, to begin with, and we created a dedicated team of experts to advise us on here’s a hockey analogy, where’s the puck going? So, we’re a very forward-looking research strategy. And the two guys that really were instrumental in defining the ecosystem, which is the suppliers, the providers, think of the picks and shovels that sell into the products, there was a gentleman by the name of Raff D’Andrea, who’s now head of robotics in Zurich for a university.
He owns a drone company that hopefully will go public soon but he created a company called Kiva Systems, which automated warehouses. He sold that to Amazon Robotics for around 750 million in 2012. So, he, Raff along with Dr. Christiansen, who’s also head of contextual robotics really provided a framework called the ROBO Global classification system, and exactly to your point, we now have seven PhDs, four of which are equity owners. So, for a lot of your investors, when you invest with us, you’re essentially investing alongside the head of MIT, the head of Carnegie Mellon, the head of SRI, the head of Case Western.
[00:06:15] Chris Buck: And they’re really there to help us really evaluate two different things, mainly, technology, who has the best technology or the widest moat around that technology so think of intellectual property, and then also who has market leadership. So, there may be four or five companies that we love but we’ll only going to position in the fund the top two companies and, in some cases, the number one company. An example of that, there’s a company in Japan called FANUC and they literally just make industrial robots. They had a dominant market share. They had the best technology. And they’ve been doing it for over 30 years. So, to your point, the average company in our fund is over 25 years.
[00:07:08] Dean Barber: So, you don’t have companies that are like the ones that the dot-com era where they put the dot-com behind their name and their stock price went through the roof, even though they were losing money. You’re really super focused on where are the opportunities, who are going to be the leaders in the robotics and automation?
[00:07:28] Chris Buck: That’s exactly right. So, we’ve established kind of the ecosystem, which is the widest net. And one way to diversify risk in any kind of investing in disruption, you need to have a process, you need to have a team. And we’re a modified equal weight, which means we’re roughly putting 90 names in our investment strategy and each position’s about a 2% or 1%. So, we’re not taking outsized bets on any one company but what we’ve done is find the best companies in the best industries with the highest revenue, with the best technology, and then equal-weighted them across 12 different geographies and 12 different sectors.
[00:08:14] Dean Barber: Alright. So, let’s talk about what you guys have done because, in the show notes, you’re going to be able to find links to some fact sheets on the different ETFs, how they’re doing, what they’re doing. We’ll also have a link to ROBO Global’s website so you can do a little bit more research and understand a little bit more about what Chris and I are talking about here. So, Chris, you guys are also creating an index for robotics and for healthcare technology. Talk about that because that’s very innovative to actually create the index that is going to be what others are going to have to match to or try to achieve.
[00:08:57] Chris Buck: Well, that’s right. We found seven years ago if you try to push a button and say, “Give me the best companies to invest in with the highest revenue in robotics, automation, and AI,” it just didn’t exist. So, like I said, we had to hire and enlist the best robotic experts to define the universe. And that’s really what we set out to do. And as an example, we’ve had the luxury of watching healthcare is one of our 12 subsectors of ROBO Global and we really became enamored in researching it.
So, we launched another fund called HTEC, which is healthcare technology and innovation, which are really the healthcare companies that are trying to solve disease, preventative medicine. We do a really good job of taking care of the sick. What we don’t do a good enough job of doing is preventing sickness. So, we’ve created a strategy that’s focused on keeping people healthy before you get sick. And so, it’s been a really well-received fund and the returns have been good.
[00:10:03] Dean Barber: Yeah. You can find, again, those fact sheets on both ROBO, which is the automation robotics ETF, and then HTEC right there in the show notes. So, Chris, I think I’ve had clients come to me and say, “Hey, Dean, what about investing in AI? What about investments in artificial intelligence? You know, is that something that’s going to take off and do really well? And if so, who are the companies that we should be looking at when it comes to investing in AI?”
And that’s as difficult of a question for a guy like me to answer as, “Well, what about healthcare, technology, and innovation? What about robotics and automation? Who are the leaders?” And what you’re saying, Chris, is you guys have seven PhDs that are researching this. And then what happens once they do that research?
Does it go to an investment team that makes the ultimate decision or is it a collaboration between the research team and the investment team? How’s that all work?
