The commercial rollout of artificial intelligence (AI) is a real thing that will change the world—and it has investment implications.

That said, I don’t think that any of the smart systems we’ve seen so far can correctly be called AI.

I’ve written before that I reject the Turing test: a machine being able to fool a human into thinking it’s human doesn’t make it human.

These systems lack judgment.

Or as former IBM CEO Sam Palmisano says, ChatGPT and such systems lack cognition.

They can apparently read everything on the internet and collate more data in a few seconds than any human can in a lifetime—but that doesn’t make them smart.

They often generate bland, formulaic banalities, such as when I asked ChatGPT how a recession might affect metals prices.

They display political bias as a result of the input—the internet—being flooded with bias.

Basically, they can’t tell shit from Shinola.

Worse, when they can’t find shit or Shinola, they may just decide to make it up.

Consider this bio a reader got when he asked one of these AI systems for information on me.

 

Most of this is not just wrong, it’s flat-out made up.

There’s no such thing as Lobo Tiggre Wealth Management (I did a search to check). I never went to the University of Pennsylvania or Wharton. I’ve been interviewed on Bloomberg, BNN, and industry media, but never (so far) by the Wall Street Journal or the New York Times.

I certainly was never an investment banker at Goldman Sachs!

The two things my name is frequently associated with in freely available information online are my company, Louis James LLC (The Independent Speculator), and a novel I wrote in the 1990s: Y2K: The Millennium Bug. Somehow, the so-called AI didn’t find either of these things… so it made other stuff up instead.

Sheesh!

That’s not to say that today’s pseudo-AI is worthless.

Apparently, it can already write simple code well enough that it’s enhancing programmer productivity.

Some people who had rote information jobs have already been replaced by bots. British Telecom made headlines last month, announcing that it would be laying off over 10,000 people and replacing them with bots. I feel for those being made “redundant,” as they say across the pond, but if this lowers costs for BT customers, this will be a classic case of progress through creative destruction.

There have been digital supermodels for years, and their numbers are growing. I’m told they have social media accounts with large followings. Now I hear that it won’t be long before Hollywood won’t need actors.

Hm. That might be a very good thing, come to think of it…

But if directors want their virtual actors to play out stories with the power to move hearts and minds, I think they’ll need human writers for a long time yet.

At any rate, my point is not to dismiss AI, nor to tell anyone not to invest in it. My intention is to discourage chasing absurdly overpriced stocks today, based on the dream of what AI may deliver somewhen in the future.

Remember the dot-com mania.

It seems just as bad today. Even financial talking heads on mainstream media are laughing about how many times companies are inserting “artificial intelligence” into their earnings reports.

Sure, anyone who picked Microsoft, Apple, and Amazon before the dot-com wipeout—and had the staying power to ride the storm out—would be doing well today… but I don’t know of anyone who did that.

I’m sure I wouldn’t have.

I remember worrying that I might not be able to order books from Amazon if it went bust after all those years of losing money.

I’m sure there’s money to be made in some AI stocks.

I’m just as sure that I’m not the due diligence guy to pick them.

 

A Different Crisis/Opportunity

But there’s something else that comes to mind as the pseudo-AI craze reaches a fever pitch…

The way shares in companies are going vertical as soon as companies mention AI is rather like what we’d see if pseudo-AI trading tools were searching for and buying stocks on that basis.

 

 

Robo-trading would explain why a company as large as Nvidia could leap by a good 25% in a day—based on nothing more than an outlook that mentioned AI.

That’s worth stressing: the company beat on earnings, but it’s the as-yet-unrealized outlook that sent the stock stratospheric.

And then it hit me: what if people aren’t actually that stupid—what if it’s pseudo-AI bots turning even the largest companies into meme stocks?

At first blush, this idea is rather depressing.

We may be witnessing the dawn of a truly staggering level of artificial stupidity.

One of my favorite jokes for years has been: “To err is human—but to really mess things up, you need a computer.”

Well, we may all soon have front-row seats to watch this unfold at scale, worldwide.

Imagine Kafkaesque bureaucratic insanity vastly multiplied and permeating every aspect of our lives. I’m not sure I’d see the point of even trying to save such a planet.

Then I had another thought: what if artificial stupidity could be predicted?

What if an unbiased smart system could be programmed to predict which stocks artificial stupidity would send vertical—before it happened?

“In the land of the blind, the sighted would be king.”

If there’s anything to this idea, there must be an opportunity for those who can use systems that are smart (even if not capable of actual thought) to exploit the misuse of artificial stupidity.

I don’t for a minute imagine that I could program such a thing.

(I could ask ChatGPT to do it, but I wouldn’t trust the result. ;-)

Maybe you’ll crack that nut.

One thing I’m sure of: no matter how excellent any future trading system is, all systems are vulnerable to the “garbage in, garbage out” problem.

A valid syllogism may yield an incorrect answer if any of the starting premises are false.

And when it comes to scouring the internet—or even SEDAR and EDGAR filings—pseudo-AI systems are not showing much ability to detect falsehood.

That’s where My Take comes in.

My team and I are fallible. We certainly don’t pretend to know what share prices for all the companies we cover will be in the future. But we work for you—not the companies. Every one of us is dedicated to getting you the truth about the stocks we write about, or as close to it as we can possibly get.

Perhaps there’s a future in which ours becomes a larger company dedicated to due diligence on many fronts beyond natural resources. Louis James LLC could become a preferred answer to the “garbage in, garbage out” problem.

For now, however, we’re happy to keep kicking rocks and reporting on our findings to you via My Take.

Meanwhile…
 

Caveat emptor,

 

P.S. As always, no arm-twisting, but if you’d like to give My Take a try, it only costs $50 a month and it already covers over 600 mineral exploration and production companies worldwide—and we do take requests.