I've got modest positions in GOOGL, MSFT.
I've got a bit more than 5% of my portfolio in semiconductor and related stocks: KLAC, LSE:SMSN, MTRN, AOSL, ASYS, AMKR, TRT, SCIA. I'm likely to buy more sometime in the next year, but I'm being patient because we're likely at a poor part of an industry cycle.
Robotics seem likely to benefit from AI. I suspect the main winners will be companies that aren't yet public, as I'm not too impressed by the opportunities I see so far. I'm playing this mainly via tiny positions in LIDAR companies (INVZ, OUST, LAZR) and SYM.
I have a modest position in OSS.
I tried to invest in Conjecture, but they don't seem interested in small investors.
I don't use twitter because social media use seems like a losing strategy for living in the world over the next 10 years. Is there any alternative such as an email newsletter?
I am surprised this is posted and even upvoted on lesswrong, the format of the post looks like something found on reddit user post .
Someone buys a coin at an extreme low price and got out exactly at top [no rationale explained what so ever on how they did it ] , made money and they want to share the knowledge to the world and now advising in stocks (surprisingly all mainstream)
Samsung is a memory play, not a TSMC competitor. Logic semiconductor is what Samsung hopes to do in the future, it is not how they make money now. In my opinion, Samsung's technical lead in memory is no less than TSMC's technical lead in logic. And transformative AI will require memory as much as CPU, GPU, and TPU.
One possible options play is puts on shutterstock, since as of about 2 weeks ago midjourney got up to a level where you can for a pittance replicate the most common and popular stock image varieties at an extremely high level of quality. (E.g. girl holding a credit card and smiling).
I think the most likely way this shakes out is adobe integrates image generation with figma and its other products, leaving "buying a stock image" as an increasingly niche and limited option for people who want an image to decorate a thing where they aren't all that particular about what the image is.
Primary question to me is on what time scale the SSTK business model dissolves in, since these changes take time.
I continue to like TSLA.
The 50% annual revenue growth that they've averaged over the last 9 years shows no signs of stopping. And their earnings are growing even faster, since turning positive in 2020. (See fun visualization of these phenomena here and here.)
Admittedly, the TTM P/E ratio is currently on the high side, at 50.8. But it's been dropping dramatically every quarter, as Tesla grows into its valuation.
The 50% annual revenue growth that they've averaged over the last 9 years shows no signs of stopping
What makes you think that?
I am of the completely opposite opinion, and would be amazed if they are able to repeat that even for a single year longer.
All the "creative" bookkeeping only work for so long, and right now seems to be the moment to pop bubbles, no?
What makes you think that?
If we just look at the next year, they have two new factories (in Berlin and Austin) that have barely started producing cars. All they have to do to have another 50-ish% growth year is to scale up production at those two factories.
There may be some bumps along the way, but I see no reason to think they'll just utterly fail at scaling production at those factories.
Scaling in future years will eventually require new factories, but my understanding is that they're actively looking for new locations.
Their stated goal is to produce 20 million cars in 2030. I think that's ambitious, but plausible. And I wouldn't be too worried about my investment if they're only at 10 million in 2030, or if it takes them until 2033 to reach 20M.
but I see no reason to think they'll just utterly fail at scaling production at those factories
Oh they'll scale just fine.
It's just that nobody will buy all those cars. They are already not selling them all, and we are about to enter the biggest recession of many of our lifetimes
It's just that nobody will buy all those cars.
Why would this be true?
Teslas are generally the most popular car in whatever segment they're in. And their automotive gross margins are at 25+%, so they've got room to cut prices if demand lightens a bit.
Add to this that a big tax credit is about to hit for EVs in the US and it's hard for me to see why demand would all-of-a-sudden fall off a cliff.
Worth noting 11 months later that @Bernhard was more right than I expected. Tesla did in fact cut prices a bunch (eating into gross margins), and yet didn't manage to hit 50% growth this year. (The year isn't over yet, but I think we can go ahead and call it.)
Good summary in this tweet from Gary Black:
$TSLA bulls should reduce their expectations that $TSLA volumes can grow at +50% per year. I am at +37% vol growth in 2023 and +37% growth in 2024. WS is at +37% in 2023 and +22% in 2024.
And apparently @MartinViecha head of $TSLA IR recently advised investors that TSLA “is now in an intermediate low-growth period,” at a recent Deutsche Bank auto conference with institutional investors. 35-40% volume growth still translates to 35-40% EPS growth, which justifies a 60x-70x 2024 P/E ($240-$280 PT) at a normal megacap growth 2024 PEG of 1.7x.
And this reply from Martin Viecha:
What I said specifically is that we're between two major growth waves: the first driven by 3/Y platform since 2017 and the next one that will be driven by the next gen vehicle.
It's just that nobody will buy all those cars. They are already not selling them all, and we are about to enter the biggest recession of many of our lifetimes.
I do think we will be in a mild recession unless the Fed does a soft landing, but the economy is actually okay. So this recession will be much milder than previous recessions.
Btw, some of the best sources of information on TSLA, in my view, are:
Rob is a buy-and-hold retail trader with an optimistic outlook on Tesla. I find him to be remarkably evenhanded and thoughtful. He's especially good at putting daily news stories in the context of the big picture.
Gary comes from a more traditional Wall Street background, but is also a TSLA bull. He tends to be a bit more short-term focused than Rob (I presume because he manages a fund and has to show results each year), but I find his takes helpful for understanding how institutional investors are likely to be perceiving events.
