There Are Many Ways to Use a Hammer

The scramble to master artificial intelligence ('AI') feels like a new gold rush...

When my mom first started in accounting, she used spreadsheet paper... Some of you might remember it. I think the only time I've come across it is when I've accidentally bought the wrong type of Moleskine.

Then, the early spreadsheet software Lotus 1-2-3 came out. Many people just used it for the simplest, most mundane of tasks... building and tracking financial statements.

But those looking to get ahead started thinking of other ways they could use it. Lotus 1-2-3 could speed up the building of complex models. Folks started building tools on top of those spreadsheets. While spreadsheet paper required manual calculations, Lotus 1-2-3 could help you build models that changed and automatically recalculated financial statements.

And all of that data could be quickly turned into charts and graphs, too. Those who pushed the software to its limit saved a lot of time.

The same logic was true for technology before Lotus 1-2-3. And the same is true for tools like AI now.

Longtime subscribers know we've been talking about the potential of AI since we launched Altimetry. In January, we declared 2023 to be the year of AI.

AI mania has taken over the stock market. Every time you open Twitter – or any other social media or news platform – you probably see millions of articles about how ChatGPT or some other tool can boost your productivity.

But most people are looking at AI the wrong way. They're not taking full advantage of the opportunities offered by this technology. Today, we'll look at some of the ways AI can actually help you become a better investor.

A lot of 'revolutionary' technologies fall flat when they're actually used...

People love to tout ways to implement the hottest new tech. They claim what they're doing is unprecedented. In reality, it's mundane...

Here's how AI can build a course program for learning a foreign language!

Here's how AI can give you a program to improve search-engine optimization for your business!

Those ideas may sound different from anything you've ever encountered. But they're really not. They're assuming the sum total of AI is just using ChatGPT as an executive assistant. If AI is a hammer, all these folks are doing is banging away at nails.

It's easy to fall into this trap... particularly when it's all you see every day. Our team at Altimetry has challenged itself to take a different approach.

Our goal is to use it to become something of an "analyst in a box." We're using AI to analyze our most successful ideas... the ones we got wrong... and the ones we missed out on.

We're also trying out tools like Hila.ai to summarize our own content and presentations – such as Joel's recent interview with Daniela Cambone of our corporate affiliate Stansberry Research – in bite-sized pieces.

That brings me to a strategy that any investor can leverage. Our employees are using Google's Bard and OpenAI's ChatGPT to help them more quickly understand the companies we're researching.

We create prompts and queries to frame how these AI tools should explain businesses to us. We use those frameworks to ask questions the right way.

Almost any research can be accelerated with the right tools...

Don't fall into the trap of using AI as a simple "lesson planner" or executive assistant – even though it may be incredibly robust in those roles.

If you want to use AI in your own research, start with things that actually take up time. This technology can do a lot to make you smarter, faster.

That means you don't want to ask it to "build me a framework for analyzing companies."

Instead, ask it specific questions about companies like Google parent Alphabet (GOOGL). Instruct it to "break down the segments of Alphabet's business for me and explain the competitive advantages of each. Order them from the segment with the most profit to the least."

Then, ask follow-up questions about the segments it broke down. When it explains that Google Services is the largest segment, ask it a question like... "What are the competitive advantages that make Google Services so successful, and what are the biggest risks to this business?"

You may be able to answer those questions about Alphabet yourself. But there are plenty of companies you can't do that for.

Think of AI as your research assistant. It can do a lot of the legwork for you... to help you learn about the most important aspects of a company.

Regards,

Rob Spivey
June 23, 2023