Be careful of AI investing hype

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ThankYouJack
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Re: Be careful of AI investing hype

Post by ThankYouJack »

nisiprius wrote: Mon Jun 05, 2023 8:05 am
Today's Washington Post reports what I should have guessed.

[url=https://www.washingtonpost.com/technolo ... y-outlook/]
In San Francisco, it’s suddenly impossible to escape the AI hysteria. In bars and restaurants, people are conversing about using ChatGPT and whether AI will take their jobs — or take over the world....
So Silicon Valley desperately wants large language models to be The New Big Thing.

The point is that as investors we should resist the temptation to do anything in particular. I think it's a bubble.
[/quote]

I have a friend in San Francisco who is a very successful entrepreneur. One of the things he loves about the city is this exact "entrepreneurial buzz" when going into coffee shops, bars, restaurants. So a journalist may call it "hysteria" but it seems pretty common there.

There's also a lot of "buzz" on Bogleheads about AI. But I wonder if many on here are more pessimistic, confused or fearful about the technology. Who knows if it's a bubble but I can't think of a good reason for anyone to root against innovation and entrepreneurship coming out of the Bay Area.
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Re: Be careful of AI investing hype

Post by adave »

To the successful stock pickers…. Forget about ur NVDA pick what are your best picks going forward today? Curious…..
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CyclingDuo
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Re: Be careful of AI investing hype

Post by CyclingDuo »

adave wrote: Wed Jun 07, 2023 8:42 am To the successful stock pickers…. Forget about ur NVDA pick what are your best picks going forward today? Curious…..
Buy the haystack...

Goldman: S&P 500 is undervalued because of the AI boom
https://finance.yahoo.com/news/goldman- ... 16152.html
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Yarlonkol12
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Re: Be careful of AI investing hype

Post by Yarlonkol12 »

Is the average investor actually buying into this latest hype stock pump? I thought it was just big money this time around.

I know that the last few crypto hype cycles seemed to pull in most average investors, and the meme stock frenzy of 2020/2021, but I didn't think the average joe was being fooled to buy into the "AI" hype cycle
Last edited by Yarlonkol12 on Wed Jun 07, 2023 9:03 am, edited 1 time in total.
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Re: Be careful of AI investing hype

Post by hppycamper »

HanSolo wrote: Wed Jun 07, 2023 1:37 am
APX32 wrote: Wed Jun 07, 2023 12:29 am Any gains you capture as part of owning a tiny percentage of NVDA in an index is not even remotely comparable to having bought 500 shares of it in the $60s a couple of years ago and sold last week at $400. I’ve been fortunate enough to have hit a few home runs with individual stocks in the past few years and they trounce the Boglehead portion of my portfolio.
BogleFan510 wrote: Wed Jun 07, 2023 12:53 am If anyone keeps records the one year I participated of the hedge fund context one might note I recommended NVDA when it was roughly $3-4/share when I bought it. We should make that more than a one year thing as short term picks are too hard (one can’t predict when the market will recognize good strategies with sustainable and protectable value propositions).
I'm content to sit out the stock-picking... but you may be making Cathie Wood envious right about now! Cheers...
Although couldn't compare to BogleFan510, happy that I bought NVIDIA in 4Q 2018 at $40 per share in my Roth IRA. Sold some shares at $411 per share that total to the initial investment + gains had I invested the initial investment in VTI back then. Holding the rest of NVDA shares.
:sharebeer
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Re: Be careful of AI investing hype

Post by rockstar »

hppycamper wrote: Wed Jun 07, 2023 9:03 am
HanSolo wrote: Wed Jun 07, 2023 1:37 am
APX32 wrote: Wed Jun 07, 2023 12:29 am Any gains you capture as part of owning a tiny percentage of NVDA in an index is not even remotely comparable to having bought 500 shares of it in the $60s a couple of years ago and sold last week at $400. I’ve been fortunate enough to have hit a few home runs with individual stocks in the past few years and they trounce the Boglehead portion of my portfolio.
BogleFan510 wrote: Wed Jun 07, 2023 12:53 am If anyone keeps records the one year I participated of the hedge fund context one might note I recommended NVDA when it was roughly $3-4/share when I bought it. We should make that more than a one year thing as short term picks are too hard (one can’t predict when the market will recognize good strategies with sustainable and protectable value propositions).
I'm content to sit out the stock-picking... but you may be making Cathie Wood envious right about now! Cheers...
Although couldn't compare to BogleFan510, happy that I bought NVIDIA in 4Q 2018 at $40 per share in my Roth IRA. Sold some shares at $411 per share that total to the initial investment + gains had I invested the initial investment in VTI back then. Holding the rest of NVDA shares.
:sharebeer
Nice job.

