You're Probably Still Underestimating AI
More from our conference in Las Vegas... The future of artificial intelligence... What's not 'priced in'... 'We're clearing the land'... Rick Perry on the future of American energy... The art and science of making decisions...
'It's like drinking from a fire hose'...
This is how one subscriber described his first Stansberry Conference experience to me (Corey McLaughlin) during lunch.
Indeed, we pack so many different investing ideas into a few days at our annual conference, I still can feel overwhelmed even after attending these for years.
But this year, there is one takeaway that I don't think I'll forget for quite some time. It's the idea that despite the buzz we've heard about artificial intelligence in recent months and years... we ain't seen nothing yet. Not even close.
Former OpenAI executive and researcher Zack Kass, part of the group that launched the famous ChatGPT, left us with that impression after his presentation here at the Aria Resort & Casino yesterday afternoon...
The development of AI in the years to come, he said, will lead to our "next renaissance as a human species. And that comes with all sorts of incredible opportunity, but also all sorts of incredible cost."
The impact of AI is still just getting started...
Those of you who have read our work for long enough know we take hyperbole with a giant helping of skepticism. But the more I hear about what's going on with AI – from people who know the industry intimately – the more I think I'm underestimating its potential.
You might already use ChatGPT, which Kass helped launch in 2022 while working as OpenAI's head of "go-to market," or other AI apps. You might have heard about Apple Intelligence coming to a device near you. But that's just the start of the AI revolution, Kass said.
He laid out a timeline for three major phases of AI development that will last through at least 2035 and said the "enhanced apps" of today are part of the first phase. (For example, I keep thinking of Google with its Gemini AI as just a better search engine – for now.)
After these apps featuring AI, Kass said to expect "autonomous agents" that people will be able to assign tasks to. Next comes "natural language operating systems," which will take the form of AI-powered "wearable" technologies like eyeglasses and watches.
What's not 'priced in' today...
All of this will lead to a productivity boom that is "not priced into the market," Kass said, and breakthroughs that most people can't quite envision yet.
As one example, he expects biotech companies to make breakthrough scientific discoveries when they can put "a billion geniuses" to work on a problem rather than a single human researcher or a small group, thanks to AI...
We are about to have a massive boom in worker productivity that I don't think anyone has fully appreciated... I don't think anyone fully appreciates what an individual in this world is about to be capable of... Individuals will be much more capable of anything tomorrow than they are today.
In December of last year, researchers discovered the first new class of antibiotics in 60 years (for drug-resistant MRSA) because of AI, Kass said. In March, scientists successfully "cut out" HIV from infected cells using CRISPR gene-editing technology, aided by AI, marking a potential breakthrough in the search for a cure. Kass said...
The bio-life-science companies look very exciting right now. If you talk to these people, they are teeming with optimism. They know what's coming... Incredible things are going to happen.
Kass certainly painted a compelling picture of the future, one which most people can't quite imagine yet, suggesting cancer and neurodegenerative diseases will one day be cured. He also made the case that increased worker productivity will be a "massive deflationary event"... and that the market isn't accounting for this change. He continued...
The great savior to our GDP and debt crisis is obviously going to be technology.
I don't think we appreciate yet what is going to happen in a world where 2.5 more, or maybe 3 billion people are about to come online to join the global economy, but also where companies can do so much more with less.
And that of course begs the question, "Will a bunch of people get fired?" Maybe, and then a bunch of people can also go start companies and create value because the cost of doing that is going to come down...
This isn't to say there aren't concerns about AI – a wide-reaching catchall term for a technology whose impacts are far from fully understood even by those who know it best.
Kass also talked about the debates that will likely emerge about what machines can do versus what we want them to do. He likened it to the push and pull over nuclear energy over the years (and, ironically, again today as energy needs ramp up in part because of AI adoption and data centers that need energy to support the tech).
So, yeah, we're probably still underestimating AI's impact on the world – both in the opportunities and the challenges that will inevitably emerge. Stay tuned for more on this topic. After Kass' presentation, I sat down for an interview with him that we'll post to our YouTube page and share here soon.
Bull, bear, or B.S...
Today, our conference concluded with Alliance Day.
This is a lineup reserved for Stansberry Alliance members that included exclusive stock picks from our editors and analysts, following the annually popular "Bull, Bear, or B.S." panel – a fast-paced Q&A covering hot-button subjects related to the economy and markets.
This year, our Director of Research Matt Weinschenk fired questions at a panel that included Retirement Millionaire editor Dr. David "Doc" Eifrig, Stansberry's Investment Advisory lead editor Whitney Tilson, Extreme Value editor Dan Ferris, True Wealth editor Brett Eversole, and Crypto Capital editor Eric Wade.
They shared if they were bullish or bearish on each topic or if it was simply nonsense. Among the topics, Matt asked the group about the fact that $2 trillion is being spent on AI today...
Dan said that while a lot of the money being spent today will probably be wasted, he's bullish on AI in the long run overall. Nobody said they were bearish on the technology, and like Kass did yesterday, Eric today emphasized AI is in its really early days...
I think 98% of what we're using AI for right now has basically made my [Internet] search easier, and 2% we are using to pursue phenomenal advances in medicine...
We are still in the stage of "spend the money first and ask questions later." We're clearing the land. We're not even [in the] planting-the-seeds stage yet...
The group also discussed geopolitics, the possibility of a national bitcoin reserve, and the future of energy in America, including nuclear. Attendees also heard a fascinating take about that last point when former U.S. Secretary of Energy and Texas Governor Rick Perry took the stage...
Rick Perry is bullish on nuclear...
In brief, Perry, who was the energy secretary under President Donald Trump, said the "existential threat" of climate change is a "fallacy" and that fossil fuels will and need to be used to serve America's energy needs for decades to come.
