Ask Us Anything: Is AI changing productivity expectations in business? + Are whole body MRIs getting more popular + Wes Maas investing in AI

I'm Adam Schwoll, I'm a dear shiftman and this is the Contrarians with Adam and Adi. And we are back episode 178. Ask us anything where you ask the questions and we will answer them. Ask us questions on Business Big Tech. Whatever floats your boat. Mark question number one. Hi guys, question one this week comes in from Courtney Askiew. Courtney asks, I'd be interested to hear your views on the preventative health screening space. In radiology specifically, do you expect whole body MRIs to become more popular and does broad non-targeted screening without clear clinical questions increase the risk of error and liability for providers? Amazing question Adi, you're the expert doctor on the panel. I'll leave it this one to you. That's a great question and I'll answer in a self hypocritical manner. I'll do split personality answer. So the doctor answer to this would say you shouldn't go and get, so let's talk so whole body MRI, I'll just summarize this very briefly. So it's not an X-ray, it doesn't use like light waves, basically it's agitating particles, magnetic resonance and it gives you an amazing amount of detail to look at slices through the body much higher than a CAT scan CT scan, which does use X-rays. So MRI is the gold standard of all these types of diagnosis? For seeing extreme detail, that's right. So you're going to see all sorts of things when you do an MRI and we should understand that I think probably like when a car comes a Toyota comes off the production line, the Toyota next to it is essentially identical inside to the one that came off before, absolute consistency. The human body is not that at all. There are every one of us has variations on a theme, even if we're so called normal and that could just be weird things anatomically that are unusual but don't have any effect and we never know about. And so what I would have learned in medical school and I think the general disposition of doctors is you shouldn't go and do unnecessary investigations because one is it's a waste of money and time and two is you'll find some of these variations of normal and then you need to decide what to do about them and what you'll probably do about them if you've got the money to do these expensive tests in the first place is you'll go and investigate them further and they'll almost certainly be nothing and the consequences of doing that are that it will cause a very big spike in the healthcare spend and chew up resources and send you on a wild goose chase and maybe you'll even go and start doing things that carry a little bit of risk because lots of things carry a little bit of risk right and so and so that would be the medical view of this type of thing. Now I would love that you let it was my view for a long time but as I've got an older my view is shifted and one of the reasons it's shifted it's especially shifted for my ironically my preparedness to do this stuff to my kids versus myself so there are some things that kill people suddenly there are some things that grow silently and then when you notice them it's too late and they're going to kill you as well and those things you will pick up randomly by one of these screens before you've got any symptoms and sometimes you hear about these stories for example a guy that plays footy, this is a true story, gets a head knock, goes to the hospital, gets an MRI of his head to make sure there's no bleed and they find a brain shim in there in the early stages so they just would not have picked up before symptoms and he ends up having brain surgery and surviving something that would have killed him if always and picked up so you hear those stories they're rare and so the flip side is maybe you do it because you can pick up these things and what I believe is this we are going to increasingly see this is called preventative medicine I'm going to use that to move and I think might not be the right term maybe we can call it pre-emptive medicine but you're going to see an increase in preventative medicine because it's availability is increasing the prices diminishing and also this generation that I always joke about is prepared to do anything to try and live forever like they love this kind of stuff and I think what's more important than saying we should or we shouldn't do it is just like when you make an acquisition for a company you write down before you buy the company what you're expecting from the outcome and what you're going to do in different circumstances I think before you get this pre-emptive MRI you should sit with a doctor or some medical professional and say this is how I'm going to treat different outcomes for example if I get something and people are 95% sure it's a variation of normal and investigating it carries some risk make a decision before it happens about what you're going to do because after you find that you're going to be emotionally influenced by the fact that there's this weird thing but you will find a weird stuff like there's a thing in your brain you can get called an arterio venous malformation that can end up bleeding at some point and it's incredibly rare but how do I feel like I think about it more with regards to my kids because of how paranoid I am about something happening to them than myself I don't really care if I die to be honest I don't say that flippantly like it's not really my problem if I die right like it would be great for the pod but I know that you might have to bring mykin for more commentary but like I don't wonder around thinking I want to live forever I'm terrified of dying like I'd rather not die because it won't be great for the people around me but I am terrified of something happening to my family and so that's more the context than we try to think about it you're going to describe speaking of I would probably consider it I was actually speaking to Mark McConnell our friend yesterday and he's got a review he's invested in an interesting business that can do pancreatic cancer blood markers and they're getting to the point where it's about to be commercialized so something like that well that does he involved in that business yeah I mean you know they've already got that for some other