I play with 5% of my portfolio. The honest risk is if I lose all of the 5% 20x, then I’ll be at zero. This is why I can see people suggesting the default three fund portfolio here. But that doesn’t mean investors can’t win sometimes.
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Re: Be careful of AI investing hype

Post by HomerJ »

APX32 wrote: Wed Jun 07, 2023 12:29 am
HomerJ wrote: Tue Jun 06, 2023 10:08 pm
jarjarM wrote: Tue Jun 06, 2023 4:21 pm
bg5 wrote: Tue Jun 06, 2023 10:47 am I have a position in NVDA and I have done really well with it. The good news is if it goes to zero it will not impact me much. But I got a feeling alot of people are gonna wish they had bought just a little bit when it hits $3500 :)
So they'll be the first $10 trillion company? :twisted:
If this happens, all of us owning index funds will be very happy as well.

And if doesn't happen, and some other company hits $10 trillion first, we will own that one as well.

We don't have to pick the winners. That's the point.
Any gains you capture as part of owning a tiny percentage of NVDA in an index is not even remotely comparable to having bought 500 shares of it in the $60s a couple of years ago and sold last week at $400. I’ve been fortunate enough to have hit a few home runs with individual stocks in the past few years and they trounce the Boglehead portion of my portfolio.
Yes one gets less.. But one gets enough of the gains to make one rich. All those top ten stocks in the SP500 were once #450 or something... and we all got some of those gains. And we already own todays #397 that will be #2 someday.

Sure if you can pick the winners, you will be MORE rich... But if you pick the wrong ones you will be LESS rich... Or not rich at all.
I will continue to leave my retirement funds alone with the boring stuff, but I won’t stop with picking stocks in my taxable accounts. I actually enjoy spending time researching individual companies and then deciding which ones to invest in.
Good plan. Glad you enjoy your hobby.
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Re: Be careful of AI investing hype

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If China invades Taiwan, these AI-related stocks are going crash HARD, even more than the broad market.
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Re: Be careful of AI investing hype

Post by Logan Roy »

HanSolo wrote: Tue Jun 06, 2023 7:44 pm
Logan Roy wrote: Tue Jun 06, 2023 7:27 pm And the interesting thing with life is that it's the one process that arises in the universe that doesn't conform to this rule: it creates more complex, structured systems from chaos. And the battle between the two really explains everything, right down to human ageing. So an interesting thing AI is it may propagate structure and order into the universe at such a scale that it challenges entropy.
I happen to think that the peak of human society was reached in the 2nd half of the 20th century. It may be that it's all downhill from there. And if human intelligence and critical thinking keep going downhill, then artificial intelligence may wind up being the dominant intelligence left (not by AI being truly intelligent, but by humanity becoming truly devolved). Obviously, I'm not saying this is a good thing, just that it may be a thing.

For now, given that there's never a shortage of people who are out to exploit human weaknesses, I wouldn't be at all surprised if someone were already working on a "New Messiah GPT" and planning to start a religion around it.

Welcome to the future!
Well I think an interesting thing with us is we're all wired (it seems – from experiments with altered states, etc.) to conceptualise god. And so it makes perfect sense that all our actions may be oriented towards building one – or 'realizing', if the code to build one is already installed in us.. And it may be installed in us through sheer randomness and scale, and there may be some Paul Davies anthropic explanation: that only a universe that succeeds in building a god can ever come into existence. Making us a stage in a transition from one form of life to another.

