Happy Monday… and happy first trading day of October!
I get a little rush knowing I’m at my desk working while competitors are asleep.
Get up before the enemy… win the day.
And as Annie Dillard said in The Writing Life: “How we spend our days is, of course, how we spend our lives.”
The big news from the weekend is the US government will not shut down. Congress struck a last-minute deal on Saturday.
This comes as no surprise. Political bickering over the debt ceiling always ends the same way: Politicians hammer out a deal and both sides (mostly) get what they want.
It’s political theatre. Don't let it distract you from what really matters: investing in great businesses for the long term.
Never mix politics and investing.
Here’s what I’m thinking…
- Investors should be happy September is in the books.
It lived up to its reputation as the worst month for stocks. US markets slid 5.5%.
Now we’re entering what’s historically the best time for stocks, as this chart shows:
Ignore all the chatter about why stocks dropped over the past month. If you’ve been following along, you expected it.
Based on the above chart—and our work on “year 3” of a presidential cycle—I expect stocks to stabilize in October before finishing the year higher.
Regardless of what the overall market does, if you invest in great disruptors that can sail through stormy seas, the rest will take care of itself.
- My “a-ha” investing idea from the new ChatGPT.
When I started investing in artificial intelligence, AI couldn’t tell a chihuahua dog from a blueberry muffin! (Seriously.)
Source: HuffPost
Thanks to its big upgrade last week, ChatGPT can now “see” and “hear.” For example, you can take a photo of all the items in your fridge and ask ChatGPT for dinner recipes using only those ingredients.
Folks who can’t type—like kids—can now use ChatGPT, too. My four-year-old daughter can ask it to think up a bedtime story about her flamingo teddy named Gilda.
Try these new features for yourself. They’re incredible.
Takeaway #1: This evolution happened blazingly fast.
ChatGPT was a clunky text-only interface when it was released less than one year ago. Now it’s your own personal assistant… and it’s actually smart and understands the context in which you ask it to do things.
Wow. I’ve never seen anything like the speed at which AI is advancing. For investors, this will create many opportunities to make a lot of money quickly.
Takeaway #2: We need 100X the computing power available today, and we need it yesterday!
Ever notice how much longer it takes to send an email when you attach a photo compared to a regular old bit of text? Photo (and audio) files are much larger, so it takes more computing oomph to send them.
AI systems already ran on thousands of incredibly powerful chips. And that’s before we started feeding photos and videos into them.
Bottom line: “Multimodal” AI will vacuum up even more cutting-edge AI chips. Buy the best chip stocks.
Takeaway #3: Teach your kids ChatGPT.
The world’s best drone pilot isn’t some chiseled Air Force maverick. It’s a teenage girl from Thailand who grew up playing video games.
I’m all for limiting kids’ time watching tablets and TV. And keeping them off social media. But AI is different. You must teach your kids how to use it.
AI will spawn many trillion-dollar companies. Showing your kids how to master ChatGPT will be more valuable than any homework you’ll ever help them with.
If a “silly” and rudimentary video game technology helped a Thai teenager become a drone “ace”… who knows what our kids (or grandkids) will achieve with AI?
Give them a head start.
- Biologics just might be the next big thing.
“Pessimists sound smart; optimists make money” is a motto I live by.
I’m a “glass half full” type of guy for practical reasons: It’s the mindset you need to make real money in the markets.
Sure, there are lots of problems in the world. I choose to invest in the savvy entrepreneurs solving them.
Disruption Investor portfolio manager Chris Wood and I are working on one big reason for optimism… and a big source of stock market profits: biologics.
Regular drugs like aspirin come from chemicals. Biologics are made from living things… like Herceptin, which stems from mice and is used to treat breast cancer.
Biologics are better because they work like tiny, precise lasers that pinpoint the problem and take it out.
In fact, 14 of the top 20 best-selling drugs in the world today are biologics. And for reasons I’ll show you in future issues… we’ve only scratched the surface.
We’ll likely make an investment in the company fueling the biologics revolution soon.
- Today’s dose of optimism…
I was out walking with my two kids, and an older woman stopped to talk to us.
She said: “I remember going up and down this road with my son. Now he’s all grown up and planning his wedding. It goes by fast—cherish it.”
It hit me hard.
It’s easy to get caught up in the hum-drum of everyday life. But remember, your kids (or grandkids) won’t be kids forever.
So spend your time wisely, with those you love, in ways you’ll never regret.
Stephen McBride
Chief Analyst, RiskHedge
