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How to structure a portfolio if you’re investing in AI

Sep 29, 2023

Good morning! 👋

Stocks have gotten a nice bump in early going after Friday’s personal consumption expenditures index reading, which shows that inflation rose “less than expected.”

The resident smart-aleck in me wants to know “less than who expected,” but there’s no need to go down that path.

What matters this morning is what we—you and I—are going to do about it.

Hopefully, you’ve been accumulating shares in the great companies we talk about frequently.

If you have, chances are you’re smiling because you know that getting anything on sale from groceries to shares is a good thing. If you haven’t, there’s still plenty of time to get started.

Meanwhile…

Here’s my playbook.

If you thought Clippy was bad…

Remember Clippy, Microsoft’s annoyingly chippy, ostensibly helpful paperclip?

Now there’s news that Snapchat and Microsoft are partnering with an AI chatbot that is going to begin testing sponsored links in My AI. (Read)

Personally, I hate the idea because AI is one of the few areas of the internet I can use without being bombarded by advertising, click-here’s, and my personal fav (dripping with all the sarcasm I can muster), “helpful suggestions based on my preferences.”

Professionally, it’s probably good for another few points top line. My guess is, advertisers are going to push hard into this market because it’s yet-untapped territory.

Now the real question is… what will El Zucko do?

How to balance a portfolio in today’s markets if you want to invest in AI

I stopped by for a wonderful chat with the folks at CNBC International who asked me how to handle portfolio construction in today’s complicated markets, particularly if you want to invest in AI.

The answer might surprise you. (Watch)

Gold at Costco: Is it worth it?

Looks like I was not the only one who flagged this. (Read)

Costco is selling gold bars, and they’re selling out faster than an 8-foot Teddy Bear or a 72-pound wheel of Parmigiano Reggiano, both of which the company also sells.

Apparently, the gold comes in packed, individually controlled, regulated, and registered CertiPAMP package along with an Assay Certificate, which is good. But you cannot learn the actual price or buy one unless you are a member.

Naturally.

My question is, what are the margins and markups?

I suggest you give my friends at Asset Strategies International a call if you’re interested in learning more about gold. I’ve known the company’s principals for years, and there is no doubt in my mind you’ll be treated properly, fairly, and professionally.

Could this gaming deal unleash a new wave of M&A?

Ubisoft CEO Yves Guillemot believes that “in the next five to 10 years, many games will be streamed and will also be produced in the cloud,” according to a report in the Financial Times. He also compares the way that Netflix was widely criticized at the start of their streaming journey with how many people may see his ambitions of incorporating streaming into the gaming industry. (Read)

I think he’s onto something, especially since he’s partnering with—you guessed it—Microsoft.

This is a revolutionary idea, for a couple of reasons.

Cross platforms play: This will allow gamers from different platforms like Xbox or PlayStation to play together more effectively, which will bolster gaming communities and increase the hours spent playing these games (and the advertising dollars spent attracting their eyeballs).
Game libraries: Cloud gaming can allow players to stack an extensive library of games—and of course, if they can store more games, they can buy more games. This can have a direct impact on profits because there often isn’t a connection between the money spent and gaming, like there is when consumers fork over cash. This is the same reason credit cards are so deceptive to so many.
Democratizing game development: Smaller game developers may have an easier entry, which creates additional competition and new value that can be created at a keystroke. The first company that gets this right will probably rule the roost for a long time to come.

I may need to start looking at gaming developers again.

Hmmm.

I’m still with Jamie: 7%

JPMorgan CEO Jamie Dimon is very concerned about rates and, IMHO, quite rightly. (Read)

While it’s tempting to focus on the 7% figure he mentioned recently as reported by the Times of India and Fox Business, that’s not what he’s really driving at.

Dimon is concerned about the impact of “the next two points,” meaning the jump from 5–7% if it happens.

I share that opinion because I believe the Fed will hike twice more… once prior to the end of the year and another time in Q1 2024.

That said, the time IS coming when it’ll be appropriate to bet on rates going down.

U-rah!!!

If you’ve got this covered, that’s fabulous and my hat is off to you. If not and you’d like some help, I’d love to toss my hat in the ring. Upgrade to Paid

I’m currently researching a few ideas and will be sharing those with the OBA Family shortly if things pan out like I think they will. 😊