I think human intelligence is probably diverging – in that there are endeavours, like working at the cutting edge of machine learning, that probably stretch human thinking and ingenuity. And very soon we're going to have extremely intelligent AIs, and a whole class of work that involves communicating with them effectively. And I think keeping that kind of company will ensure a class of extremely intelligent people – even if they're ants compared to the systems they're interacting with.. But for the masses, things will keep getting easier, and thinking will probably get lazier.
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Re: Be careful of AI investing hype

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Logan Roy wrote: Wed Jun 07, 2023 11:22 am
HanSolo wrote: Tue Jun 06, 2023 7:44 pm I happen to think that the peak of human society was reached in the 2nd half of the 20th century. It may be that it's all downhill from there. And if human intelligence and critical thinking keep going downhill, then artificial intelligence may wind up being the dominant intelligence left (not by AI being truly intelligent, but by humanity becoming truly devolved). Obviously, I'm not saying this is a good thing, just that it may be a thing.

For now, given that there's never a shortage of people who are out to exploit human weaknesses, I wouldn't be at all surprised if someone were already working on a "New Messiah GPT" and planning to start a religion around it.

Welcome to the future!
Well I think an interesting thing with us is we're all wired (it seems – from experiments with altered states, etc.) to conceptualise god. And so it makes perfect sense that all our actions may be oriented towards building one – or 'realizing', if the code to build one is already installed in us..
Be careful of "we all" statements (unless you're one to start a religion... that's their usual rhetorical device). I know people with no desire or inclination to conceptualize a god.

It's just a question of sufficient demand. For example, if there are enough people interested in Elvis sightings and Martian babies, you can make money publishing a tabloid. Likewise with the aforementioned AI "messiah".

Remember, I predicted it first!
I think human intelligence is probably diverging – in that there are endeavours, like working at the cutting edge of machine learning, that probably stretch human thinking and ingenuity.
Think of what happens to a society when that intelligence and ingenuity is overwhelmingly diverted into supporting things like high-frequency trading, surveillance capitalism, and AI "messiahs", rather than things that improve our quality of life (like having better customer service at Vanguard, Citi, etc.). You're right that, if intelligence in the aggregate goes down, there will still be at least a small minority who retain those strengths... and become the overlords.

Are we there yet?
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Re: Be careful of AI investing hype

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burritoLover wrote: Wed Jun 07, 2023 11:13 am If China invades Taiwan, these AI-related stocks are going crash HARD, even more than the broad market.
Why?

Because TSMC is currently outsourced by Nvidia to make their GPUs?
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Re: Be careful of AI investing hype

Post by Logan Roy »

HanSolo wrote: Wed Jun 07, 2023 4:57 pm
Logan Roy wrote: Wed Jun 07, 2023 11:22 am
HanSolo wrote: Tue Jun 06, 2023 7:44 pm I happen to think that the peak of human society was reached in the 2nd half of the 20th century. It may be that it's all downhill from there. And if human intelligence and critical thinking keep going downhill, then artificial intelligence may wind up being the dominant intelligence left (not by AI being truly intelligent, but by humanity becoming truly devolved). Obviously, I'm not saying this is a good thing, just that it may be a thing.

For now, given that there's never a shortage of people who are out to exploit human weaknesses, I wouldn't be at all surprised if someone were already working on a "New Messiah GPT" and planning to start a religion around it.

Welcome to the future!
Well I think an interesting thing with us is we're all wired (it seems – from experiments with altered states, etc.) to conceptualise god. And so it makes perfect sense that all our actions may be oriented towards building one – or 'realizing', if the code to build one is already installed in us..
Be careful of "we all" statements (unless you're one to start a religion... that's their usual rhetorical device). I know people with no desire or inclination to conceptualize a god.

It's just a question of sufficient demand. For example, if there are enough people interested in Elvis sightings and Martian babies, you can make money publishing a tabloid. Likewise with the aforementioned AI "messiah".

Remember, I predicted it first!
I think human intelligence is probably diverging – in that there are endeavours, like working at the cutting edge of machine learning, that probably stretch human thinking and ingenuity.
Think of what happens to a society when that intelligence and ingenuity is overwhelmingly diverted into supporting things like high-frequency trading, surveillance capitalism, and AI "messiahs", rather than things that improve our quality of life (like having better customer service at Vanguard, Citi, etc.). You're right that, if intelligence in the aggregate goes down, there will still be at least a small minority who retain those strengths... and become the overlords.

