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Worthy AI Article

edited February 24 in Fund Discussions
For anyone interested in AI investing, here is one of the more worthy articles I've read on the topic recently. Worthy, that is, from the perspective of identifying the likely suspects for our AI investment dollars.

https://www.marketwatch.com/story/after-nvidias-latest-blowout-here-are-20-ai-stocks-expected-to-rise-as-much-as-44-c13c0d4a?&mod=home-page

Subscription may be required. If anyone can assist me on a workaround for that, happy to oblige!

As I trust many know, our AI investments of choice are FSELX and NVDA.

But we are looking at AIQ - Global X Artificial Intelligence & Technology ETF (includes META exposure we are lacking), as a possible trade/additional holding. Unlikely at this time, but being watched.

BOTZ - Global X Robotics & Artificial Intelligence ETF is not being considered due to its heavy NVDA allocation - full up there!

Disclaimer: I am NOT promoting or suggesting AI investments - just passing along a worthy list of options to those who may be so inclined.

So puhleeease hold any/all disparaging remarks about me, AI investing, Mag 7, or anything else that's upsetting you today!

Conversely, constructive comments on these options, the underlying purpose of this thread, would be greatly appreciated. TIA!

Comments

  • edited February 23
    I haven't examined the holdings of those etf's.

    I do think there will be more to AI than chips or servers.

    Here is a dinky linky to a back test of FSELX versus FSCSX.

    That reinforces my non-expert opinion formed after reading nearly forty years of the business pages of the SF Chomicle covering a nearby valley. Chips and servers are stuff. And, ISTM, stuff doesn't always hold up quite so well.

    I recently added a small slice of SMH to the taxable. I already held a larger slice of FSCSX. But your comments got me to thinking it wouldn't kill me to have a chip slice.

    I also own a tech dividend fund, maybe not the best one. But I think some parts of the tech world are approaching the status of utilities or consumer durables. I wanted to be there when that happens.

    YMMV

  • @WABAC. …several excellent points

    -I do think there will be more to AI than chips or servers.
    ….of course, and we’re only starting to see the very beginnings. The most valuable companied will be those who leverage AI for streamlining operational efficiencies. My background is in health sciences, and companies are seeing the data warehouses created from 10s of thousands of clinical trials tapped to make clinal trials more efficient, and to identify target molecules based upon past trial results. Pretty amazing advancements.

    -Chips and servers are stuff. And, ISTM, stuff doesn't always hold up quite so well.
    ….indeed, but at the moment, NVDA appears to be in the driver’s seat for the “stuff” needed for a transition from CPU processors to GPUs. Very little competition, and endless demand. For now. Once this demand is appropriately satisfied, then the companies who most effectively tale advantage in your first comment I noted will be the ones everyone’s talking about.

    https://www.cascade.app/studies/how-nvidia-dominated-the-graphics-processing-space-with-its-strategy
  • @PRESSmUP, IIRC, the move to GPU's started with "mining" bitcoin, and stuff like bitcoin. If my memory is correct, it's interesting to me that "mining" never moved the chip market the way AI has.

  • edited February 24
    @WABAC:
    Great comments about "stuff" and NVDA's stuff is clearly different and dominant at this point.

    AMD is the other company that I note is being widely identified as the one company that may be the first to truly challenge NVDA's top spot. So we are watching AMD as a possible trade or LT holding.

    Here's one of the most recent articles I've read on all that:
    https://www.marketwatch.com/story/nvidia-is-the-magnificent-1-now-but-these-rivals-are-closing-in-3a382a8b?mod=home-page

    Excerpt:
    The competition isn’t singular either. While Advanced Micro Devices Inc. AMD, -2.94% CEO Lisa Su has launched the most direct competition to Nvidia’s high-performance GPUs — citing a forecast of around $4 billion for the AMD’s new MI300 GPU — the competition is coming from an array of places that include a number of Nvidia’s largest and most important customers.

    See also:
    https://www.yahoo.com/finance/news/magnificent-seven-stock-poised-most-091400084.html

    Excerpt:
    Nvidia's success is also attracting competition. Advanced Micro Devices, for example, argues that its newest AI chips are as good as Nvidia's. "Magnificent Seven" members Meta and Microsoft are two large customers that plan to use AMD's chips to reduce their reliance on Nvidia. Several of Nvidia's big customers are developing their own AI chips as well.

    =====================================

    And thanks for the "dinky linky" comparing FSCSX to FSELX, two funds we know very well.

    Both funds incepted on 07/29/85.

    FWIW, we were enamored with both since their inceptions but at that time somewhat favored FSCSX. But unable to pick one at that time that we thought would be the best LT, we decided to venture into both as Core positions at about 5% each.