From a pure technical perspective, I'd bet that some of the ocean-based pumped energy storage companies are going to make a lot of money in 5-10 years. I think dealing with saltwater is a solvable problem here and they're just going to dominate pneumatic pumped storage or thermal batteries for coastal markets, because of higher efficiency. Not quite semiconductor though, except if as you count them as a dependent of solar and solar as semiconductor :P
Updated my 'diversified' portfolio for this:
MSFT - 10%
INTEL - 10%
Nvidia - 15%
SMSN - 15%
Goog - 15%
ASML - 15%
TSMC - 20%
any acceptable outcome to TAI would make investments irrelevant; why waste your time with investments in an economic system that must be replaced for the future to contain humanity? money is much better spent on direct action than on others' projects, as though hoping your stockholder contracts will still be honored after strong TAI causes sudden hyperinflation of all previous currencies. It is absolutely critical that TAI come with a new currency that causes this hyperinflation, and associated guarantees that all humans get a basic income of the new "ai outcomes" currency. as things are looking, people doing "investment with guaranteed payout contracts" are likely to be a major force that ensures that any attempted alignment research is simply used to prevent ai from being aligned with customers, in order to maximize control of customer behavior, and this will then destroy the investors as well. don't invest in projects that have that pattern!
It doesn't seem to be the safest to be too sure how the future will go. Id recommend hedging for whatever possibilities you can.
And: having a lot of capital could be very useful in the run up to TAI. Eg for pursuing/funding safety work.
Generally yes. Though you can treat this post as a sort of hedge - your basic hope would be that current markets become irrelevant, but on the off chance that they get captured into some kind of dystopian megacorp type thingy, you might as well own some stocks in whoever wins. It's also a way to ride the wave before TAI, depending on your timelines.
I don't think i ever heard about tesla doing LLM stuff, which seems like the most relevant paradigm for TAI purposes. Can you elaborate?
While NVDA is naively the most obvious play - the vast majority of GPU-based AI systems use them, I fail to see why you'd expect it will outperform the market, at least in the medium term. Even if you don't believe in the EMH, I assume you acknowledge things can be more or less priced-in? Well, NVDA's such an obvious choice that it does seem like all the main arguments for it are priced-in which has helped get it to a PE ratio of 55.
I also don't see OpenAI making a huge dent on MSFT's numbers anytime soon. Almost all of MSFT's price is going to be determined by the rest of their business. Quick googling suggests revenue of 3m for OpenAI, and 168b total for MSFT for 2021. If OpenAI was already 100 times larger I still wouldn't see how a bet on MSFT just because of it is justified. It seems like this was chosen just because OpenAI is popular and not out of any real analysis beyond it. Can you explain what I'm missing?
I do like your first 3 choices of TSM, Google and Samsung (is that really much of an AI play though).
I actually think you can get an acceptable picture of whether something is priced in by reading stock analysts on the topic, since one useful thing you can get from them is a holistic perspective of what is on/off the radar of finance types, and what they perceive as important.
Having done this for various stocks, i actually do not think LLM-based advances are on anyone's radar and i do not believe they are priced in meaningfully.
I've been writing about investing and the EMH [1] on lesswrong/rat-discord/ea-facebook/etc. I made the first 'buy solana' post on the EA investing group when it was under 2 dollars in late 2020 (it peaked at 260 in 2021). Despite crypto crashing and FTX stealing user deposits I got my money out and I've had a very good two years investing. Post tax I multiply my net worth by about a factor of eight; my starting net worth was not small. My income during this period wasn't significant compared to my portfolio size. However some friends really wish I had been posting more systematically. I 'sold the top' but many people I got into Solana didn't. So me and some friends are going to regularly post on twitter. Please follow us [2] if you want updates systematically!
Anyone who thinks AI is going to be transformative should allow this to inform their investing. Im interested in how lesswrong is investing! Here are some brief thoughts on stocks we like for this purpose, mostly semis:
1) TSM - Significant technical lead on other semi-conductor companies. Only close competitor is Samsung. PE ratio of 17! Probably the most important company in the world right now. Only downside is risk China invades Taiwan. Pure semis play.
2) Google - Owns Deep Mind and Google Brain. Huge piles of money and data to train AI. PE of 19. Downside: Ad revenue slipping.
3) Samsung - Only serious technical competitor to TSM. Insanely low PE of 8.58. Downside: not a very pure semis play.
4) Nvidia - Still the leader in designing GPUs. In house AI research. Downsides: Doesn't manufacture their own chips, high PE ratio of 55.
5) ASML - Makes hardware for semi-conductor fabs. Almost a monopoly in lithography. Downside: pretty high PE 36+.
6) Intel - Still does good work designing chips. Huge struggles to manufacture sub 10nm chips in-house (TSM and Samsung have 3nm in production). Committed a ton of fraud. However the US government is wisely trying to increase domestic semis production and Intel is a US Company.
7) Other stocks I'm considering: Microsoft (open AI), Micron (memory play), Meta (just released diplomacy AI, priced attractively right now?), Tesla (good in-house AI).
This is a good article by @asteriskmgzn is quite good. https://asteriskmag.com/issues/1/china-s-silicon-future
Notes:
1) Please be good rationalists and don't argue about the EMH. If you believe in the EMH just don't post.
2) We choose the name 'Dickgirls Research' because all the founders are transgirls and its a hilarious name in our opinion.