That means oil and gas and nuclear energy, specifically small modular reactors ("SMRs"). As Perry put it...
I would suggest to you that that arena of SMRs has the greatest potential to deliver baseload, reliable, emission-free power...
Then he linked these reactors to... AI... and the data centers that are going to be "massive energy hogs." He cited deals we've recently seen in which big tech companies like Microsoft, Alphabet, and Amazon have secured future nuclear energy to power these facilities.
So, yeah, maybe we're still underestimating the impact of AI. It might be just a catalyst for major change in American energy. As Dan said, "Building all that power [for AI] might be the best thing that comes out of it."
Today, former Oakland A's general manager Billy Beane got things started...
Beane is the man whom the book and movie Moneyball were based on. At our Alliance meeting, he covered his experience as a pro baseball player and then as the front-office executive who ultimately drove a data-driven analytics revolution in baseball.
Dan's going to write more about Beane (and Perry) in Friday's Digest, so I won't say too much more. But one thing Beane said about making decisions stood out to me. It came in response to an attendee's question near the end of his session about whether Beane really didn't watch the games that he was so heavily invested in as the A's general manager...
He confirmed that and explained why. It came down to controlling his emotions and decision-making. As Beane said...
Why? Because I'm emotional. If I'm sitting there for 162 baseball games and something happened [I didn't like], I'm going to get mad. But that little micro event is really not going to have an impact on the season. However, if I make an emotional reaction and do something dumb after the game, and got mad, that move might impact the rest of the season...
This idea can, of course, apply to any decision-making process... investments included.
Another decision-making tip: Remember your breath...
That's the advice of James Nestor, author of Breath: The New Science of a Lost Art, who delivered a fascinating talk yesterday based on the research – on the health benefits of deep, slow, and nasal breathing – that he learned while writing the book.
Doc Eifrig introduced Nestor to the stage and said the idea in the book could change your life. We saw why...
Our modern world, in many ways, discourages the natural rhythms and forms of breathing that are most conducive to ideal health, Nestor explained during his presentation...
For instance, he used the term "e-mail apnea" to describe the effect of opening your inbox to find a sea of stressful messages awaiting your attention... Have you ever caught yourself tense or holding your breath during times like these?
Rather than holding our breath when we're stressed out, though, Nestor suggested we should practice "coherent breathing." Specifically, he means inhaling through the nose for six seconds, expanding your belly, then exhaling for six seconds...
When repeated for just a minute, this method is shown to reduce symptoms of anxiety and depression and to improve memory, he said. Nestor asked everyone in the conference room at the Aria Resort & Casino to try this and some other breathing exercises...
Something you can do if you want to check in... I invite you to place one hand on your belly, another on the chest. When you breathe, inhale and expand the belly and then lift that air into the chest, and let it out. That's a natural breath.
He described a litany of benefits and case studies of how proper breathing – through the nose and not the mouth – has cured various health problems in kids and adults... and how elite athletes, like marathoners and sprinters, effectively breathe only through the nose while running.
Since then, when sitting or walking around the hotel and conference center over the past day, I've been practicing. And I can tell you I've got some more work to do to breathe how the body was "designed," as Nestor said...
Whenever you are stressed out, before you have to make a big decision about a big investment you're about to make, and your brain needs to be clear, breathe this way. Spend a minute. The science has told us you'll make a better decision.
With that, we heard what might be the most unexpected (yet powerful and risk-free) investing tip of our three days here in Vegas. And we left the talk thinking... from AI to natural breathing... we have all the bases covered.
Before we go...
Tonight, we're hosting a closing reception. Dan Ferris is not scheduled to play the guitar again, but I would encourage an encore performance. He killed it last night. And stay tuned for the rest of the week as Dan and I share more of what we heard at the conference.
New 52-week highs (as of 10/22/24): Agnico Eagle Mines (AEM), Alamos Gold (AGI), Alpha Architect 1-3 Month Box Fund (BOXX), CBOE Global Markets (CBOE), VanEck Gold Miners Fund (GDX), Gilead Sciences (GILD), SPDR Gold Shares (GLD), Barrick Gold (GOLD), Honeywell International (HON), Kinross Gold (KGC), Mueller Industries (MLI), Newmont (NEM), Sprott Physical Gold Trust (PHYS), Sprott Physical Silver Trust (PSLV), Royal Gold (RGLD), Seabridge Gold (SA), Sandstorm Gold (SAND), Sprouts Farmers Market (SFM), iShares Silver Trust (SLV), Spotify Technology (SPOT), Torex Gold Resources (TORXF), Texas Pacific Land (TPL), The Trade Desk (TTD), ProShares Ultra Gold (UGL), Viper Energy (VNOM), and Wheaton Precious Metals (WPM).
In today's mailbag, feedback on yesterday's edition, which included a report on comments made during Day 2 of our conference by Terry Branstad and David Adelman – former U.S. ambassadors to China and Singapore, respectively – about U.S. and China relations today... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"I'm stunned at Adelman's and Branstad's take on China while guest speakers at the conference.
"First, with the BRICS (and friends) summit happening in Russia [at the same time] as your conference in Vegas, did Russia miss the memo on isolation? But, more importantly, China building up their military for decades to surpass ours, building 'economic' ports in our backyard, flying 'weather' balloons at will, and 'poking' some of our allies at sea certainly doesn't give me the impression China is only concerned about maintaining trade with the U.S.
"Finally, why are we now resurrecting WWII landing strips throughout the world? None of these examples scream anything about trade being the most important issue to China to me." – Subscriber Kathy D.
All the best,
Corey McLaughlin
October 23, 2024
Las Vegas, Nevada