    That was pretty much my MO for many years - if I couldn't decide between two options, BUY both. That resulted in us owning about 2x (and more) as many funds as we now own! That all began to change for us about a decade or so ago when we started to whittle down our funds to the current baker's dozen.

    FSELX began to outpace FSCSX about 10 years ago. We decided to consolidate those two positions, and don't ask me exactly how!, chose FSELX for a 10% Core holding at about that time. In retrospect, truly one of my "blind squirrel" getting lucky moments!

    If you adjust your chart for the past 10 and/or 5 years, you will see vastly different TR performance. That said, I was kicking and screaming as we dropped FSCSX, but our methodology/strategy had changed and we parted ways with it and several other old, LT favorite OEFs.

    So, for better or worse between the two funds, we chose to ride with FSELX and are continuing that MO currently. When FSELX rises above 10%, we shave it and spread its gains to broader based tech holdings. On the flip side, after it suffers one of its inevitable BIG DROPS, we routinely ADD to it to bring it back to ~10%. The former has been happening a bunch more than the latter over those years!

    While the other AI options noted in the OP article are intriguing to us, we just can't muster enough drive to ADD any of them. Really hoping for some more comments/analysis on them to get a better feel for which, if any, are worth venturing into. If/after you examine their holdings, please share your thoughts on them here! TIA!
  • edited February 24
    Of the ETF's on the Marketwatch list, three are one of my odder watch lists: WTAI and IRBO were both in the red this week. Both are barely showing a pulse YTD. The water ETF's I have on my list have easily out-performed them. EVX and GRID out-performed them.

    BOTZ did ok this week, but it's no SMH.

    Of the funds on my watch list that might be included in AI, only TINY and IQM are within site of SMH YTD. IQM looks like a dog's breakfast to me. BOTZ is ahead of the 500 YTD, but looking up at IQM.

    I can't remember why FSELX is not on that watch list. I do have it on another more generic sector watch list. And I can see that I went for FSCSX for the relatively low SD and Beta for the tech category. I did add SMH to the taxable. But I'm trying to trim things down in the IRA, so no chip plays for me there.
  • edited February 24
    Not to digress but I would put Sector or Industry bets in IRA (rather than taxable) as sectors go in and out of favor and also one may have, as Stillers does, a max limit on sector bets, requiring trimming. Broad based ETFs such as QQQ, SPY, and even Quality factor in taxable. Similar to Sector (industry) bets, I would not put other factor ETFs in taxable.
  • Hi @stillers Thank you.
  • catch22 said:

    Hi @stillers Thank you.

    For the thread?
  • Yes sir.....
  • This link is directed to Nvidia from last August. I can't find a recent video from Bloomberg providing similar current information regarding cost and sell pricing. Yowee !!!

    Let this snippet sink in:
    Nvidia is raking in nearly 1,000% (about 823%) in profit percentage for each H100 GPU accelerator it sells, according to estimates made in a recent social media post from Barron's senior writer Tae Kim. In dollar terms, that means that Nvidia's street-price of around $25,000 to $30,000 for each of these High Performance Computing (HPC) accelerators (for the least-expensive PCIe version) more than covers the estimated $3,320 cost per chip and peripheral (in-board) components. As surfers will tell you, there's nothing quite like riding a wave with zero other boards on sight.

    Kim cites the $3,320 estimated cost for each H100 chip as coming from financial consulting firm Raymond James. It's unclear how deep that cost analysis goes, however: if it's a matter of pure manufacturing cost (averaging the price-per-wafer and other components while taking yields into account), then there's still a significant expense margin for Nvidia to cover with each of its sales.
  • edited February 25
    Disclaimer: I am NOT promoting AI investing or any of these specific ETFs or stock. Just providing information for discussion while personally trying to identify AI opportunities.
    =========================

    Here are two pretty comprehensive Investopedia pages:

    Generative AI
    https://www.investopedia.com/generative-ai-7497939#toc-the-bottom-line

    How To Invest in AI
    https://www.investopedia.com/how-to-invest-in-ai-7504987

    Excerpt (Bold added):

    Best AI ETFs

    iShares Exponential Technologies ETF (XT): XT is a large capitalization fund that selects global stocks trying to disrupt their industries. The disruption also includes AI technology stocks, which make up nearly half of the fund. The other half of the fund invests in healthcare and industrial stocks, which are also actively looking at how AI might make an outsized difference in their more mature industries. This fund has an expense ratio of 0.46% and an annual dividend yield of 0.70%.

    Defiance Machine Learning & Quantum Computing ETF (QTUM): QTUM has only $112 million under management. The fund invests in companies looking to commercialize their research and development in quantum computing systems. Its benchmark is the BlueStar Quantum Computing and Machine Learning Index. This fund has an expense ratio of 0.40% and an annual dividend yield of 0.45%.

