Hi Multis
Last week, the title of the Overview Of The Week was “We Are Soooo Back” as I was back from my vacation in Sardinia. But...
On Wednesday, I’m already off again. It’s a bit ironic, isn’t it?
This time, I’m going to Dublin, to Investicon. If you happen to be there as well, please come say hi to me.
There are many reasons I’m going, but one of them is that I can meet one of my investing heroes, David Gardner.
I’m not sure if I’ll be able to talk to him (I hope so) but I know for sure I can listen to him. That’s not the only reason I go. It’s also to meet some people and exchange ideas about the stock newsletter business.
Now, does that mean you won’t get any new articles in the upcoming week? No, not at all. To the contrary.
I have been researching stocks quite a lot recently, as I mentioned a few times in our community and in the Overview Of The Week. That crystallized in a new pick.
It will be released in the first part of the week. Those articles go deep and that means they are a ton of work. I'm still working on it and I don't know how much time I will need, but I'd love to publish before I leave to Dublin.
If you don’t want to miss it and you are not a paid member, subscribe now!
I don’t know how much time I’ll have to write for the rest but I will be back for next week’s Overview Of The Week.
Articles In The Past Week
This is the fourth article this week. Let’s look at the three previous articles.
On Monday, I added to my PM Forever Portfolio. In this article, you can find what I bought.
In the second article, I analyzed the Mercado Libre earnings.
The third article was an analysis of Tempus AI. Is the stock still attractive after the big surge, partially caused by the Moderna news this week? You find the answer here.
Memes Of The Week
Two memes this week.
This is the first.
This one was shared with me by multiple people.
Interesting Podcasts Or Books
This week, I listened to two episodes of Invest Like The Best.
First, I listened to the episode with Ben Thompson of Stratchery.
He had an interesting story about AI. Almost 90 minutes long, but not a minute too long. You can listen to it here.
I also listened to the episode with Gavin Baker. He is Chief Investment Officer and Managing Partner of Atreides Management. That hedge fund has $7 billion in assets under management. Before Baker started it, he was a portfolio manager at Fidelity and did very well with his deep knowledge about semiconductors and tech. He talks about the state of AI investing. You can listen to this episode here.
The markets in the past week
Sometimes, there’s a discrepancy between your portfolio and the indexes. That’s why I find it interesting every week how the indexes did.
As you can see, the indexes were down. The S&P 500 lost 1.43%, the Russell 2000 1.65% and the Nasdaq 2.05%.
The Greed & Fear Index dropped from GREED to NEUTRAL.
Quick Facts
1. The Robots Are Coming!
This week, I saw this graph.
The robots are coming and the estimates grow hard.
Of course, as an investor, and especially of growth stocks, you have to follow such trends. Right now, I don’t see a great way to invest in robots, except for Tesla, but there, the robo optimism is probably baked into the stock price. If you have ideas in this space, feel free to let me know!
This is especially interesting because the second technology is often even more decisive than the first. What I mean is that LLMs are great and such, but I don’t think they will change the world as much as something that has an impact in our day-to-day personal life. The internet paved the way for the smartphone and that changed our lives much more than the internet had already done.
I think that robots will be much more decisive for AI than LLMs. It’s the real-world application of AI. As with all things, that will bring good and bad things with it.
2. The Biggest User Of AI Tokens? AI Agents!
a16z, the famous venture capital company Andreessen Horowitz, published this chart this week.
This is pretty crazy to see. Because if robots will have a big impact on our daily lives, agents have that potential as well. I would love to have fully personalized AI agents that know me and what I want.
We don’t have that yet, but as you can see, the number of AI agents has exploded and their consumption of AI tokens as well. They now use almost 5x more tokens than humans.
That also means that what many say is wrong. There is no AI bubble. The infrastructure companies all say they have contracts for 5 years out. Not at a fixed price, mind you. The customers just want to make sure they have supply. Right now, companies like Micron and Nvidia can’t make enough chips to satisfy the demand. If you think that will suddenly drop off a rock, you probably don’t follow this closely.
And yes, I know open models are taking market share. Here’s the chart of token use of open-source models vs OpenAI and Anthropic.
Some see the ramped-up use of open-source models as a sign of oversupply. Please, don’t share this opinion. It shows huge ignorance. For many open-source models, you even need much more tokens, from 1.5x as many to as much as 10x for simpler tasks. The difference is that you don’t have to pay Anthropic or OpenAI so much for their premium models.
More and more, agents route tasks to the optimal model. For simpler tasks a cheaper model, for the most complex problems, the frontier models. But they all need chips. A ton of chips. That’s why I think the current pessimism you hear (and I have been hearing for three years) is too early. For memory, we are only in the first year of the cycle. It can easily take 5 or 6 years in total. And yes, I’m fully aware that’s long, a so-called supercycle, but this is one if I ever saw one.
The only caveat is that if there are restraints, people get creative and maybe someone comes up with an alternative or a workaround for the (memory) chip shortage. If that’s not the case, I don’t see any indication that companies like Micron will continue to benefit from the huge demand.
A new pick is coming in the next few days. So, it’s time to join!
Below: what the agents are telling us, an accidental leak, and much more.