- ChatGPT: You’ve been replaced
- The buzz surrounding AI (and BuzzFeed)
- Ray Blanco on the value of better bots
- Zach Scheidt: Up is down, down is up
- The pandemic has been canceled… The U.S. electrical grid: Out of shock… And more!
“ChatGPT Does Hour of Reporter’s Work In Seconds,” said a Drudge Report headline last week.
Having spent 20 years in journalism before getting into financial publishing, well, I had to click…
“Henry Williams, a freelance writer from London, thinks ChatGPT, a natural language chatbot powered by artificial intelligence, is going to steal his job,” reports The Sun.
“Williams tested the advanced software by giving it an article topic similar to the one he had been covering: ‘What is payment gateway?’”
The result was impressive… until Williams realized “it had taken ChatGPT roughly 30 seconds to create, for free, an article that I charged £500 [$617] for.”
Well, yeah. If the extent of your “reporting” is to merely rehash information that’s already available online, you’re pretty replaceable.
Anyway, as you’ve probably noticed, it’s hard to get away from headlines about AI and ChatGPT these days — many of them downright insipid…
Launched back on Nov. 30, ChatGPT reached a million registered users in only six days.
It’s “the fastest adopted technology in history,” says Paradigm’s James Altucher, who’s long had a hand in the venture capital space. At the start of this month, ChatGPT’s developer OpenAI was valued at $29 billion.
Your editor will spend part of tomorrow putting the chatbot through its paces while I hand off the issue to Emily. I’ll report back Thursday or Friday.
But — and at the risk of going full curmudgeon on you today — there’s a basic level on which I really don’t give a flying flip about AI.
I’ve spent the last couple of days musing in these virtual pages about how rolling blackouts appear likely to become a fixture of American life soon. AI won’t work very well when there’s no juice.
But it’s not just that. We live in an era when the most basic levels on Maslow’s hierarchy of needs — food, heat, etc. — are the least affordable in decades.
The control freaks and power trippers, having seen how much they got away with during a public health scare in 2020–21, are eagerly looking around for the next crisis to exploit. (It’s a crisis atmosphere that would clear the way for a central bank digital currency.)
And all the while, Western leaders edge ever closer to direct conflict with a nuclear-armed superpower. (If you missed it last week, Germany’s foreign minister said straight-up, “We are fighting a war against Russia.” In case there was any doubt.)
Seen in that light, AI feels like the Kardashians and online sports betting — another pointless distraction in an era that bears too many disturbing similarities to the Weimar Republic.
But… there’s gotta be an investing angle somewhere, right?
To be sure, the buzz surrounding AI probably has something to do with the recent run-up in semiconductor stocks.
The biggest chip ETF — the VanEck Semiconductor ETF (SMH) — is up 16% so far in 2023. That compares with less than 6% for the S&P 500.
“I think investors are being wowed by evidence that AI is ready for prime time,” avers Paradigm’s tech-investing maven Ray Blanco, “and are looking ahead to the fortunes some of these companies will make selling interactive AI software and the hardware it needs to run on.”
But the gains in semis pale in comparison with a media company that simply announced it would use ChatGPT to… write articles.
“One of BuzzFeed’s most popular content styles is its quizzes,” Ray says — “which prompt you to answer a handful of personality questions and then spit out something like what type of tea you are, for example.
“And now, the company has said it would rely on ChatGPT to enhance its quizzes and develop certain personalized content for its audiences.” (Really deep stuff there, right?)
BuzzFeed is publicly traded as BZFD. The news sent shares shooting from less than a buck last Wednesday to nearly $4 by midday Friday. (It’s back to $2.60 as we write today.)
Good on the people lucky enough to hold shares last week. But seriously… does the addition of AI really make BZFD more than twice as valuable today as it was a week ago?
As it happens, the company announced a few days earlier it’s kicking about 12% of the workforce to the curb. “There’s a joke somewhere in there about AI taking our jobs,” Ray says.
In reality, however, “AI has the potential to create many new jobs and improve general efficiency across a variety of industries,” Ray continues.
“As AI systems become more advanced, they can automate repetitive tasks, freeing up human workers to focus on more creative and strategic work.
“Moreover, AI can also create new jobs in fields such as data analysis, machine learning and software engineering.” Examples…
- Health care: “AI-powered systems can assist doctors and nurses in diagnosing and treating patients, allowing them to spend more time providing personalized care. This should ultimately lead to an increase in demand for health care professionals, as well as new job opportunities in the field of AI development and implementation”
- Customer service: “While AI chatbots and virtual assistants can handle simple customer inquiries, a need arises for a specialized human customer service representative that can focus on more complex issues. In addition to focusing on the more complex issues, humans would also be responsible for maintaining and continuously training the AI system.”