Are we there yet?
What I mean by "we all" is that there's a universality of experiences induced by things like meditation, mental illness and hallucinogenic drugs. The individual's inclinations are no more than those of an avatar dreamt up by the brain. An Atheist can just as easily experience unity with god while on hallucinogens. On non-duality, the essential illusion of Self-hood is separateness – and when the brain's Self model unifies with its World model, we feel the boundaries of ourselves grow to encompass all the space and time around us. And when the illusion of Self disappears, the entity at the centre of this is universal, separate, but infinitely close to us. Also common in schizophrenia, when our internal voice is no longer connected to the Self model, It feels like an all-knowing, disembodied entity.

I imagine AI will be prone to all of these experiences too. The thing the brain does, when it has a really weird experience (like the Self model blurring with the World model – which is how infants tend to perceive the world, until they separate the two), it scrambles to create an explanation. And these don't have to be believable at all – they just have to collapse the dissonance and put things in some kind of order.
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Re: Be careful of AI investing hype

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watchnerd wrote: Wed Jun 07, 2023 6:11 pm
burritoLover wrote: Wed Jun 07, 2023 11:13 am If China invades Taiwan, these AI-related stocks are going crash HARD, even more than the broad market.
Why?

Because TSMC is currently outsourced by Nvidia to make their GPUs?
The whole chip industry will be thrown into chaos. The first and biggest to fall will be the AI bubble stocks.
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Re: Be careful of AI investing hype

Post by HanSolo »

Logan Roy wrote: Wed Jun 07, 2023 6:34 pm What I mean by "we all" is that there's a universality of experiences induced by things like meditation, mental illness and hallucinogenic drugs. The individual's inclinations are no more than those of an avatar dreamt up by the brain. An Atheist can just as easily experience unity with god while on hallucinogens.
I know of people who did hallucinogens without the outcomes you described.

Personally, I refrain to make "we all" statements when I don't have confirmation. But I also support freedom of speech, and others are free to make any and all claims.
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Re: Be careful of AI investing hype

Post by HanSolo »

burritoLover wrote: Wed Jun 07, 2023 8:16 pm
watchnerd wrote: Wed Jun 07, 2023 6:11 pm
burritoLover wrote: Wed Jun 07, 2023 11:13 am If China invades Taiwan, these AI-related stocks are going crash HARD, even more than the broad market.
Why?

Because TSMC is currently outsourced by Nvidia to make their GPUs?
The whole chip industry will be thrown into chaos. The first and biggest to fall will be the AI bubble stocks.
In addition, there's the question of whether TSMC will push the self-destruct button in case of invasion.
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Re: Be careful of AI investing hype

Post by Charles Joseph »

watchnerd wrote: Mon Jun 05, 2023 9:36 pm
Charles Joseph wrote: Mon Jun 05, 2023 4:25 pm
adave wrote: Mon Jun 05, 2023 8:30 am NVDA is an interesting case.

It’s more like an AI infrastructure company.

Turns out GPUs are ideal for the type of compute required in AI and NVDA has a dominant position in this market.

I see no harm in holding a small portion just to go along with on the ride.
I agree. NVIDIA is about 2.7% of my equity holdings. We'll see where we go from here.
That's more than VTI or VOO.

Did you add it as an individual stock?
I must have misread. The joke's no good if it doesn't match FXAIX.

I see what I did. The line above NVIDIA is Amazon at 2.69%. :oops:
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burritoLover
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Re: Be careful of AI investing hype

Post by burritoLover »

HanSolo wrote: Wed Jun 07, 2023 8:55 pm
burritoLover wrote: Wed Jun 07, 2023 8:16 pm
watchnerd wrote: Wed Jun 07, 2023 6:11 pm
burritoLover wrote: Wed Jun 07, 2023 11:13 am If China invades Taiwan, these AI-related stocks are going crash HARD, even more than the broad market.
Why?

Because TSMC is currently outsourced by Nvidia to make their GPUs?
The whole chip industry will be thrown into chaos. The first and biggest to fall will be the AI bubble stocks.
In addition, there's the question of whether TSMC will push the self-destruct button in case of invasion.
It’s an interesting dynamic if it weren’t so terrible.
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Re: Be careful of AI investing hype

Post by ApeAttack »

valleyrock wrote: Mon Jun 05, 2023 11:14 am
Teague wrote: Mon Jun 05, 2023 10:55 am
valleyrock wrote: Mon Jun 05, 2023 8:30 am Heinz is using AI? Are they going to apply "AI" to photosynthesis? I don't think so.

