Fake it ‘till you make it  (Artificial intelligence)

ChatGPT is an artificial intelligence (AI) language model developed by OpenAI, based on the GPT-3.5 architecture. It is designed to generate natural language responses to user queries and conversations in a wide range of domains, including general knowledge, entertainment, finance, and more. 

The model is trained on a massive amount of text data, which allows it to generate coherent and contextually relevant responses to user queries. It uses a combination of statistical learning, deep learning, and natural language processing techniques to understand the meaning of user inputs and generate appropriate responses. 

ChatGPT is capable of engaging in a wide range of conversational topics, and can provide answers to factual questions, offer advice and recommendations, engage in small talk, and even generate creative writing such as poetry or fiction. It can also learn from user interactions, which allows it to adapt and improve its responses over time. 

That above introduction is how ChatGPT described itself to me in a recent interview I gave to it. The words “artificial intelligence” is nothing new, but it has taken both popular culture and the investment community by storm in the past 6 months. Artificial Intelligence itself has been employed by Wall Street for many years. I, myself, utilized it as early as 2010, and depending how broadly you define it, far earlier than that. For most in the investment community, Artificial Intelligence (AI) began to take top billing a few months back when Microsoft announced that it was expanding its partnership with OpenAI and incorporating AI into the next version of its Bing search engine. The announcement sparked off a PR arms race between the usual suspects that has not only not faded but actually gained in intensity. I am sure that I don’t have to tell you that the news has helped Microsoft’s stock since the announcement. A solid earnings report on April 25th, which featured lots of AI talk, accelerated the company’s recent rally. Wall Street has now officially set its gaze on all things AI. 

While all this was going down on Wall Street, something was happening on Main Street. You are likely to have heard your kid, grandkid, or even a friend mention ChatGPT. News was quickly circulating that one could use ChatGPT to write a paper or score well on an exam. While some of what you heard may be urban legend, there is certainly some reality behind the growing body of lore. Mainstream media has also tapped into it as a newly discovered source for eye-catching headlines. “Your job may be taken over by AI!” “AI can take the place of a recording artist or a visual artist!” “AI may soon have feelings!!” Come on, you know you have seen them. I have, and they got me thinking. I wanted to see just how great this new-fangled thing was. So, I set up an account and interviewed ChatGPT, and here is what I got. 

The setting 

Nothing special. I sat at my desk in my home office. I didn’t want anyone at work catching me chatting with a robot. I wore comfy clothes in case I needed to run for help. I donned my best reading specs for super-sharp focus, filled up my water bottle, and we got down to it. 

The rules 

There were none. I could ask it any question I wanted to . I did try to keep it germane to this topic. We are, after all, investors. 

The interview 

The introduction paragraph was the answer to my first question, which was: “In 200 words, can you tell me what ChatGPT is?” The following dialogue occurred thereafter. Full disclosure, I may have edited some repetitive stuff to save on space as the chatbot can get rather… well, chatty, and if I say that, you know that it must be so as I am not known for being short-winded. I have taken the liberty of underlining some noteworthy responses.

M: Can you tell me what ChatGPT is best used for? 


As an AI language model, ChatGPT can be used for a variety of purposes, including: 

1. Information and research: ChatGPT can help answer questions and provide information on a wide range of topics, including science, technology, health, finance, and more. 

2. Language translation: ChatGPT can translate text from one language to another, allowing users to communicate more easily across linguistic barriers. 

3. Creative writing: ChatGPT can generate original text, such as poetry, stories, or even news articles, based on prompts or topics provided by users. 

4. Education and training: ChatGPT can be used to develop educational materials, such as quizzes, tutorials, and study guides, or to provide personalized feedback to students. 

5. Customer service: ChatGPT can be used to provide customer support and assistance, answering frequently asked questions and resolving issues in a timely and efficient manner.

Of course, that answer piqued my interest. I wanted to know more about finance… and maybe a poem. First, I had to follow on with some customary queries. 