    ROBO Global Robotics & Automation Index ETF (ROBO): ROBO invests in companies focused on robotics, automation, and artificial intelligence and invests in both growth and value stocks. The fund’s expense ratio is 0.95%, and it has an annual dividend yield of 0.17%.

    ========================
    And also here's a Motley Fool article that looks at

    Excerpt (Bold added):

    Best AI ETFs to buy in 2024

    Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ)
    ROBO Global Robotics and Automation Index ETF (NYSEMKT:ROBO)
    iShares Robotics and Artificial Intelligence ETF (NYSEMKT:IRBO)
    First Trust Nasdaq Artificial Intelligence ETF (NASDAQ:ROBT)


    https://www.fool.com/investing/stock-market/market-sectors/information-technology/ai-stocks/ai-etfs/
    ------------------------
    MF has also identified PLTR as
    A Once-in-a-Generation Investment Opportunity: 1 Artificial Intelligence (AI) Growth Stock to Buy Now and Hold Forever

    https://www.fool.com/investing/2024/02/23/a-once-in-a-generation-investment-opportunity-1-ar/

    I am clearly NOT a T/A guy, BUT I do mess around with them. PLTR's chart is an interesting one, with a parabolic rise at the beginning of Feb, which has partially been worked off since. May have just identified a candidate to consider for a play. That said, analysts are broadly DOWN on this pup!
  • edited February 25
    On Motley Fool and Palantir see also

    https://www.fool.com/investing/2024/02/24/will-hot-ticker-be-a-trillion-dollar-stock-by-2035/

    At the end of their discussion, MF said:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them.
  • edited February 26
    Yep, that is MF's standard statement at the end of their FREE articles, similar to Zack's and many others, made in an attempt to entice reader's to buy their premium services.
  • I don't know why but this discussion is bringing back some really old memories, especially about devices. For example, between 1988 and 1990 I received my first "transputer" board and proceeded to tackle the "OCCAM" programming language. About the same period of time, I sat on a board recommending our local hardware engineering wiz for a special promotion and salary after he designed and built a board presumably using neural network connections of a few layers. The transputer designs actually did get embedded in some instrument intelligence real-world designs and I think the engineer got his promotion and future funding. I left for a new position in 1990 and did not keep up with these isolated efforts at AI-in-a-box replacing the need for human expertise.

    And today's discussion really does make me feel so, so obsolete.
  • edited February 26
    Great story @Anna. And we trust you are anything but obsolete!

    If I may add one on devices...

    Circa Spring 1977, Senior Year UG finals. Of all the challenging accounting major courses I took, there was nothing that compared to Business Statistics. The subject was SO difficult that we were always allowed Open Book Policy while taking exams, including the Final.

    Factorials were the dastardly element that NOBODY seemed to be able to get their heads around, and I went to a great accounting school that produced some incredible talent. Even with our books wide open, we'd spend excessive amounts of time trying to calc factorials.

    But lucky me. For Xmas 1976, my beloved got me a crazy new device, a Texas Instrument hand-held calculator. Say what? What does it even do?

    I lugged it around for a few months without really using it, its newness, my skepticism and all. But lucky for me, it had a factorial button that I discovered right in the middle of that Business Statistics final LOADED with factorial calculations!

    "Do I use it? Doesn't seem fair," I thought.

    But then I thought, "Will I ever use or even know what a factorial is after I leave this classroom?"

    I answered "No" to that question, and Cha-ching! Aced that puppy and NEVER once in my 35+-yr accounting career was the term factorial even spoken.

    Without looking, anyone know what one is?
  • @stillers I imagine many MFO-ers are acquainted with factorials, if only from their days in college. Google gets a lot of hits for a search for real world applications of factorials. I always tried to climb an optimal hill rather than investigate all permutations, but I guess permutations are critical to some fixed sized problems.

    My first calculator was also a Texas Instruments, but all the with-it guys had HPs with magic reverse-notation. I really felt both grateful and jealous.
  • I know what factorials are in mathematics generally (physics major here); is it different for accounting? Meanwhile, us oldsters didn't need no calculators; we had sliderules!








  • Nope, same item in all fields.

    BTW, I'll see your slide rule and raise you two protractors!
  • Well, then calipers and compasses to you, sir!
  • Ugh...I fold!
  • Good; I'm out of moves!
  • edited February 26
    Math* remains a four-letter word to me. In every way. ;)

    * other than HS geometry, where I got A's constantly
  • @rforno - How interesting. Exactly the same thing here.
  • beebee
    edited March 4
    Podcast and article on Amazon’s warehouse use of robots.

    Article:
    amazon-warehouses-provide-glimpse-of-workplace-humanoid-robots

    Podcast:
    jonathan-hurst-of-agility-robotics
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