diseases yeah I think that that is and that all if that works and it seems like it does work that will be completely revolutionary because pancreatic cancer basically kills most people because it's found so within a year so that's so I think things like that I'm 100% down for the full body MRI it's the false positive it's obviously that you're talking about that's the that's the concern but that's screening like you're saying blood screening we already do tons of that like when you turn out and how old do I 50 like as in you're not 50 but when one turns 50 I think you do fecal account blood to check for bowel cancer I prefer getting scopes done but there is a risk with the scope by the way I think it's one in a hundred thousand of a bowel perforation so yeah I think adding that to the screening I've got no issue with that because like the consequences of a false positive are that you'll go for an MRI of your abdomen but it's different to and then they'll say yes or no right it's different to an MRI what what what will what will determine whether or not you go for this preemptive MRI probably getting around to it I think I probably will at some point but it's not something I it's not something I wouldn't do it's just something I haven't got around to doing more so more over are you worried about anything or you're just doing it because like I just want to know if there's something in there yeah probably later and have you thought about what you'll do if they say oh this is a bit unusual maybe we should like cut this thing out I guess you'll deal with it when I guess it depends on how how equivocal the ectersergen or doctor is on what it is and what sort of obviously as I'm using a like a pancreatic cancer as an extreme example that's that kills you within a year you want to act on that ASAP versus something that has a 5% we're like an aneurysm for example aneurysm 10 to 1% chance of killing you per year so it comes down to a judgment called you get aneurysm clipped to cause straightaway or do you do you let it sort of continue on like most people or like all treating it like prostate cancer which you may not do anything about if you're 75 because most people end up dying with it anyway so I think it just depends on what the prognosis is I think in the end I'll capitulate and get it done I don't say that I say that a bit shyly as someone who comes out of a medical profession because I know that there'll be people that think that's the wrong advice to be giving people but I feel like this is the problem so now that it's available you've got a choice that's and like before you didn't have a choice you couldn't get the MRI done like no one's going to do like there was not enough machines they've got a choice and so hey going to feel if you're dying of something that you would have picked up I don't if you would have got this MRI scan that is how people are thinking that's how I think right but I do think this obsession with personal health is just another I don't know part of the narcissism that's taken over the world that part of its social media part of it's like just the fixation on self part of it even bleeds into the don't hurt my feelings movement like I think that there is this unbelievable fixation on me me me that exists today and I think this is largely an extension of that as well what about something like I've I've got these done regularly so it's called invertecomas executive health checks you's effort used to do one now there's a few companies that do it where they don't give you an MRI but give you other other a bunch of different tests you do an echo on a on a treadmill you do you get ultrasound you know a bunch of different stuff isn't quite as full on as an MRI what do you feel about that kind of well I tell you that I tell you how that differs every one of those tests that they're doing is looking for something that is correlated to an adverse health outcome it's scientifically correlated so for example an echo that is looking at the anatomy of your heart and so you know that if there's an issue with the anatomy of your heart like do they need to do something about that for example and so when you go on an exercise stress test they know that if you struggle to perform in a particular type of way that is linked to an increased risk of cardiac disease and sudden death so in all cases they're looking for something quite specific and screening you against something quite specific and if you were 25 they wouldn't be getting you to do these things because the data is just not supportive of needing to do that kind of screening I think there is a difference between you know this like preemptive scan which is apropos of nothing I'm just getting older and I'm a bit worried and I want to know what's going on versus as I get older my risk factors for particular diseases are increasing so let's measure correlates to those risks and adverse outcomes to see whether I need intervention I don't see those as the same thing. There in after Michael question number two question two this week from Philip Barryman comes in from LinkedIn is the use of AI changing the expectations of productivity in your business have we seen a tipping point where employees are expected to be using AI in certain areas if so how does this differ between different functions. Thank you Phil. Well we can say yes yes to this question is has AI changed your expectation of efficiency yes do your employees have to use AI yes there's those two questions especially if they're in tech development but even if they're not I mean my god can like if someone is going to work every day and they're not engaging with AI in sensible ways then I want that company to be my competitor like that is unbelievably good news for me and so then it's like how how are different areas how do different areas have different expectations I think you know we have talked about coding a hundred times if you're a developer and you're not using AI then I don't know what you're doing with your life like you better change quickly or I don't know learn how to lay bricks I guess but then this is the other thing that I found I'm going to say something you tell me if you think I'm a maniac for saying this line okay yes okay you mean the previous I think I'm like significantly better at writing