[00:11:03] Chris Buck: So, really good point. Once our academic and partners lean in and help us understand the technology and market leadership, then our investment team which is internal to ROBO Global were dedicated to this space and literally just robotics, automation, and healthcare technology. We do the classic Wall Street fundamental analysis. So, we take down their income statement. We meet with the C-level execs at every one of our portfolio of companies and we look at the revenue and assign it to one of our sectors.
And the sectors again is the lowest penetration. Let me say the number one, it’s the highest growth opportunity with the smallest penetration rates. So, we’ll find the best companies with the longest runway in those sectors. So, we did classic fundamental analysis. We look at the income statement and we find revenue purity that matches the technology into the sectors that we believe are going to grow the most.
So, for example, some of the companies in AI and then I would caution some of your listeners, AI as an investable theme is very difficult. In the way ROBO Global looks at it, we’re buying the semiconductors and chips. So, some of the names that you probably own or some of your clients may own would be NVIDIA. Qualcomm, Xilinx. There are some companies like Ambarella, which is a video compression chip that technology leadership. They’ve been associated with GoPro. Well, right now Ambarella is focused on autonomous driving, right? You can’t have an autonomous driving robot, for lack of a better word, if it can’t see or sense its surroundings. So, it has to visually see. You have to have machine language in AI processing what it’s seeing, then you have to actuate. And then you have to continually integrate.
[00:13:08] Chris Buck: So, those are really the parts. In the way we look at robotics and automation, you have the applications and the technology. And the technology is just basically seeing, actuating, thinking which are the AI chips. So, to answer your question, the way we found the best way to give clients exposure is invest in the chips that are most actively training AI in the cloud.
[00:13:33] Dean Barber: Okay. Let’s take a quick break. This is The Guided Retirement Show. I’m Dean Barber. We’ll be right back.
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[00:14:56] Chris Buck: Well, right now Ambarella is focused on autonomous driving, right? You can’t have an autonomous driving robot if it can’t see or sense its surroundings. So, it has to visually see. You have to have machine language in AI processing what it sees, then you have to actuate and then you have to continually integrate.
[00:15:29] Dean Barber: We’re back. So, let’s take this out a little bit further. I want to give an example. So, if you’ve got a new car lately, chances are that vehicle has some sort of lane sensors. It’s got a brake sensor so it can just sound alarms, it pulls you back into the lane, or it will stop automatically for you. Is that robotics? Is that artificial intelligence? What is that? And are you investing in the companies that are bringing this to the automobile manufacturers? Because I don’t know but I don’t think it’s automobile manufacturers that are coming up with this technology.
[00:16:09] Chris Buck: Yeah. It’s really the parts makers that are selling into the automotive industry and that’s a really good example. In autonomous driving vehicles, you have level one to level five and level five is fully autonomous. We’re not there yet. 5G will be another accelerant to make that possible but right now, in some cases, we’re at level four and level three. So, some of the sensors like assisted lane changing, that’s exactly what it’s doing.
It’s either Lidar, which is laser reading the lanes or it’s doing a visual like we bought a new car the other day, and there are cameras on the side, in the front, behind it, on top of it, and it’s literally providing a sense of where it is around its environment. So, what happens is the video chip needs to make an inference. And a lot of these video chips are being trained in the cloud like NVIDIA.
So, they’re running millions and millions and millions of simulations to make the chips somewhat smart. So, they’re actually making decisions in addition to our decision. And that’s really what you see in a lot of the cars with a lot of the safety features.
[00:17:23] Dean Barber: So, it’s artificial intelligence then? This is in the vehicle sensor? We already are experiencing that. So, let’s talk about where we are as far as what we do. For people that don’t have a degree in economics and don’t understand the four-stage industry cycle, S curve, you have these stages in this S curve that basically say, “Hey, from a launch of an idea until you get 10% market saturation is going to be X period of time.
Let’s say it’s ten years.” Well, what you’re going to do is you’re going to see that go from 10% to 90% in the same period of time. So, you’ll hit that 10% to 90% in the next 10 years, and then it’ll take another 10 years for the final 10% of people to catch on. The best example I can give about that is my father-in-law saying, “I’ll never have a cell phone. Why don’t anybody get in touch with me, right?”