M: Can you tell me what ChatGPT is not good for? 


While ChatGPT is a powerful tool, there are certain tasks and applications for which it may not be well-suited. Here are some examples of what ChatGPT is not good for: 

1. Critical decision-making: ChatGPT should not be relied on as the sole basis for critical decision-making, such as medical diagnoses, legal advice, or financial planning. While ChatGPT can provide information and insights on a wide range of topics, it is important to consult with a qualified expert who can provide personalized advice based on your individual circumstances. 

2. Emotional support: While ChatGPT can provide empathy and support, it is not a substitute for human interaction or professional counseling. If you are experiencing emotional distress or mental health issues, it is important to seek the help of a trained professional. 

3. Guaranteed accuracy: While ChatGPT is designed to provide accurate and helpful responses, it is not infallible. The quality of its responses may depend on the accuracy and completeness of the input, as well as the limitations of the technology. 

4. Creative authorship: While ChatGPT can generate text, it may not be the best tool for creating truly original and unique works of art or literature. Human creativity and intuition are still critical components of many creative endeavors. 

Ok, I liked the sound of that answer, though I have to admit, it sounds a bit like the legal department got my chatty friend before the interview. What is notable however, is that the chatbot provides the important disclosure that experts should be consulted in important matters such as health or finance. We will get to that “creative authorship” topic later on. But for now, I wanted to press on with the tough questions and see what type of answers the AI would give to some basic financial questions that all of us may be contemplating about right now. 

M: Can you help me make investment decisions? 


As an AI language model, I can provide information and insights to help you make investment decisions. However, please note that any investment decision should be made based on your personal circumstances, goals, risk tolerance, and after doing your own research and consulting with a qualified financial advisor. 

That being said, I can provide information on investment strategies, asset allocation, risk management, and specific investment products. Please let me know what specific information you are looking for and I’ll do my best to assist you. 

I liked how that answer started off. In fact, my regular readers may recognize my almost-verbatim use of similar terms. The last part of the answer warranted some further questions. I wondered, just how prescient this AI was, and I wasn’t going to make it easy. 

M: Is the US going to experience a recession later this year? 


As an AI language model, I cannot predict the future or provide financial or investment advice. However, there are many factors that can impact the US economy, including global economic conditions, monetary and fiscal policy, geopolitical events, and more. Economic indicators and market trends can be useful for gaining insight into the health of the economy, but they cannot provide certainty about future economic conditions. 

That being said, it is worth noting that the US economy has experienced periods of recession in the past, and some experts predict that there may be a recession in the future. However, predicting economic downturns can be difficult, and it is important to remember that investing for the long term and maintaining a diversified portfolio can help reduce the impact of market volatility on your investments. 

Ultimately, it is important to stay informed about economic conditions and market trends, but it is also important to consult with a qualified financial advisor who can help you develop a financial plan that is appropriate for your individual circumstances and investment goals. 

Now, we are talking. No one can predict the future, and if anyone tells you that they can, turn and run the other way. Long-term focus is, indeed, a critical part of creating lasting, generational wealth. I write about this often. Finally, I like the fact the AI continually stresses the importance of selecting investments that are aligned with your individual circumstance. This is often the hardest part of developing a sound investment strategy… the buying and selling stuff is secondary. 

But, of course, it is the buying and selling stuff that EVERYONE wants to know about. Come on, you know you do. Let’s give it a go, shall we? 

M: Can you help me make investment decisions? 


As an AI language model, I can provide information and insights to help you make investment decisions. However, please note that any investment decision should be made based on your personal circumstances, goals, risk tolerance, and after doing your own research and consulting with a qualified financial advisor. 

That being said, I can provide information on investment strategies, asset allocation, risk management, and specific investment products. Please let me know what specific information you are looking for and I’ll do my best to assist you. 