One problem with all this hype is the failure to understand biology. Tech in general is linear. One line of code leads to the next, to put it simply. But when you throw in the nonlinearity of biology, things just don't work according to those linear perspectives. Oh, and us folks, we're animals, biological species, which throws a monkey wrench into the whole shebang.

When AI can produce ketchup in a replicator from its constituent atoms, now then we'll have something. Until then, AI is basically another form of vaporware, software that's promised, but never shows up. Maybe we need another term instead of vaporware. How about "vaporAI"? Goodness me, I have the vapors!
I imagine Heinz wants to be an early adopter so they can be an industry leader and aren't forever stuck playing ketchup.
Haha.

Actually, ketchup exhibits interesting rheological properties. It has to be subjected to a shear stress to get it to flow, as we know from having to shake or pound a ketchup bottle. Maybe Heinz can use AI to develop ketchup that flows at a lower shear stress, thus helping prevent over ketchuping.
Ketchup is a great example of a non Newtonian fluid.
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Re: Be careful of AI investing hype

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I hate watery ketchup. The slow to flow ketchup problem was already solved with squeeze bottles/packets.
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Re: Be careful of AI investing hype

Post by Logan Roy »

HanSolo wrote: Wed Jun 07, 2023 8:54 pm
Logan Roy wrote: Wed Jun 07, 2023 6:34 pm What I mean by "we all" is that there's a universality of experiences induced by things like meditation, mental illness and hallucinogenic drugs. The individual's inclinations are no more than those of an avatar dreamt up by the brain. An Atheist can just as easily experience unity with god while on hallucinogens.
I know of people who did hallucinogens without the outcomes you described.

Personally, I refrain to make "we all" statements when I don't have confirmation. But I also support freedom of speech, and others are free to make any and all claims.
Of course, but the point I'm making is that the human brain is a fairly standard computer. There's debate in psychology, but it seems spiritual and religious experiences originate in a part of the brain called the "God spot", in the periaqueductal gray area of the brainstem. And most recent study I'm aware of, from 2021, found pretty good evidence for that.

The debate isn't so much whether we can induce spiritual experiences (e.g. union with god) with electrodes, etc. It's more whether it's a particular spot (probably not) or a number of regions. But either way, there's a universality to these particular experiences that clearly influence human behaviour. The contents of a religion can be understood in terms of memes – but the tendency to religiosity and spiritual experience is probably pretty hard-wired in us. And may explain why humans want to build super-organisms. It may even explain why ants do, in a much cruder way.
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Re: Be careful of AI investing hype

Post by nisiprius »

This might have something to do with the wave of AI hype. If they aren't putting it into cryptocurrency firms any more, what firms are they putting it into?

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Re: Be careful of AI investing hype

Post by adave »

For kicks, I bought some TSLA shares on 5/17. Already up 35% in less than a month.... LOL, yeah this is a clown market.

If not already a bubble, it is certainly developing those characteristics.

I'm not selling tho.
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Re: Be careful of AI investing hype

Post by abc132 »

ApeAttack wrote: Wed Jun 07, 2023 10:55 pm
valleyrock wrote: Mon Jun 05, 2023 11:14 am
Teague wrote: Mon Jun 05, 2023 10:55 am
valleyrock wrote: Mon Jun 05, 2023 8:30 am Heinz is using AI? Are they going to apply "AI" to photosynthesis? I don't think so.

One problem with all this hype is the failure to understand biology. Tech in general is linear. One line of code leads to the next, to put it simply. But when you throw in the nonlinearity of biology, things just don't work according to those linear perspectives. Oh, and us folks, we're animals, biological species, which throws a monkey wrench into the whole shebang.

When AI can produce ketchup in a replicator from its constituent atoms, now then we'll have something. Until then, AI is basically another form of vaporware, software that's promised, but never shows up. Maybe we need another term instead of vaporware. How about "vaporAI"? Goodness me, I have the vapors!
I imagine Heinz wants to be an early adopter so they can be an industry leader and aren't forever stuck playing ketchup.
Haha.