He was the last 10%. Now, he’s got one and he’s texting and Facetiming and doing all that other stuff at his mid-70s and it’s kind of funny. He gets frustrated with it but he knew that he was no longer going to be able to do without it. Well, where the real money gets made in that second stage, right? It’s when you go from the 10 to the 90. Then you and I were speaking before we started doing this podcast, and I asked you where are we in that S curve cycle? Are we still in that first 10% so there’s great opportunities for people to see some explosion in this industry in the healthcare technology, the robo, and the artificial intelligence? Are we there in all three of those still today you think, Chris?
[00:19:12] Chris Buck: Yeah, absolutely. One of my partners likes to say we’re not in the first inning of the baseball game. We’re in the locker room tying our shoes to get on the field. And what’s different about it and I really like the S curve and the idea of a smartphone. As an example, who would have thought the industry, it’s a multi-billion dollar industry just the apps on our phone. That did not exist 10 years ago, essentially, like that’s a multi-billion dollar market.
And so, what we’re going to see with the performance capability of chips, the cost plunging, and the ability to automate in every sector, and it’s happening now, you’re really going to see new platforms, new growth opportunities, like the smartphone that didn’t exist. We look at a couple of industries that are most likely to be automated, warehouse logistics.
There’s over 17,000 warehouses in the US but only 3% of them are highly automated. Well, you talk a little bit about what Amazon is doing to Whole Foods. Well, now everybody else in customer fulfillment really has to up the game or they’re going to die. So, now it’s gone from a luxury to survival and they have to spend a ton of money to automate.
[00:20:36] Dean Barber: So, we call this disruption, right? So, somebody’s disrupting an industry that’s been around for decades and they’re changing it through the automation.
[00:20:48] Chris Buck: That’s right. And you got to change your diet. So, there are companies like Kroger to combat Whole Foods has joined a sign of contract with a company out of England called Ocado, for your listeners, and they automate customer fulfillment with robots similar to the robots that are being deployed in Amazon. Kroger is going to get into the home delivery, so you don’t have to go to the store but the way they do that, they really need to automate and there’s going to be four or five different customer fulfillment centers in the US are spending $6 billion to become fully digital, fully automated, incorporate AI. You’re not going to have people looking at inventory in stores.
It’s going to be real-time gauging and inferring. If you have a hot summer, maybe they double the order for water. And a lot of this is going to be automated from the supply chain to the store to autonomous driving vehicles to deliver your food directly to your doorstep.
[00:21:56] Dean Barber: So, then what this does, Chris, it sounds to me like it can avoid a massive amount of waste. So, it takes the guesswork out of what kind of inventory do I need to keep in my store and how fast is this going to sell so it’s going to do away with a lot. So, it should help increase profitability pretty much throughout the supply chain then.
[00:22:21] Chris Buck: That’s exactly right. The whole thinking between robotics automation and AI is labor productivity increases. There’s a bunch of embedded drivers of the need for automation. Some of the drivers are the baby boomers. We’re getting older, we’re not working. The millennials are moving in. We have now taken precision agriculture. There may be some investors in Kansas, for example, that may be involved in agriculture. You go to your typical John Deere combine and it’s fully AI.
It’s autonomous driving. It’s adding precision, doses of pesticide. So, it’s saving the farmers from having just to kind of spray the whole field or going plant by plant by plant. This automation is going to change a lot of different industries. So, in the S curve, we’re just at the very beginning of it.
[00:23:24] Dean Barber: It’s pretty exciting to think about that and how this automation, robotics, healthcare technology, it’ll change our world in a meaningful way, much in the same way that the industrial revolution changed the world.
[00:23:41] Chris Buck: That’s exactly right. We think the opportunity really is around a couple of different things. For healthcare, for example, it’s going to lower costs. It’s going to actually help physicians do their job better. If you can imagine an ophthalmologist who’s 70 years old, he may have the most experience in the world but honestly, the dexterity is becoming to fade. So, if you’re doing eye surgery, having a robotic process to aid the experience of the physician actually increases the productivity of the physician. It actually lowers the cost. It improves patient outcomes. So, at the end of the day, our view is a lot of this is going to lower cost and increase productivity and ultimately, have a better experience for people.
[00:24:36] Dean Barber: It’s interesting. I want to go back to the grocery store thing for a minute because it made me think about how frequently my wife used to go to the grocery store, and how infrequently she goes to the grocery store today. And she’s using an app, one of those apps on her smartphone called Instacart. Where you go on to Instacart, you order what you want but you have to have a person that is going to go to the store, pick out your goods, deliver them to you.