than what AI outputs for me so when I ask AI to write something almost always I'm significantly editing that writing myself because I think it sounds clunky and AI ish and also even the what shocks me is the grammatical structure of what's coming out of these large language models is dreadful a lot of the time and so I thought copyrighting would just be wiped out by AI but the copyrighting is pretty bad to be honest yeah I agree I don't think you can use AI for copyrighting yeah it's showing me not writing articles I think it's probably a little bit harsh I think it's definitely suboptimal it just doesn't come out I've tried writing articles with it and it's I think it's good for giving you some ideas yes and it's like it's like it's like another web search I went to to buy recently wrote a couple articles about magazine and I'll use AI to give me some ideas on what to write about but I think it's a very different between and this is why travel writers are such great writers the real travel writers and then the great travel writers that they they can capture the emotion of a destination in a way that AI can never do and when I write such a travel piece I try and incorporate a business element to it and AI can't do that either so I think there's there's it's fine for some elements of copyrighting but generally it's not going to be replacing copy well yeah I think everybody thought copyright has gone day one and it turns out they're not but how bad I just can't believe how straightforward grammar is and how bad the large language models are and like the number of times I'll say I needed just a quick summary for this thing like two lines and something will be produced and my prompt response will be that is dreadful grammar fix the grammar and rewrite that and then it will generally make it better but so I think that's problematic strategy so you are you talking to AI models about strategic thoughts and planning brainstorming with them or not not really I'm using it for my board packs of bits I guess there's an Obama strategy there but I don't love it for that I think it's a bit unintelligent sometimes to all often say I should say there is a danger in feeding your information into a public large language model yeah so you can make your own choices about that but I'll often give a hypothetical to a model that I'm thinking about and I'll change you know like the like I won't I'm sure people are an identifier companies I'm identified but I'll try and give it a hypothetical and then I'll say tell me why this is wrong and then I'll tell it the hypothetical and I'll use that to challenge my thinking now some of the stuff it comes back because this is just a pattern recognition engine ultimately and so it's looking for patterns and it can find deeper patterns than we can find it's got access to much more information and processes in a different way a lot of the time what it comes back as objections are the bit dumb sometimes they're pretty smart and I thought oh that's an interesting way to think about that and so I will use it for a devil's advocate as I'm trying to think through ideas so I will use it like that I think I'm still working out the right way to use it I mean I use it very extensively and I've used it for a long time coding is the most obvious way that it's useful it's also useful for general workflows but it's the more abstract ways it definitely can't abstract think but using it to support you in abstract thinking I think is a really interesting emerging way of using it yeah I think operationally is the obvious one where and I think a lot of people talk about is the thing the AI is the best for is where it's higher repetition low cognitive load so when you've got those kind of roles it's great and we so we use it for our team built a great fraud engine using AI so we're fortunately not a business that gets a lot of fraud because it's pretty hard to fraud a travel experience because you know we've got to rock up at the hotel or the tour so eventually people realize so the only time you can really do is short dated stuff before we get the charge back so you can't really deferred something more than a month because we pick it up before the person travels but it's been great to be able to help wherever you we've had we've had period to have had a lot of fraud and we can just sort of smash that down so they've done a great job as a crating a fraud engine because again patent recognition high repetition low cognitive our chatbot obviously does a great job so we deflect thousands of thousands of tickets with chatbot again high repetition so I think it very much depends on on what we're trying to do obviously our developers use it a lot our product managers can now act as many developers in some way which is which is apparently obviously they aren't developers but they can do a lot more than they used to be able to do so product managers on as developers are all kind of merging into one in some way there's still we still have specialists in each field but they can sort of cross poll and aid across each other so they definitely are element to the business that it's great for and there's elements of business that's terrible for I think we have a much licking copper writing so far which is surprising but the case voice AI still is is challenging I think we thought we'd be a lot further down the line on voice AI certainly for customer service it's not quite there yet and I think anyone's really quite there yet so I think there's a lot of areas that people thought by now we'd have sort of downpat with AI that hasn't been I think the panic in some cases was over a lot and other cases are underwrought clearly it's made developers a lot more efficient there's no question that's been that that's been the highlights so far for us well I think the question to ask yourself oneself whenever you're thinking about using AI is do I think there's a might be a pattern to this that's the question to ask fraud there's certainly a pattern to fraud and like the more data you feed into these things the better they get so fraud is great and then I might say like code so code code is a language every language is entirely pattern based that is a language that's how a language works creating a new novel or creating a painting or an image that's