Yes, AI Is Real. And Yes, It's Coming For You.
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Make AI Work For You. Or You Will Be Working For AI.
by Alex King, CEO, Cestrian Capital Research, Inc.
I want to keep this post short, simple and on point.
AI has enjoyed the first flush of enthusiasm, as can been seen from the stock price run-ups in Nvidia, Super Micro and others, and the general-purpose tinkering that a lot of people are doing using the low-cost versions of ChatGPT, Midjourney and so forth.
We are now seeing the first cracks in the story, where folks are beginning to question whether any commercially viable use-cases will materialize, whether it was all a bubble or a scam or some other kind of trickery.
This is normal for any new generation of technology. The storied book Crossing The Chasm details the struggle that all new generations have to endure; some succeed, some fall by the wayside.
Visually we can see it from the 'Technology Adoption Lifecycle' curve - here's a version of it below.
The investor narrative is now moving to:
- "Is this even a thing?" (dumb investor)
- "Will this generate real cashflow and therefore value?" (smart investor)
- "But is it all just matrix algebra"? (smart engineer-investor)
But the corporate - which is to say user - narrative is moving to:
These use cases are starting to pop up time and again.
If you think AI won't make inroads into corporate America, you have to ask why that is - because every other major technology generation change has been successfully adopted. In 2002/3 when Salesforce ($CRM) launched its IPO, a large number of corporates refused to use hosted software-as-a-service, citing security, control and other such factors. Fast forward 20 years and all corporates have now migrated huge compute workloads to cloud datacenters. These things just take time.
I firmly believe that if you are in business, you either learn to take advantage of AI, or you get swept away in its wake. If you refused to engage with the personal computing revolution in the 1970s and 1980s and stuck with the Mont Blanc pen or the Remington typewriter? Your life got real tough real fast. If you shunned the online revolution in the 1990s and 2000s, your competitors got the jump on you in a big way. If you declared in the 2000s and 2010s that mobile was not useful to you because you didn't run an always-on business, well, it turned out that all business was always-on if only the technology was there to enable it.
You see where I am going here. If you think that your business or your job is immune to the incursion of AI, you're wrong. Whether you spend your working day updating low-level product catalogs for minimum wage, or you spend the working day preparing for and engaging in the highest level of law, accounting, banking, healthcare, you name it? AI is coming for you. The Internet was the most deflationary, destructive force known to capitalism - capitalism, remember, is an inherently deflationary force that seeks to erode profits everywhere in favor of new pools of profit elsewhere - and what the Internet started, AI is going to accelerate.
You think you can escape? You can't escape. Better to learn to use AI as a tool for your benefit.
Investment research is no exception. The old-line way of running a research shop, with senior and junior folks pontificating on earnings projections and stock price targets - that's already gone. It's just that anyone still running that way hasn't realized it yet. Here at Cestrian Capital Research, Inc, we've done things differently from day one; and we continue every day trying to automate more, accelerate more, now by using AI within our business to produce better research at lower cost than could otherwise be achieved.
I'm very proud to say that the first actionable output from this quest is going live in a few weeks. We'll be hosting a research service operated by Prof. Jay Urbain of Upstream Development, LLC, going by the name of SignalFlow AI, which will do exactly what it says on the tin. The proprietary machine learning sat behind SignalFlow AI is designed to identify, in real time, risk-on and risk-off periods in the market. Because it's a machine it has no emotions or qualms about doing so. It has neither fear nor greed in its soul, on account of having no soul. And from experience, operating in the manner of an automaton is the best way to invest and trade. SignalFlow AI has complex underpinnings but very simple outputs. It will flag times when it believes risk-taking is likely to be rewarded in markets, and times when it believes markets are best avoided. Initially we'll be launching this with a focus on $SPY alone; over time we'll layer in coverage of more major tickers. The outputs will be simple, easy to understand and highly actionable.
You may know Jay from his excellent Jay's Options service. You can learn more about that right here.
Want to pre-register for SignalFlow AI? Just complete the one-line form below with your email address, and we'll be in touch as the launch date gets closer. (You can also email us at minerva@cestriancapital.com if you prefer).
Thanks for reading our work - and don't forget to keep looking over your shoulder to see if the bots are gaining on you!
Cestrian Capital Research, Inc - 12 September 2024.
DISCLOSURE - Cestrian Capital Research, Inc staff personal accounts hold long positions in, inter alia, $NVDA.