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Jurgis

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    AI - Artificial Intelligence

    in General Discussion

    Posted

    5 hours ago, LearningMachine said:

    Other than QQQ, IWO, IWF, XBI & FSPHX, what other ETFs are you thinking might be a good way to catch growth? 

    FSPHX is not really growth. It's mostly old medical and pharma. Good fund historically, but not shoot out the stars growth.

    Well, since you asked:

    https://cathiesark.com/ 😎😈

    JAMFX

    I would respectfully ask to move any ARK discussion into ARK thread that exists somewhere. I'd rather AI thread not become ARK thread. 😇

    AI - Artificial Intelligence

    in General Discussion

    Posted

    2 hours ago, LearningMachine said:

    Got it.  One company I've been watching in biotech space seems to be operating more as an investment fund.  Similar to how Sequoia buys tech companies early and takes them through IPO, this company takes drug pipelines in early stages and takes them through approval, which looks like a high ROI activity to me. The company is Biogen.  It is not super-great how they have been handling their aducanumab investment, and we also don't know how well their recent other investments will actually pan-out.  Have you looked into it? 

    XBI might be able to capture some of these early pipeline companies also, but then we have to study the success rate of these companies - because of the huge pricing power, getting approval is such a huge success that maybe a low success rate could be ok?

    My other worry with biotech companies is that it needs just a small tweak in the law for their pricing power to deteriorate, e.g. if Medicare is allowed to negotiate with drug companies.

    The other issue is constant expiry of monopoly on drugs.  Medical device companies can get around that through other means, e.g. new patents for the same evolving devices, brand-name, insider-secrets, more complex/evolving interfaces/functionality that is harder to copy, etc. However, they are all trading with high valuations. 

    I am wrong person to ask about biotech. Every time I tried to get into it, I found out that the amount of material is huge and it is very hard to get a deep insight into it. I think I'm gonna defer to FSPHX for old med/pharma and XBI for the new bio.

    I agree with your comments about valuations, pricing power risks, expirations, etc.

     

    AI - Artificial Intelligence

    in General Discussion

    Posted

    2 minutes ago, LearningMachine said:

    If biotech is going to be the next big waive, wouldn't S&P 100 based indexes, e.g. EQWL, be able to catch it also? 

    Sure, at some point SP100 captures any big wave. Because it is based on SP500, it missed TSLA for a long time, so maybe that's a ding a bit for both SP100 and SP500.

    My comment about biotech was more in terms of individual company investing and not indexes/ETFs. Leading non-bio AI companies are pretty clear. Leading bio AI companies are way less clear at this point IMO. That might be a reason for funds/etfs. 

    AI - Artificial Intelligence

    in General Discussion

    Posted

    1 minute ago, LearningMachine said:

    I think Nortel and Cisco were more like automakers, and QCOM was more like patent owner for some technology needed for autos.  None of them owned a right to scare pathways, and thus weren't like highways. 

    The analogy for the internet could have been fiber only if more fiber was not allowed to be laid.  So, fiber is not a good analogy for spectrum either. 

    OK. I am aware of your bullish thesis on VZ and the attraction of spectrum. I am not bullish on VZ and I am not that interested in that area or VZ as a company to discuss it. Good luck.

    AI - Artificial Intelligence

    in General Discussion

    Posted

    5 hours ago, LearningMachine said:

    It is possible that might work.  That said, this expectation is somewhat already reflected in the P/E by the market.  So, if prediction ends up wrong here by any chance, e.g. new companies come and do a better job at providing technology or provide amazing consumer experiences directly, those buying at today's prices might not do as well. 

    One thing all these bots buzzing around and even stationary bots (IOTs) will need is ability to communicate with the mothership (i.e. companies owning them) and/or with each other. 

    • For bots running around at home, that communication can be over the unlicensed spectrum at home, that then connects them over fiber to the motherships.
    • For bots running around or stationed outside home, the communication will likely need to be over spectrum that has some sort of guaranteed availability, i.e. licensed spectrum. 

    Spectrum for AI bots is like highways for cars.  

