(Weekly Summary) AI puts the Don Draper lifestyle in its sights

VaselineAugust 26, 2024

0 4 minutes read

(Weekly Summary) AI puts the Don Draper lifestyle in its sights

His “wife” may come back, but the “commercial shuttle” certainly won’t. This is bad news for owners of commercial skyscrapers and other office buildings.

The growth of artificial intelligence is even worse news for business owners.

A “professional wife,” short for “traditional wife,” is a woman who embraces traditional gender roles. She stays at home to raise the kids, cook sit-down meals, and keep the house tidy while her husband focuses on bringing Shunya home.

For those of a certain generation, think: June Cleaver from Leave it to Beaver. Or, in the last decade, Betty Draper of mad men.

Thanks to these influencers, the maid lifestyle has gained renewed popularity in recent years. However, Don Draper’s – or commuters – are far and few between.

Suburban commuters are becoming a relic…as recent data from Metro-North Railroad in the New York region makes abundantly clear. The total number of passengers on these commuter rail lines is barely higher than it was in 1990 and 30% below peak levels in 2019. A sharp decline in “switching tickets,” such as monthly passes, explains most of the decline.

Commuter fares accounted for just 31 percent of total ridership last year, half of what it was in 1990. Discretionary one-way fares fill some of the gap, but as Metro-North management explains…

Many riders use … non-commuter or discretionary tickets for work travel due to hybrid schedules that (do not require) daily commuting to offices. As a result, ticket buying has shifted from commuting tickets to these media.

Commuter trends in New York are not unique. They are representative of similar trends from coast to coast, which is why vacancy rates in many large urban centers are well above the national average. Take a look at the chart below…

The growing trend of working from home has been affecting office demand for several years now. AI adds even more downward pressure on this demand by eliminating jobs up and down the food chain.

According to one Forbes article, “The State of Hybrid Workspaces in 2024,” 12.7 percent of full-time employees now work from home, while 28.2 percent use a hybrid model that includes both home and office work. Both percentages are growing rapidly.

Unsurprisingly, Colliers’ US office market year-end 2023 report makes grim reading. The report states…

The US office market now has 233.3 million square feet of space available for sublease, significantly higher than the previous cycle peak of 133.3 million square feet in Q2 2009… lenders will remain active with expansions of extended and claimed loans, but with $2.8 trillion in loans across all asset classes coming due by 2028… difficulties will mount.

Colliers also reports that the national average vacancy rate for central business districts (CBDs) has risen to a record high, as the chart below shows.

Surprisingly, the vacancy rate for Class A properties in the city center is now higher than the vacancy rate for suburban office properties. This data point is consistent with the fact that an increasing number of employees work closer to their homes, if they commute to an office.

So while the “service wife” may be back, the “commercial shuttle” is definitely not. And while urban office properties still serve a purpose in the modern economy, they are now in the crosshairs of the AI megatrend.

And since the megatrend is only accelerating, it’s essential to prepare for the inevitable disruption…which is exactly what we covered in Road to the AGI Summit last thursday

In that presentation, I also provided a “future” model and revealed the name of my #1 stock idea for The road to AGI. In case you missed it, click here to watch a replay.

Now, let’s take a look back at what we covered here Smart money last week…

Smart money Elevate

How AI Could Lead to the ‘Death of the Spirit’

The road to AGI raises crucial questions about our future. In this special guest issue, InvestorPlace Digest editor Jeff Remsburg draws parallels between John B. Calhoun’s utopian mouse experiments and artificial general intelligence (AGI) potential impact on the human race. Curious about the implications? Read more about the possible effects of AGI here.

The Road to AGI Dangers (and How to Avoid Them)

The rapid advancement of AI offers unique investment opportunities. While more short-term gains may come from direct investment in AI technologies, Eric believes the most promising long-term strategy is obscure. As AI matures, it will disrupt technology-centric businesses. Thus, investing in industries that AI cannot replace may be one of the best ways to prepare for AGI. Click here to learn more about these ‘up and coming’ sectors.

Take these steps before technology becomes mentally superior to us

Here at Smart moneywe often dive into global macro trends and cycles, from healthcare to precious metals. Understanding these patterns not only provides insight into where we’ve come from and how we’ve evolved, but can also help investors better anticipate what might come next. But what happens when we’re faced with something no one has seen before—a disruptive force that has no clear historical precedent? Click here to find out.

The “unpopular” stock that can beat the pants off Nvidia

A certain tech giant has been making headlines recently…albeit of the wrong kind. However, because I believe this well-known company will use AGI to create some possible new avenues of success, I expect its unpopular stock to outweigh Nvidia’s wildly popular one. Read on to find out why I’m not giving up on this leader just yet.

Elon Musk’s AI startup xAI is pushing the boundaries of technology. With the rapid pace of AI advances, Musk estimates that we could be living in an AGI world in just 24 months. And with xAI’s investment opportunities, the startup has the potential to be at the forefront of this revolution. In Sunday’s special guest count, Luke Lango tells us about xAI and how this business could shape your portfolio. Read all about it here.

I can’t wait

We are officially on its way The road to the AGI Summitbut that doesn’t mean the journey is over. In fact, it’s just getting started. For investors, this means new opportunities on the horizon as the AI landscape evolves.

We weren’t able to get to all of your questions during the event, but I didn’t want to leave out the most pressing of those questions.

So keep an eye on your inbox because I’ll be replying to the most important ones Road to AGI questions later this week.

Stay tuned.

Sincerely,

Eric Fry