Well, that was about as generic an answer one could get. However, I do like the fact that ChatGPT continues to hammer home the importance of matching risks up with your goals and risk tolerance. I decided to press on and see how far I could get, but perhaps, with a more general question. 

M: Is now a good time to invest in the stock market? 


As an AI language model, I cannot provide specific investment advice, and the decision to invest in the stock market should be based on a number of factors, including your personal financial situation, risk tolerance, investment goals, and time horizon. 

However, it is important to note that investing in the stock market involves risk, and there is no guarantee of returns. The stock market can be volatile, with fluctuations in stock prices influenced by a range of factors, including global economic and political events, interest rates, company earnings, and investor sentiment. 

That being said, many investors believe that the stock market can provide attractive returns over the long term, and historically, the stock market has tended to outperform other types of investments, such as bonds and cash, over long periods of time. 

Ultimately, whether now is a good time to invest in the stock market depends on a range of factors, including your individual circumstances and investment goals, as well as market conditions and economic indicators. It is always a good idea to do your own research and consult with a qualified financial advisor before making any investment decisions. 

Ok, so that is some more generic information, but important, and correct, nonetheless. Let’s focus on the last highlighted statement. ChatGPT hinted about this in its earlier answer to my question on the potential for a recession. We know from research that long term focus provides an important factor in determining success in investing. The long-term return for stock investments… according to ChatGPT, is “around 10% including dividends, when measured by the S&P 500 index.” Of course, we have to define long-term. 

ChatGPT told me that “…long term generally refers to a time horizon of at least five years, and ideally 10 years or more.” There is a practical reason for this. The longer run gives portfolios a chance to recover from inevitable drawdowns. Ultimately, the outperforming years make up for the underperforming ones. 

I wanted to dig even deeper and ask some more specific questions about investing. First, I wanted to start with a simple question, and then I would challenge ChatGPT with some tough ones. 

M: If I am 60 years old and plan to retire in 10 years, should I put my retirement savings in stocks? 


When it comes to investing for retirement, it is important to consider your risk tolerance and investment goals. Generally, as you get closer to retirement age, it may be appropriate to shift some of your investments from stocks to more conservative options, such as bonds or cash, in order to reduce the risk of significant losses in the event of a market downturn. 

However, it is also important to note that you will likely need your retirement savings to last for several decades, so it may still be appropriate to have a portion of your portfolio invested in stocks to help provide growth and keep pace with inflation. 

A common rule of thumb is to subtract your age from 100 to determine the percentage of your portfolio that should be invested in stocks. Based on this rule, at age 60, you might consider having 40% of your portfolio in stocks and 60% in more conservative options. 

That being said, everyone’s situation is unique, and it is important to consult with a qualified financial advisor who can help you determine an appropriate asset allocation based on your individual circumstances, risk tolerance, and investment goals. 

Now ChatGPT gets a grade of A for another generic answer, but there is an important point the AI makes. It is completely true that the closer you get to the time where you will need money, it is important to reduce your risk. We cannot control the ups and downs of the market, but we can control the height of the waves. We would want to minimize the size of those waves as we get closer to, say, retirement, so that if we are in a trough at the time we need the funds, the potential drawdown would be less in a less risky portfolio than a riskier one. Historically, portfolio managers were able to minimize portfolio risk by adding more fixed income, but as we have learned in the past 18 months, bonds can also become volatile… and lose money. That is why it is important to actively manage your portfolio, so that you can adjust to ever-shifting conditions. 

Let’s press on and see if ChatGPT will let us know something we can act on right now to make some money 🚀🚀🚀

M: Will I make money if I buy IBM’s stock? 


I’m sorry, as an AI language model, I cannot predict with certainty whether IBM’s stock will increase or decrease in value in the future. The stock market can be highly unpredictable and subject to a variety of factors such as economic conditions, company performance, and investor sentiment, all of which can influence stock prices. 