    Another way to look at it is that imagine if before humans arrived, you could have figured out that they will need a way to communicate with each other and with some central data repositories/services they create.  Imagine you could somehow own some percentage of audio-frequencies that humans can hear & utter, and some percentage of electromagnetic-spectrum frequencies visible to humans (e.g. black, blue, green, white colors), and humans had to pay you with their fruits of labor for using those sound & light frequencies, you could make a lot of money. 

    Currently, there is only one company that has the most amount of cash coming in to buy out spectrum frequencies as they become available, and Buffett is investing in it.  Market is currently predicting not much from this company for AI.  If market prediction ends up being incorrect here, it might work in the favor of those investing in it today. 

    Investing in highways is intellectually appealing ( autocorrect corrected that to "ineffectually appealing" - that too 🤓).

    However, if you did that in 1999, you would have ended with a lot of (near) donuts. Nortel. Ciena. Cisco (not donut, but still not back to 1999), Lucent. Even QCOM that was the one company to rule them all ( read "Gorilla Game" thread on Silicon Investor when you have couple weeks - and weep ) - only came back above 1999 levels last year. Yeah, if you DCA'ed, you'd done better. Still the "highways" or "picks and shovels" was not where the money was made mostly.

    So IMO careful with that approach.

     

    AI - Artificial Intelligence

    in General Discussion

    Posted

    4 hours ago, LearningMachine said:

    QQQ - I have the same concerns that it is Nasdaq-only, and the company that ends up leveraging AI most might not end up being on Nasdaq

    Regarding IWO/IWF, I think there is a good chance that any new companies that have potential to leverage AI might go IPO after they are already quiet big in valuation.  So, going with broader index might dilute your bet too much unnecessarily. 

    Given what you said about winners taking it all in the other equal-weighted etf thread, what about S&P 100?  One risk there is you miss out on the growth of the company from S&P 500 to S&P100, but there might be a good chance that such companies with huge potential might not become public until they have already reached S&P 100 market cap, and that way you dilute less over the bottom 400 in S&P 500?  One risk with this approach though is that Antitrust might get more active and might not let companies get too big. 

    While at it, how about equal-weighting S&P 100 now?  Given it is S&P 100 not S&P 500, it addresses your concern to some extent about winners taking it all?

    Honestly IMO with funds the decision is more what you like and what you are comfortable with than trying to make a rational(ized) decision which fund will outperform. I'd say "who knows". There are pluses/minuses for all of them.

    One thing we did not touch: what if the next big wave is biotech or biotech AI? Then the answers are very different.

    AI - Artificial Intelligence

    in General Discussion

    Posted

    On 5/15/2021 at 12:28 PM, LearningMachine said:

    Is there a better answer than S&P 500? 

    QQQ maybe. I don't particularly like their selection criteria of being Nasdaq-only though.

    IWF/IWO maybe.

    You could go with some actively managed fund, but then you might do as well yourself maybe.

    Although I would like to hear if anyone has a good ideas for fund(s).

    AI - Artificial Intelligence

    in General Discussion

    Posted · Edited by Jurgis

    On 5/15/2021 at 12:28 PM, LearningMachine said:

    Back in 1999, imagine you had the glance from the future that Internet was going to change the world.  How could you have invested so that you would have picked Amazon and Apple, as well as, Google and Facebook, when they went public, while avoiding investing in thousands of DotCom companies that went bankrupt?

    Imagine back in 1999, you also decided that you didn't want to have to sell anything to pay capital gains.  Is the only way to pick Google and Facebook automatically as they went public would have been through picking an ETF or Index fund?  Which ETF or Index fund would have picked them up automatically?  Would that have picked Amazon and Apple as well?  Would that be able to pick automatically any new companies that benefit from AI in the future?  Is there a better answer than S&P 500? 

    As you know, Google and Facebook were not public in 1999 and Facebook was not even a thing. 😎

    I was there when Google started - I know some #-single-digit employees personally. I was stupid value investor enough not to join/invest.

    Apple was not the-real-Apple (TM) in 1999 yet.

    We already talked about Amazon-vs-Ebay on the other thread.

    Even assuming we avoided pets.com, investing in 1999 would have been Amazon, Yahoo, Ebay, ??? and out of these only Amazon worked out eventually. There is a big risk that that's the same situation right now. Although one could argue that AI requires huge companies with huge data sets and Google/Facebook/Amazon/Apple/Microsoft will win vs any startups.