I was doing a little bit of research about how Instacart actually makes money and it’s fascinating that they’re doing what we would think about as the ads, the grocery ads that would be in the newspapers and that’s kind of how you clip your coupons and find all that stuff out. The advertisers are now going directly to apps like Instacart. And so, that in a big way is paying for the delivery service.
And, yeah, you get a little bit of a membership fee but it’s really not much more expensive when you think about the money that you’re going to save on gas to get to the grocery store, the time, etcetera. So, that’s another form of automation even though it’s not in the pure form that you’re talking about.
[00:25:47] Chris Buck: Well, I think what you’ll see is the extension of the supply chain. Right now, Instacart prints in the back office and somebody, a stocker, will go populate that bag and deliver it to your wife. Eventually, that will be streamlined all the way back from the warehouse, that there’s been some interesting studies done on fruit. One of the hardest things to do because a lack of labor is to pick fruit in California. So, actually, there’s a company called Abundant Robotics.
It’s private, it’s not a public company, and it’s not in our fund but it literally is an apple-picking robot. Now, you think about it like the funny story about this, it actually happened. The CEO happened to be somebody I played football with in high school. I just noticed his name and called him up through a relationship that we had with one of our advisors and equity owners. And sure enough, he’s created an apple-picking robot. I’m like, “Dan, why would you create an apple-picking robot? I really don’t get it.”
And he said the annual harvest globally for picking apples is about a $40 billion wholesale market every single year and the biggest challenge is picking the apples. So, now you think in the US, the Washington State Orchard Association, if we’re not allowing migrant workers to come in and pick our fruit, you’re going to have huge issues with nobody to pick the fruit. So, we’re actually designing robots and I encourage you to look at Abundant Robotics. They have a video that’s on YouTube. It’s a really interesting, interesting video.
[00:27:23] Dean Barber: That’s interesting. Let’s talk about some of the names that you do own. Let’s start with healthcare, your HTEC. What are some names in there that you own today? And let’s talk about what the company does, why you chose them, and why you think they’re either one of the top two out of your favorites or the top one?
[00:27:43] Chris Buck: Sure. There’s one that’s been very topical as of late that we love. It’s the notion of telemedicine. So, in HTEC, we had nine different subsectors, which again, are the most likely to lower cost, improve efficiency, and it’s more on the prevention of medicine, not pharmaceuticals, not hospitals, not insurance. It’s on the technology side and data analytics. But telemedicine, we believe, is going to be one of the greatest improved client experiences. So, if you can imagine, just like we’re on Zoom today, essentially, you’re Zooming into your medical doctor. There are some diagnosis that they can have and help you whether you have a flu or whether you have a cold. They can diagnose you. They can write the script for amoxicillin and you can pick it up within an hour.
It’s very difficult for people to take off work, sit in a doctor’s office. Sometimes you go to the doctor’s office, you end up getting sick at the doctor’s office because other sick people are there. So, telemedicine in this summer in 2020, we’ve had a 50% increase. Now, there’s a company in our portfolio called Ping An, which is a Chinese company based in Mainland China and they have over 300 million people that daily use telemedicine in Ping An. So, it’s a huge opportunity that’s just going to change the way we engage our doctors.
[00:29:18] Dean Barber: That’s interesting. So, I’ve been using the concierge physician for years and my doctor is all about preventative. And so, I do three times a year check-ins and we do the video conferencing like what we’re talking about here and she’s doing the blood work. If I get sick, I can call her at any point in time or send her a text and within minutes, I’ve got an appointment and the prescription is ready for me to pick up like you said within an hour. It’s amazing. So, this is like taking what I’m getting in the concierge physician world to the masses.
[00:30:00] Chris Buck: That’s exactly what it is. That’s right. It’s going to be for everybody from schoolteacher to factory worker all the way up to corporate executives like yourself.
[00:30:11] Dean Barber: That is amazing. So, why did you pick Teladoc as the company that you want to own in your ETF?
[00:30:22] Chris Buck: So, again, we talked about our reliance on market leadership, and then we look at revenue. It’s literally a pure-play. So, when you build an investment strategy, and you build an index, you want to find the most revenue that’s possible. So, Teladoc it’s just 100% pure play. There are times where someone will say, “Well, hey, Amazon uses AI. How come Amazon’s not in your fund?” Because Amazon is an e-tailer like they would fit in an electronic e-tailing fund, not an AI fund. They use AI, but they’re not…
[00:31:04] Dean Barber: They don’t create it. Yeah.