never been done before there's no pattern to that if you're going to create images based on patterns you're going to get some variation of stuff that's already been done whereas if you're like let's say there's a young author who's a brand new style of voice in the way they ride so there's no pattern to that so that's not you that's not something that's naturally intrinsic to AI and I think and so maybe I'd say with business lots and lots of business and economics like economics definitely follows patterns I think we're in the nascent stages of AI as part of like our the economics decision making but I think that should become huge like economics is all patterns and so that to me feels like a huge area of opportunity on that note we'll go to a super quick break back with our last question in a moment and way back question number three Michael final question this week comes in from James frank via email James says long time listener of contrarians thanks for your hard work he also says I'm enjoying the deep dives with the Warren Buffett of Australia aka Scott a question what do you think of Wes Mars and Mars holdings selling off of hard construction assets to invest into AI and electrification first of all is when it corrects something in the question I don't work hard at this broadcast at all thank you James great question just a quick background where's Mars is an AFR rich list of who just a couple weeks ago sold his that's a public list of business all his construction part of the business for 1.7 billion dollars to an international business and he's he's let it this ride on AI investments so that's a it's a really interesting play idea what do you think of Wes's big bet so this is a pretty I mean I I read one AFR article about this and I read it pretty quickly because my eyes were rolling but but basically it's pretty amazing it's an x athlete right whose built this constrict he was a he was a rugby league rugby league player who never quite made sort of the really high level he did play it at an RL level all but it wasn't a star but he obviously had that incredible career as a as a business person though and he went and built some construction business with $15 in his pocket or something and then just built out and it became a two billion dollar business listening to the ASX in 2020 and so it's been a ridiculous career and so whatever I say about this we should start off by saying this guy definitely deserves incredible respect for what he has created with his team in terms of this business and ultimately he got cash for this right well so what happened is so the public listed business was bought by German base global giant Heidelberg family Heidelberg's meant the mask construction business had 1140 staff 40 quarries 20 concrete plants two ash for operations and about half the overall group doesn't solve the whole thing the shares list are issued at two bucks in 2020 and hit almost six dollars last week and then replenish 27% after this announcement he's putting a hundred million dollars into our friends at firmness all of a courtesy business a data had the business all right we'll get to that but he sold it for what almost two billion dollars he sold these assets and he in cash and so he just goes and spends a hundred mil on whatever right and so the only reason the share price can drop that well it could be only two reasons one is people think he sold the asset too cheaply I don't think that's the case or two people are worried he's going to go and burn the $1.9 billion on AI and have nothing to show for it I think also people invested in a construction business not an AI business so you said invest in one thing and now you're getting something completely different and so my view on this is that the long term future of the construction and and property part of AI which is what this guy is basically doing wants to do data centers presumably is that what he's all about was investing in firmness yeah okay so I'm very bearish on the long term of those things and so I don't think this is a good plan based on my bearishness on that I think the biggest shock about all of this is that no one would have expected this to drop 27% when he jumps in and becomes a meme stock I mean he's taken a great construction company sold an asset for a ton of money let's say he sold it for at least as much as it's worth it's pretty incredible to liberate two billion dollars of cash and now he's tried to jump on the meme stock bandwagon and wiped out 20% of the company's value I think that's maybe goes to speak to the fact that Australia has not has not really bought into this that's what kind of what you said a few weeks ago that you don't think Australia is buying into this meme stock thing he is he put it a hundred million firm as I remain a huge bear on firmness but I think it will take a while for that to play out and I think in the short term he's hundred million dollars might be valued up to five hundred million dollars a billion dollars who knows before the chickens come home we've got one point seven six six so that values the business oh my so billion dollars it doesn't actually have any data centers yet so it makes R and look like it looks like actually how to weigh this thing so it's I'm not sure how and somehow firmness has this cooling technology yeah that core weaved yeah which is that's a real I want to use the word business mostly but a real enterprise they have it figured out this cooling technology but somehow firmness has so if that's true then Australia has become the most revolutionary you know tertiary or quaternary industrial player in the world alternative if you believe that I got some short second cell you for $10,000 eight years it's literally zero chances that could be true but you know what every what once in a while everybody ridicules incredible innovation and it turns out to be true I just find it hard to believe it's true in this case and that all these other global players haven't figured out the same thing yeah it's completely un-thinkable it's correct that they've got some revolutionary core technology yeah well I'll tell you it's almost it's 99% implausible one one percent all less could be true less and maybe 0.01% yeah but not zero so where there's life there's hope you know nothing nothing's ever