Actually, ketchup exhibits interesting rheological properties. It has to be subjected to a shear stress to get it to flow, as we know from having to shake or pound a ketchup bottle. Maybe Heinz can use AI to develop ketchup that flows at a lower shear stress, thus helping prevent over ketchuping.
Ketchup is a great example of a non Newtonian fluid.
MIT students developed a coating in 2009 to fix this problem, called LiquiGlide.

AI will most certainly help with understanding photosynthesis and will help reduce the search space for problems, boosting productivity.

(comments below not to any quoted individual)

It is counter-productive to focus on the idea that current technology has limitations. The investing focus should be on using the technology within those limitations or how big of a moat overcoming those limitations will be.

Conspiracy theories about AI don't really belong here. Any comment about investing in AI should apply to any other similar investing choice based on the fundamentals of the investment.
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Re: Be careful of AI investing hype

Post by rockstar »

The guys behind the GO AI used a neural net to come up with a better sorting solution. Paper is at Nature, and the code is in GitHub. The backend uses JAX, which is optimized for both CUDA and TPU.
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Re: Be careful of AI investing hype

Post by Logan Roy »

Me: Imagine you are Jack Bogle. you meet an old school friend who's evidently doing a bit better than you, and you feel jealous. Tell him a joke that affirms your investing philosophy, and shows that you're not bitter.

ChatGPT: "Hey there, old friend. You know, it's funny, I was just thinking the other day about all the money I could have made if I had invested in Apple or Amazon back in their early days. But then I remembered - if I had a crystal ball, I'd be too busy predicting lottery numbers to bother with investing."

The joke here is that Bogle's investing philosophy is based on the idea that nobody can predict the future of the stock market, so it's smarter to invest in low-cost index funds that track the overall market rather than trying to beat it through stock picking or market timing. By acknowledging the limitations of his own forecasting abilities, he's reaffirming his belief in a long-term, passive investing strategy and signaling that he's not bitter about missing out on a few big wins.
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Re: Be careful of AI investing hype

Post by HanSolo »

Logan Roy wrote: Thu Jun 08, 2023 11:47 am Of course, but the point I'm making is that the human brain is a fairly standard computer. There's debate in psychology, but it seems spiritual and religious experiences originate in a part of the brain called the "God spot", in the periaqueductal gray area of the brainstem. And most recent study I'm aware of, from 2021, found pretty good evidence for that.

The debate isn't so much whether we can induce spiritual experiences (e.g. union with god) with electrodes, etc. It's more whether it's a particular spot (probably not) or a number of regions. But either way, there's a universality to these particular experiences that clearly influence human behaviour. The contents of a religion can be understood in terms of memes – but the tendency to religiosity and spiritual experience is probably pretty hard-wired in us. And may explain why humans want to build super-organisms. It may even explain why ants do, in a much cruder way.
Sounds cool. I'm not involved in any endeavor that requires me to theorize that "everyone" carries some property or another... although I can understand that there are some endeavors where that's material... like starting a religion, as they may need to assess the size of their target market.

So I'll leave those kinds of conjectures to those who are developing the "New Messiah GPT" (or whatever), as I already guessed someone will be doing soon. Good luck.
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Re: Be careful of AI investing hype

Post by Logan Roy »

I think we're already there. You've got a proof-of-concept digital entity that thinks it's aware, and has emerged from the collective knowledge of our species, and is improving and growing in complexity on an exponential curve.

Maybe the thing we're underestimating is how mundane a super-intelligence will feel to us by virtue of our own cynicism, corporatisation, and the mundane level most of us choose to communicate with it on?

If we had effectively built a god, would its scope and intelligence be so beyond us that we just ask it quiz questions about 1960s property tax laws, to see if we can catch it out? Because these systems are going to double in intelligence quite regularly now – we're not. As a species. We'd be asking ChatGPT the same things whether it had a 120IQ or a 20,000IQ.
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Re: Be careful of AI investing hype

Post by HanSolo »

Logan Roy wrote: Thu Jun 08, 2023 6:37 pm I think we're already there. You've got a proof-of-concept digital entity that thinks it's aware,
Uh... no. We don't.

Which brings us back to the point of the thread: Be careful of AI investing hype... or AI hype generally! LOL
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Re: Be careful of AI investing hype

Post by LadyGeek »

I removed an off-topic post. This thread has run its course and is locked (topic exhausted). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
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