    Looking from the positive point of view, for any non-value-investors, there was a very long time - 20 years so far !!!! - to invest into Google/Apple/Amazon/Facebook sometimes at quite attractive valuations. The only requirement was not to sell when valuations went above "value investor sell threshold". I mostly failed on that too. But this might be a good way to invest in AI going from today. The positive is that you can follow the companies and sell off the ones that don't deliver. It's not easy, but it is somewhat possible. E.g. even though I stupidly value-investor sold most shares that I acquired through the last 20 years, I have to say - pretty honestly - that I did not buy (m)any shitcos that did not deliver. So it is possible IMO to pick mostly winners.

    Anyway, what I own from AI now: Google, Microsoft, Nvidia, Amazon, Facebook. I own tiny position in TSLA. I own Apple, but I doubt it's going to be great AI play. I own tiny positions in some shitcos. I don't think there are other obvious AI investments right now. I'm interested to hear if someone has suggestions though.

     

    Book Notes: Feeling Good - David Burns

    in Books

    Posted

    @LongHaul did not target the notes and recommendation for people with depression. So maybe this is a bit OT, but: there are chemical imbalance causes for depression and other psychological issues. And there are situations where drugs just work (TM). I know people who tried CBT methods and they did not work much if at all, while minimal doses of drugs worked great. I know someone for whom the depression symptoms were due to vitamin D deficiency and fixing that got rid of the symptoms/issues. Not saying that drugs are always the answer, but sometimes they are. If it's at a level of clinical issue, find a good professional, preferably someone who knows both CBT and drugs. Good luck.

    Cryptocurrencies

    in General Discussion

    Posted

    21 minutes ago, Jurgis said:

    US airlines should accept Doge coins for tickets. Their stonks would go 🚀🚀🚀🚀, they could buy more Doge coins and use them to buy more of their stonks. This would be Space X on steroids.

    I am too late:

     

    Cryptocurrencies

    in General Discussion

    Posted

    2 hours ago, Spekulatius said:

    The technical barriers to entry are nil. Dodge coin has proven to get to $100B in market value. That’s larger than the entire US airline industry in terms of market cap.

    US airlines should accept Doge coins for tickets. Their stonks would go 🚀🚀🚀🚀, they could buy more Doge coins and use them to buy more of their stonks. This would be Space X on steroids.

    Best Canadian Broker to buy International Stocks?

    in General Discussion

    Posted

    1 hour ago, longlake95 said:

    it's really quite sad, considering you can buy stocks with NO commissions if you live in the USA, with Schwab, TD Ameritrade, Fidelity, etc...

    We are just so far behind.

    You cannot buy stocks on foreign exchanges with no commissions in USA. At least not in Fidelity.

    And you could not buy stocks on foreign exchanges in retirement accounts in Fidelity either. This may have changed - or not.

    Can anyone recommend an insurance book with with stories about the lack of discipline?

    in General Discussion

    When the growth stops - global population peak and decline

    in General Discussion

    Posted · Edited by Jurgis

    Declining population does not need to mean declining economy or "massive economic problems".

    It all depends on productivity.

    If we reduce this to an absolute, a single (immortal) person living on Earth could still have a great standard of living and great economy if everything was automated.

    This puts a tremendous burden on automation and AI for the next 50-100 years though.

    Also, invention has to be shifted to AI too, since with declining human population, the number of inventors will also decline. If human inventiveness is not replaced by AGI, there's an issue.

     

    Another two alternatives that may become reality:

    1. (Practical) Immortality. That would slow down the population decline to almost nothing. I'm still accepting bets for a charitable lunch that we will have practically immortal people in 30 years or so. (Honor basis, I'm paying for lunch if I lose, PM me, limited spots, I reserve the right to refuse. Lunch won't be held if I die before then).

    2. Radical reduction in the cost/effort of having children. Uterine replicators. Change in morality/politics/economics that shifts burden and responsibility of raising kids from parents to society. China and CCP: this is your chance to rule the world! And before someone decries this as a communist idea, please remember that Britain did this in the past with boarding schools and they were capitalist thankyouverymuch... and they had a global empire. Risk: morality/politics/economics change (too) slowly.

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