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The challenge is that the eventual winner in the AI space might not be a company that exists today. Say that you build a portfolio that's 60% interest rate swa
by nostrademons 4y ago
The challenge is that the eventual winner in the AI space might not be a company that exists today. Say that you build a portfolio that's 60% interest rate swaps and 10% each into DeepMind & 3 other hot AI companies of the moment. In 10 years, we've solved the labor shortage, but the eventual winner is a company named ConvBrain, founded 2028. All the capital you allocated to the AI space is tied up in DeepMind and the three other incumbents, so unless you're watching the space like a hawk (in which case you might as well be employed in it), you would've missed the ascendancy of ConvBrain and picked the losers despite the space as a whole being a winner.
- darawk 4y agoAgree. You would have to keep up with changes in the space, and accept the possibility that you even if you're right about it strategically, you aren't able to make the appropriate bet, because e.g. the company that succeeds is private. However, you could try to think about ways to hedge that risk, by thinking about who benefits in ancillary ways. E.g. for instance, which firms are likely to benefit most from AI labor substitution (whether developed in house or not). There are no certainties here, of course.