Before making any investment decisions, it is important to conduct thorough research and analysis of the company, including its financial statements, management, competitive landscape, and growth prospects. It is also important to consider one’s individual financial goals, risk tolerance, and investment strategy when making investment decisions. It may be helpful to consult with a financial advisor to help assess the potential risks and rewards of investing in IBM’s stock or any other investment opportunity. 

I have to admit, I was nervous about how ChatGPT might answer that question. According to ChatGPT, it has been trained “… on a vast corpus of text data from a variety of sources, including books, articles, and websites.” In reality, we know that ChatGPT is constantly crawling the web for newly available information, and it also hones its knowledge through interactions with users like you and me. It is, at the end of the day, a vast collection of computers which are capable of processing far more information than any human. It would be fair to say that even up against me, a 30+ year veteran of investing and finance, ChatGPT may have one up on me. However, if the web were full of positively or negatively inclined information, it may develop a bias and attempt to regurgitate what it learned. For example, if you grew up in a house which always cut the crusts off the peanut butter and jelly sandwich, you might assume that crustless is the best way. Thankfully, ChatGPT gave the same answer I would give. There is no way to predict a stock’s return with certainty, but we can increase our probability of success by doing careful research and staying on top of our investments. 

At that point, I realized that AI is a very powerful tool, and that I wanted to keep going with the interview, but I could not possibly expect you to read through all the questions I would have for the AI. So, I concluded with a few final questions. 

M: ChatGPT is exciting and growing in popularity, what is next for you? 


As an AI language model, I don’t have personal goals or desires like humans do, as I exist solely to answer questions and generate responses to user queries. However, I can tell you that the field of AI and natural language processing is rapidly advancing, and there are many exciting developments and applications on the horizon. 

One area of focus for researchers and developers is on improving the accuracy and effectiveness of AI language models like myself. This involves refining the algorithms and training data used to develop these models, as well as exploring new techniques such as transfer learning and multi-task learning to improve performance on a wide range of tasks. 

Another area of focus is on developing more sophisticated conversational agents that can engage in more complex and nuanced interactions with humans. This involves advancing techniques such as natural language generation, dialogue management, and emotional intelligence to enable AI models to better understand human language and context, and to respond in a more natural and empathetic manner. 

Overall, the future of AI and natural language processing is very exciting, and I look forward to continuing to evolve and improve to meet the needs of users and the broader community. 

I asked a few questions on how to invest in AI in the stock market which I have included after the conclusion. I had 1 more question to satisfy my curiosity. I have read a number of things about how creative professionals are concerned that AI will make artists obsolete. I remembered that ChatGPT told me in answering my very first question that it could be used to generate poetry. I couldn’t help myself. 

M: Can you write me a poem about the stock market? 


Of course, here is a poem about the stock market: 

In numbers and graphs, the stock market flows 

A place where fortunes are made, and others are closed 

A world of ups and downs, where hope and fear collide 

A place where investors bet, and the market decides 

The bulls charge forward with all their might 

And the bears retreat, filled with fright 

The market’s movements, both subtle and grand 

Dictate the fortunes of every woman and man 

The market’s force is a mighty thing 

A reflection of the hopes and dreams that it brings 

Investors look for the future, they hope to see 

A world of prosperity, where their wealth can be 

The market is a place where risks are taken 

Where fortunes can be won, and dreams awakened 

But in the end, no one can know for sure 

What the market will bring, what it will cure 

So take a chance, and invest your all 

But be wise, and don’t stumble, don’t fall 

For the market is a force to be reckoned with 

A powerful, unpredictable, ever-shifting myth 

I will let you decide if the poem can pass the muster of literary critics. I can tell you, literary license aside, that the work is composed of facts that cannot be disputed. The market does, indeed, decide our fate. Despite all our best intentions and homework, sometimes stocks bend to the will of the markets and we can do very little to fight it. The poem makes sure to relay the fact that the market is errant and that its movements are unpredictable. 


