History Rhymes: Nvidia & The Great Winfield, “We have all been here before.”
Welcome to the second in the History Rhymes series, where I use the past to illustrate the present and maybe even illuminate the future.
For reasons unknown, the most valuable company in the world is on the road promoting itself. On September 27th, as part of a larger investor presentation, Nvidia threw up a slide designed to answer critics who still might suggest Nvidia’s chips are depreciating quickly. Critics such as yours truly, and others.
The slide, “Nvidia AI Infrastructure Retains Value Beyond Accelerated Depreciation Schedules,” plots the purported retained value of its A100, H100 and B200 chips against a 5-year accelerated depreciation curve.
The implication being values of these Nvidia GPUs across generations are high enough to make the case that companies are OVER-depreciating their chip investments.
Fans of Nvidia responded with joy at this master stroke, finishing off the bears once and for all. One such celebrant, Tae Kim, literally wrote an excellent book on Nvidia, The Nvidia Way: Jensen Huang and the Making of a Tech Giant.
All of this flex almost seems geared toward one critic’s argument which launched a nagging line of inquiry over how fast such chips and their machinery should be written off.
I know this critic very well, humph humph.
He arrived in 1968 amidst applause from Warren Buffett, who heartily recommended the critic’s new book, “The Money Game” in his mid-year partnership letter.
“For a magnificent account of the current financial scene, you should hurry out and get a copy of ‘The Money Game’ by Adam Smith. It is loaded with insights and supreme wit.”
Perhaps nothing this critic Mr. Smith wrote about left a mark on market history like the day he arrived in the Great Winfield’s office earlier that year or late the prior.
The Great Winfield wasted no time and mockingly disparaged the critic for his antiquated views on investing.
“Look at him, framing questions about
depreciation
, about how fast these computers are written off…” declared the Great Winfield. “You can’t make any money with questions like that. They show you’re middle-aged.”
The Great Winfield, you see, is an old friend of the critic’s and not just that but a “tape-reading super-speculator.” He recognizes the best players are not the middle-aged, but rather those “who have not passed their twenty-ninth birthdays.”
“My solution to the current market,” the Great Winfield said, “Kids. This is a kids’ market. This is Billy the Kid, Johnny the Kid, and Sheldon the Kid.”
The three Kids stood up, without taking their eyes from the moving tape, shook hands, and called me “Sir” with respect. “Aren’t they cute?” the Great Winfield asked, “Aren’t they fuzzy? Look at them, like teddy bears. It’s their market. I have taken them on
for the duration
.”
“I give them a little stake, they find the stocks, and we split the profits,” he said. “
Billy the Kid here started with five thousand dollars and has run it up over half a million in the last six months
.”
“Wow!” the critic said, and he asked Billy the Kid how he did it.
“Computer leasing stocks, sir!” he said, like a cadet being quizzed by an upperclassman. “I buy the convertibles, bank them, and buy some more.”
The critic suggested perhaps a lot of borrowing was involved.
“Not too heavily, sir!” said Billy the Kid. “I put up at least three percent cash. When I am conservative, I put up five percent cash...”
Billy the Kid said he was in Leasco Data Processing, and Data Processing and Financial General, and Randolph Computer, and a couple of others I can’t remember, except that they all have “Data Processing” or “Computer” in the title…
“
The need for computers is practically infinite
,” said the Kid. “Leasing has proved the only way to sell them, and computer companies themselves do not have the capital. Therefore, earnings will be up a hundred percent this year, will double next year, and will double again the year after. The surface has barely been scratched.
The rise has scarcely begun
.”
The Great Winfield eyed the critic and said, “I know what he’s going to ask. He’s going to ask what makes a finance company worth fifty times earnings.”
Billy the Kid smiled tolerantly, well aware that the older generation has trouble figuring out the New Math, the New Economics, and the New Market.
The Great Winfield continued.
“This one will really take you back. Sheldon’s Western Oil Shale has gone from three to thirty.”
“Sir!” said Sheldon the Kid. “The Western United States is sitting on a pool of oil five times as big as all the known reserves in the world- shale oil. Technology is coming along fast. When it comes, Equity Oil can earn seven hundred and fifty dollars a share. It’s selling for twenty-four dollars.”
“The first commercial underground nuclear test is coming up. The possibilities are so big no one can comprehend them.”
“Shale oil! Shale oil! said the Great Winfield, “Takes you way back doesn’t it? I bet you can barely remember it.”
The Great Winfield exchange above, plucked from the pages of Adam Smith’s The Money Game, published nearly 60 years ago, proves human nature is more constant across the human experience than just about any other feature.
Below, Billy the Kid’s 1968 pitch against the 2026 tape. Squint away.