[00:31:05] Chris Buck: So, it’s really about revenue purity. So, Teladoc, we believe telemedicine is going to change the US and Teladoc is a pure-play in that space.
[00:31:15] Dean Barber: All right. Let’s go to another one that’s in their HTEC ETF, Regeneron.
[00:31:20] Chris Buck: Yeah. So, Regeneron, again, we have nine sectors. Regeneron is in surprisingly or not so surprising, regenerative medicine. So, you’re kind of cutting edge, actually. I mean, if you get in your car, there is a dashboard that will tell you how much gas, tire pressure can help you change lanes but what do we really know about ourselves in our body? We know virtually nothing. It sounds like you’ve gone to a great extent to be self-aware but most people are not.
[00:31:58] Dean Barber: And my whole thought process with that was you know what, you can be as successful as you want. You can have as much money as you want. But if you don’t have your health, well, you don’t have anything, right? And so, we’re very serious about making sure that I understand what’s going on within my body all the time and making sure that I get the right exercise and eat the right things and do the right thing so that I can maintain my health for my children, future grandchildren, all of that. So, yeah, I’m ready. I want to know more about Regeneron now.
[00:32:23] Chris Buck: Yeah. So, really what they do is they’re a company that focuses on literally taking tissue and taking existing tissue and helping it grow and build and replace damaged tissue. So, they’re really using life science in biologics. One of the things that they did is help to solve Ebola. In one way they do that, they go in at the molecular level, understand the DNA sequence, then they can also understand DNA mapping of each individual. And then they’re literally designing targeted therapeutics for the individual or around a very precise disease or issue. And so, they’ve been very good at really understanding using human biologics and actually having it regenerate itself to perhaps help somebody with cystic fibrosis.
It’s really cutting edge. It’s a really unique company. We have a bunch of different companies in regenerative medicine. It’s a 5% weight. Genomics is another great sector. Precision medicine, again, is a great sector. But these are just kind of a sliver of the companies and what you’ll find in both strategies, there’s about 70% of these are mid-cap and small-cap stocks. So, you typically don’t own these names and other funds or growth funds or market-cap weighted funds. So, it’s a way to find the best companies that are disrupting as everything changes and getting when they’re mid-cap and small-cap before they become the size of Amazon.
[00:34:20] Dean Barber: All right. This is fascinating stuff and I think everybody that’s interested in getting into a sector or an industry or something that’s going to change the way that we live early on, this is a great way to do it without having to go out and do all the research yourself, which I think would be very, very difficult for the normal person. Let’s talk about ROBO for a minute. You mentioned before we started the podcast, a company called Ocado Group. Did you speak about Ocado Group already on this podcast?
[00:34:53] Chris Buck: No. Just a little bit but I think it’s a great example of they’re primarily UK based. They really grew their business of being an e-tailer for groceries. The US is a little bit behind where they are in London. Most people jump on an app and their food is delivered to you. And so, what they’ve done is really automate from a software, from a robotic process, the whole supply chain from your Instacart app to the fulfillment center, to the grocery store.
And if you can imagine if 90% of the people are using Instacart, think how efficient that the inventory control can be. So, if you have a customer fulfillment center that’s feeding a five-store location in Kansas City, typically, one store buys more meat around the Kansas City Chiefs than the others, more barbecue and beer deliveries to the other one. So, they can literally manage the inventory better for the store and then automate the whole fulfillment which is software, robotics, trace, track, and control, the whole soup to nuts.
[00:36:12] Dean Barber: Let’s face it, we’re going to eat and if we can get our food delivered and it’s easier and it cuts down the cost, cuts down the waste, that’s going to be a great space to be in.
[00:36:22] Chris Buck: Yeah. I mean, it’s all about the client experience as well. I think as a consumer, we want instantaneous gratification. And there’s going to be a day where we’re probably like, “Can you believe I used to have to drive to the grocery store and wait in line to check out behind 15 other people?” The whole thing has changed.
