All human progress – and stock market gains – boil down to increases in productivity. While sounding a bit dramatic, if you look through history, you’ll see incredibly consistent correlation between productivity breakthroughs (ie. the industrial revolution, the internet) and bursts of prosperity.
Legendary hedge fund manager and technology guru Andy Kessler used this technique to make a fortune for himself and investors a decade ago. Always on the hunt for the next big thing in productivity, Kessler now sees videogames as being on the leading edge of progress today.
This fall, the Chinese National University of Defense Technology announced that it had created the world’s fastest supercomputer, Tianhe-1A, which clocks in at 2.5 petaflops (or 2,500 trillion operations) per second. This is the shape of the world to come—but not in the way you might think.
Powering the Tianhe-1A are some three million processing cores from Nvidia, the Silicon Valley company that has sold hundreds of millions of graphics chips for videogames. That’s right—every time someone fires up a videogame like Call of Duty or World of Warcraft, the state of the art in technology advances. Hug a geek today.
You can read Kessler’s full WSJ op-ed here – where he tells you why the military and central government no longer drives innovation (hint: capital formation is decentralized).
A couple of months ago, I had the privilege to get on the horn with Kessler and get his latest thoughts on technology trends, entrepreneurship, and investing over the next 5 to 10 years. You can catch that interview here.