So there’s probably something to AI that’s more than just a flash in the pan. The Paradigm Press team will stay on top of the investing possibilities in the weeks and months to come.
And again, I’ll take a whack at ChatGPT myself this week. Have you done so already? Anything you care to impart before I take the plunge? Drop me a line: feedback@5minforecast.com
On this first day of the latest Federal Reserve meeting, the stock market is trying to make up for its losses posted yesterday.
At last check, the Dow is up a quarter percent — just over 33,800. The S&P 500 is up two-thirds of a percent to 4,043. But the tech-intensive Nasdaq is up 1%, back above 11,500.
The Fed’s announcement on interest rates won’t come until tomorrow afternoon, and any real surprises — if any — won’t come until chairman Jerome Powell’s news conference.
In the meantime, earnings season is in full swing: Exxon Mobil posted a record annual profit. Profits at McDonald’s are growing. General Motors’ numbers smashed expectations; GM is up over 8% on the day.
Gold nearly broke below $1,900 overnight but as we write it’s back to $1,927. Silver’s up to $23.71. Crude is stabilizing after its latest tumble, now $78.63.
The January recovery in stocks — the Nasdaq up 10% — is making Paradigm’s value maven Zach Scheidt mighty nervous: “This month has been like a rerun of a terrible movie.
“Specifically the one where speculative tech stocks take off only to come crashing back to Earth once cooler heads prevail.”
Really, the action this month compared with all of last year is uncanny…
“It’s as if the entire investing community made a New Year’s resolution to stop buying quality companies that generate profits and pay dividends,” says Zach. (Can you sense the frustration?)
“Instead, investors are flocking back to the speculative growth stocks that caused them so much pain for the past year and a half.” Carvana is up 180% from its lows last month… Roku is up 43% year-to-date… Tesla has surged 80% in a matter of weeks.
“Are these companies really more valuable now than they were at the beginning of the year?” Zach asks. (Yes, it’s a rhetorical question.)
“The truth is this kind of rebound is fairly normal in a bear market. When the dot-com bubble burst and even during the 2008 financial crisis, there were periods when speculative stocks ramped higher for a few weeks.
“The action sucked in vulnerable investors who wanted to believe the best. But in the end, speculative stocks fell to more reasonable prices and investors who bought the rally were hurt.” And Zach has every expectation history will rhyme…
FYI: Joe Biden’s decision to end the pandemic state of emergency as of May 11 apparently has no bearing on the legal status of the COVID jabs.
As you might be aware, the shots were initially approved under “emergency use authorization” rather than the usual FDA approval process — the result of a decision by the Trump administration in February 2020. Thus, Pfizer and Moderna can’t be sued for money damages over any jab-related injuries unless there is “willful misconduct.”
Evidently that status will not change once the state of emergency is dropped. Kaiser Family Foundation vice president Cynthia Cox appears to have done the deepest research on this question…
Still, the situation is fluid. We’ll stay on top of it…
“The U.S. power grid is stretched to the limit,” a reader writes. “How do I know?
“I worked for the second-largest public power marketing agency in the USA, and was involved in all facets of its operation. I worked on building substations, moving heavy electrical equipment, helping people install 500 kVa transformers, and all that. I also scheduled energy to all 17 exchange customers they had in contractual operations, and sat across from the person who did it for the California market. For what it’s worth, California at that time (mid ’80s) was up to 5,000 kWh short of energy parity then. They are deficit worse now.
“Here is my take: The war on gas stoves will escalate to all forms of liquid fuel, which turns into gas, i.e., propane, butane, et al.
“So we installed an underground 1,000-gallon tank and are awaiting the hookup next week. We already got the 17 kW generator, which can run the furnace and heat pump and keep us cool/warm as needed.
“We are on Georgia Power’s grid supply, in north Georgia — mostly hydro, but we have lost power here four times since we moved in last June — the generator has kept us going every time. Longest was five hours — I believe trees took down a line in all cases, or they had to fix equipment in a substation.”
“I like your 5 Min. Forecast,” a reader writes…
[As always, we know the B-word is coming next]
“… but not every hour of the day. Can you make a link to choose how often we get them? Or simply cut it down to maybe one or two a day?”
The 5: You’ve perplexed us. We send only one issue a day. We usually send a sales message separately, but that too is only once a day unless we’ve got a special campaign going.
Or are you lumping in The 5 with our sister e-letters here at Paradigm? There’s always an unsubscribe link at the bottom — although we think you’d be missing out on a lot if you didn’t get The Daily Reckoning or The Rude Awakening…
Best regards,
Dave Gonigam
The 5 Min. Forecast