zero but it's a closer zero I was one can possibly get you're bumping right up against the zero the chances of me investing in firmness are zero but I will say this why do you think he has done this do you think it's opportunistic and he's tried to jump on to the main stock stock band regular or do you think he fundamentally believes that this is the future of the world I think it's probably this the latter I think he's just I think he's obviously got some incredible success where it's not sure if there's only a hundred million bucks even like so in the day it's a fraction of what actually sold this part of the business for so and do you know what percentage he owns of that company I think it's 50% all right so he should just pay a one billion dollar dividend out of the one point whatever he sold pocket five hundred million dollars of cash and then who cares like then if you want to invest in that as a public company investor you got this massive dividend and then you can decide if you want to stay and I mean I think the market's voted about whether they want to stay in in in the first instance but like I don't really have a strong view about this I think the guy can do whatever he wants it's his company you can back it or not back it well that's the thing when you when you buy a company that's 50% owned by someone you're taking that found a risk you can get some incredible returns like Wes has generated for his for his investors and you can also be sort of subject to this kind of madness so I think you can you get the good and the bad it's certainly a big bet he's taking is a bet in fairness he's taking on his own dime so you I don't I've got no issue with him doing it it's his right to do it and I don't think investors can sort of throw their hands up in the air because they sort of got what they get it's like someone who invests in set iron complain the share price is down 90% well you kind of made your bed guys times of sleeping or someone invests in Harvey Norman and then they always arguing about Jerry Harvin it's like listen if you don't want it don't buy the stock you know what the deal is he's going to buy all sorts of dearies and this and that because that's what he's going to do and like you can like it or not but no one's holding that I just I cannot believe how much this is starting to feel like the dot com boom starting like it's really it's but I know it's so the this vibe yeah is so reminiscent of the dot com boom I've like there are just these businesses and they don't do anything yet but they're the promise to do something and like you know the words that you can hear if you listen carefully what you can hear is this time it's different and like those are the most dangerous words in English. That's the words of a bubble right? Like we've got a we live in environment where the US market is raining or quiet but not far off the US market hit record highs a couple weeks ago like absolute records you have got unemployment creeping out you've got kids who can't get jobs you got inflation at risk you really got a record market it none of this makes sense you've got tariffs about to smash the market you've got immigration in the US down to zero so you're not going to get you're going to get really GDP growth because there's no one coming in so like you look at all these of these underlying factors and everything points to bad and you look at the markets and it's almost every markets are close to record highs. I feel I've found the whole I've seen this before I find the whole thing terrifying like I'm not sure we'll talk about this on some point but like Australia is in bad shape like this economy in this country is in very bad shape and it doesn't feel like it's in bad shape I look at you Mike you seem pretty happy you got a good stuff I'm about to refer you another client like it feels it feels great but this country is in really bad shape economically and I would say socially as well it's just so what's this company worth by the way? So it's currently worth 1.5 billion it's at a back to levels of a couple years ago how can we worth that if it just sold something for 1.7 billion? That is a very good question that's what the markets are doing. They're probably just getting there suddenly. It hit a higher 581 in January it's now down to 416 but that was a really high high it was very picky so it's only said about level ones. And it's not very different 416 to 581 in the current market I mean I think it's a construction business this is an AI business this isn't a SaaS business it's a business that's on a pay of 20 the pays dividends. I think this is the biggest missed opportunity for this pivot of this business. We are now entering a moment where all of a sudden being capital heavy asset heavy is seen as a huge advantage what I remember that is the the world's been 20 years loving asset light businesses like software we don't have to buy any assets and now all of a sudden AI is freaked people about asset light and the way that people have just the reactionary response that people have is give me asset heavy businesses. There are lots of assets and have lots of their money tied up in working capital and so I mean I think that's ridiculous like I think asset light businesses are always going to be better than asset heavy businesses but like at the moment there's a pivot to asset heavy businesses there's not much more asset heavy than owning quarries like that's pretty asset heavy holds in the ground and so I feel like maybe he has been very smart and said I'm getting a premium for being asset heavy right now I'll be dumping that getting the cash and I'm believing this is the future I don't agree with him on the future but I feel like this might be a lot smarter than people give a credit for. Well I think the sale we're just look the sale was I think beautifully timed you don't pick the top of the market and you say well it was a hundred million bucks investing in this firm as things so even that blows up next week it's still probably a good trade so I think it's hard to be too critical. Yeah I agree with you on that I agree we're in agreement on this. On that note we'll be everyone farewell thank you for listening in as always we'll see everybody on a Tuesday big episode thank you Mark thank you idea see you later.