The AI ​​revolution is here. Should the fund manager be fired?

As the son-in-law of their only daughter, who is now a writer, I was asked to write their invitations. And I gladly took on that obligation.

But little did I know that there wasn’t much overlap between writing about stocks and writing invitations. It’s not as easy as it sounds. In addition, my reputation as a good writer in the eyes of my parents-in-law was at stake.

That’s when I got the idea to outsource this task to ChatGPT. This little AI tool, acclaimed all over the world, was perfect for that.

After all, writing a little invitation would be child’s play for software that could create a whole new crime thriller without breaking a sweat.

Yes, it is. ChatGPT doesn’t just help you edit your book writing. You can even write an entire book. Welcome to the world of artificial intelligence.

So I went back to my duties from my parents-in-law and instructed ChatGPT on the kind of invitations I wanted.

And, voila, a fun little note came out. The note is ready with just a few edits. Needless to say, my parents-in-law were very impressed.

It easily saved me hours of effort. In other words, ChatGPT has made me more productive. It freed up my time for other activities.

Well, these days are in the early days. But there’s no denying that this jewel of software with sophisticated hardware has the exact same impact on people’s lives in all walks of life.

Working faster increases productivity while producing much higher quality output.

There have been many reports of ChatGPT doing multiple things, transforming it into a top quality programmer, editor, and even resume builder with minimal effort.

No wonder professionals around the world call it AI or artificial intelligence. ChatGPT is an example of that, he is one of the greatest inventions in human history.

In fact, Bill Gates, one of the pioneers of the technology revolution, called it as revolutionary as mobile phones and the Internet.

Gates feels that way for good reason. He has been in touch with the team behind his ChatGPT for nearly his 6-7 years and has given the team a formidable challenge in mid-2022.

Train an AI in development to pass the Advanced Placement Biology exam. Be prepared to answer questions for which you are not specifically trained. If the team can achieve this feat, it would be real progress in Bill Gates’ eyes.

Well, the results shocked Bill Gates. He thought the challenge would keep the team hooked for a couple of years. They completed it in just a few months.

AI not only passed the exam, it passed it with flying colors. As a result, Mr. Gates was convinced that something truly revolutionary had arrived.

If you’re still struggling to understand why AI is truly revolutionary, read Bill Gates’ instructions to AI teams again.

Bill Gates wanted his development team to have an AI that could answer untrained questions. The essence of AI is hidden in this one sentence.

You see, the computers we’ve used so far couldn’t think for themselves. Their output was based entirely on a set of instructions or code called in technical terms.

Roughly speaking, no matter how fast and efficient a computer is, it is still a calculator at heart.

But AI is an entirely different creature. It is an intelligence inspired by nature or forms of human intelligence. In other words, they are trying to mimic the human brain.

Just as the human brain can take in tens of thousands of inputs and process them to make decisions, the same is happening inside the machines that power artificial intelligence and AI.

In fact, Bill Gates sums it up nicely in the following paragraph…

For decades, the question has been when computers will outperform humans in areas other than computation. Now, with the advent of machine learning and massive computing power, advanced AI is a reality, and they will improve rapidly.

I’ll say it differently here.

Imagine you need to organize your cupboards and you have the help of a robot. Now a robot with a simple computer program does the same placement every time.

However, it is quite possible that AI-powered robots will take into account the user’s personal preferences when performing the same tasks. That means you’ll be arranging your wife’s cupboard differently than yours.

The same is true when making tea. Traditional robots make the same cup of tea for the whole family, but AI-powered robots, if trained to do so, can serve you masala tea and your wife green tea.

Let me make some rough generalizations here. As you know, computers have evolved from performing computations to learning on very large datasets. This learning is used for reasoning and problem solving, just like us humans.

However, there is no limit to the speed or processing power of the human brain. Therefore, they have proven to be more intelligent and productive.

Now, just like every coin has two sides, artificial intelligence has two sides. It’s not just the benefits and the huge benefits that make the internet and social media buzz. Many experts also talk about the drawbacks and drawbacks that come with it.

Chief among them is the fear of job losses in various industries. We are well aware that software has already eaten up a lot of the workforce that used to do low-level work.

Now, its older brother, artificial intelligence, pursues advanced jobs. As sophistication increases, not many jobs seem safe from the onslaught of AI.

We’ve already seen ChatGPT promise to code better than the best programmers, write stories better than the best novelists, and argue better than the best lawyers. .

In fact, here are some amazing stats. Back in 2013, a University of Oxford study found that 47% of US jobs could be eliminated by AI over the next 20 years.

Now, I usually take such studies with a pinch of salt. But the more we see AI at work and the results it produces, the more real the fear of widespread job replacement becomes.

But what about investing and stock market research? Could AI take the jobs of fund managers, too? Can you make better investment recommendations than the smartest fund manager?

More importantly, should we start looking at it as a real alternative to investment advisors and asset managers?

Well, the very same sort of question was posed to Warren Buffett and Charlie Munger at the recent Berkshire Hathaway shareholder meeting.

Here’s what Munger had to say in response to a question about whether AI technology will have a positive impact on stocks, markets, and society at large:

Walk into BYD’s factory in China and you’ll see robotics advancing at an incredible rate. That means there will be more robots around the world. I’m personally skeptical of some of the hype around artificial intelligence. I think old-fashioned intelligence works pretty well.

Unsurprisingly, his partner Warren Buffett is also skeptical about the impact of AI technology on stocks and the stock market. Oracle of Omaha said AI technology could change everything in the world. But you can’t change the way men think and act.

I think that’s a great observation. Investing is first and foremost about keeping your head when everyone is about to lose their head. It is to be fearful when others are greedy and greedy when others are afraid. It’s also important not to give in to herd mentality and have your own independent opinion backed up by facts and figures.

I don’t think AI technology is in a position to have any meaningful impact on these things, and I don’t think it will be 10 years from now.

Mr. Market is likely to continue to be a moody and capricious person with or without AI. He will continue to have his mood swings. He will continue to occasionally price stocks to reflect overly optimistic or overly pessimistic views.

AI technology could possibly soften stock market volatility. But you know, it can increase even more.

What is certain is that the stock market remains volatile, providing opportunities for smart value investors.

So, in summary, the AI ​​genie is completely out of the bottle. And as an optimist, I believe it will be a net positive for society.

But as far as investment is concerned, AI is unlikely to have a major impact unless it finds a way to alter human genes and, in the process, fundamentally change human behavior.

Until then, keep your fund managers and advisors close at hand and continue to follow sensible investment principles. It should be fine in the long run.