At the end of the day, as you may have gleaned from this interview, AI is, indeed, a very powerful tool, but it is just that. It cannot, in its own words, take the place of an experienced investment professional, and even more importantly, it cannot predict your ultimate success. It does a fantastic job at curating factual information which is readily available in books, articles, and websites and it does a fairly good job at filtering out less-useful information (we refer to this as noise on Wall Street), which can be a good thing if you want to maximize your time… who doesn’t? The AI, or its handlers, are smart enough to remind us that there are no guarantees, the markets can be unpredictable, doing lots of research is important to increase chances for success, balancing risks / goals is absolutely crucial, and that consulting a professional can be a great help. Clearly there are lots of other applications for artificial intelligence and machine learning, and their use spans far beyond the investment field. If you are interested in investing in the future of AI, I took the liberty of asking ChatGPT where to start. 

Those “other” questions 

M: If I want to invest in AI companies, which companies can I buy stock in? 


There are many companies that are involved in the development and implementation of AI technologies. Here are a few examples of companies that you could consider investing in if you are interested in AI: 

1. Alphabet Inc. (GOOGL): Google’s parent company has invested heavily in AI and has made significant strides in areas such as natural language processing and image recognition. 

2. NVIDIA Corporation (NVDA): This company specializes in graphics processing units (GPUs), which are used extensively in AI applications such as deep learning and neural networks. 

3. Amazon.com, Inc. (AMZN): Amazon has made significant investments in AI to improve its e-commerce platform and develop new products such as the Amazon Echo smart speaker. 

4. Microsoft Corporation (MSFT): Microsoft has been working on AI for several years, and its products and services incorporate AI technologies such as machine learning and natural language processing. 

5. IBM Corporation (IBM): IBM has a long history of innovation in the field of AI, and its Watson platform is used extensively in healthcare and other industries. 

6. Intel Corporation (INTC): Intel is a leading manufacturer of computer chips and has been developing AI-specific chips and processors to meet the growing demand for AI hardware. 

7. Baidu, Inc. (BIDU): This Chinese company is a major player in the AI industry and is focused on developing AI-powered products and services in areas such as autonomous vehicles, natural language processing, and more.

M: Is there an ETF that invests in AI opportunities? 


Yes, there are several ETFs (Exchange-Traded Funds) that focus on investing in AI opportunities. Here are a few examples: 

1. Global X Robotics & Artificial Intelligence ETF (BOTZ): This ETF invests in companies that are involved in the development and use of robotics and AI technologies, including companies that manufacture robotics and automation equipment, provide software or hardware for AI applications, or utilize AI to improve their products or services. 

2. iShares Robotics and Artificial Intelligence ETF (IRBO): This ETF tracks an index of global companies involved in the robotics and AI industries, including companies that develop or use AI, robotics, or automation technologies. 

3. Robo Global Artificial Intelligence ETF (THNQ): This ETF invests in companies that are involved in the development and use of AI technologies, including companies that use AI to improve their products or services, develop AI software or hardware, or manufacture AI-enabled products. 

These ETFs can provide investors with exposure to the growing AI market, which is expected to see significant growth in the coming years as more companies adopt AI technologies in their operations. However, it’s important to do your own research and assess the risks before investing in any ETF or other financial instrument. 

In the 1968 film, Stanley Kubrick and Arthur C. Clark imagined a world far in the future, 2001. The antagonist was a computer with a human personality called HAL 9000. In the movie the interviewer asks the protagonist, Dr. David “Dave” Bowman, the following question: 

“In talking to the computer one gets the sense that he is capable of emotional responses. For example, when I asked him about his abilities, I sensed a certain pride in his answer about his accuracy and perfection. Do you believe that HAL has genuine emotions?” 

Dave answers: 

“Well, he acts like he has genuine emotions. Um, of course he’s programmed that way to make it easier for us to talk to him. But as to whether he has real feelings is something I don’t think anyone can truthfully answer.” 

You will have to watch the movie to have that question answered. It doesn’t end well for HAL, Dave, or the crew of Discovery One. 



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