[00:36:42] Dean Barber: Yeah. Well, it reminds me of when the self-checkout things first came along. It was like people would look at those things and they’d go, “I don’t want to go over there because I don’t really know how to work that thing.” Today, if I do have to run to the store for my wife and that’s where I go. I go right to that self-checkout because I don’t have to wait in line, I just boom, boom, boom, do the Apple Pay and I’m out of there. It’s pretty fascinating. All right. So, let’s wrap this up, Chris, by speaking about your new ETF that you’re going to be launching here in the United States, sometime summertime of 2020. And tell us about that. What’s it doing and why should somebody be taking a look at it?
[00:37:30] Chris Buck: So, again, like ROBO, 10% of ROBO is healthcare, so it really took to healthcare and expanded it out. So, similar, 20% of ROBO is AI, which is mainly the best chips. What we begin to understand is the investment opportunity, as everything becomes digital, as 5G is rolled out, there’s going to be more data that can be interpreted and inferred, and a lot of businesses are going to change for the better. We’re launching a strategy called THNQ. It’s launched in Europe through another partner but the ticker will be THNQ. And predominantly what it is, is we’re going to find the companies that buy, invest, and use the most AI in running their business. We create a factor, if you will, and we’re going to weight it based on the purity of how much they’re investing and using AI to change their business.
So, think of it as almost a second derivative. In ROBO, we’re buying the picks and shovels. We’re not buying the companies like Amazon that are using AI. In the THNQ strategy, it’s going to be more software, it’s going to be more chips, it’s going to be more businesses that are using selling or using and enabling the business model with AI. So, our research staff and our PhDs are really going to think what companies are on the leading edge of incorporating it.
What we see is there’s a lot of private companies that are building smart algorithms and AI machine learning. And now a lot of large companies are going to be buying those private companies and then rolling them out and building new services. So, we want to be on the cutting edge for investors. As those companies emerge and transition from analog to digital, wrapped by AI, we want to be investing alongside those businesses.
[00:39:34] Dean Barber: So, the thought process there, Chris, is that these companies as they do this and as they incorporate more, they’re going to be the leaders in their industry because they’re the ones that are adopting the AI first, and it’s going to create increased efficiencies and increased profitability and the other companies are going to catch up.
[00:39:54] Chris Buck: Yeah. So, again, we’re going to go through market leadership. It’s going to be a similar strategy to ROBO and HTEC but we have an AI factor waiting and we have a couple of fundamental screens. ROBO’s an equal weight. This won’t be as much equal-weighted but we’re not going to take a lot of funds. If you look at them, the top 10 names can be 60%. Very typically, in all of our strategies, the top 10 names will be no more than 18%. So, we’re really giving you a very wide perspective of the best companies.
[00:40:27] Dean Barber: Incredible. This has been a ton of fun, Chris. Thanks for sharing all your expertise. Thanks for what you’re doing there at ROBO Global. Like I said, in the show notes, you’re going to find a link to ROBO Global website as well as fact sheets on HTEC and ROBO and we’ll be looking forward to THNQ coming out soon. I mean, there’s a lot of these companies that I’ve never heard of and I’m sure most people that are listening to our podcast have never heard of either. It could be interesting to even just get in there and look at the names inside of those ETFs and go in and do some research on your own to see what these companies are all about.
[00:41:04] Chris Buck: Yeah. If you have any interest in the holdings, we have two websites. One host our web. Our research is ROBO Global and then for all the holdings and the ETF information, it’s ROBOGlobalETFS.com.
[00:41:19] Dean Barber: ROBOGlobalETFS.com. Super. Chris, thanks for spending some time with us today.
[00:41:24] Chris Buck: Enjoyed it. Thank you so much.
[00:41:26] Dean Barber: Absolutely.
[00:41:27] Chris Buck: Appreciate it.
[00:41:28] Dean Barber: All right. Bye.
[00:41:29] Chris Buck: Bye.
[00:41:29] Dean Barber: Thank you for joining me, Dean Barber, along with Chris Buck, ROBO Global. Hey, I hope you enjoyed that. I thought the information was fascinating. I would love for you to make sure that you subscribe to The Guided Retirement Show. Make sure and share this episode and listen to all my episodes on The Guided Retirement Show. A lot of great information and it’s going to affect the information on all the podcasts are affecting retirees all the way down to kids coming out of college that just want to learn how all this stuff works and how to be more responsible with your money, live a better life, and do all those great things. So, thanks for joining us on The Guided Retirement Show.
Investment advisory service is offered through Modern Wealth Management, an SEC-registered investment advisor.
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Investment advisory services offered through Modern Wealth Management, Inc., an SEC Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.