From AI Hype To A New Market High
On Zero Hedge yesterday, The Market Ear wrote about how AI adoption could lead to a new market high:
Hey ChatGPT, how can AI get me to 5900 in SPX?
1. We believe the market is underestimating the productivity boost AI could deliver to a wide range of sectors
2. Blue sky scenario: rapid AI adoption could drive EPS CAGR of 7.5% over the next decade and justify S&P500 fair value of 5,900
It's worth reading the whole Market Ear report on AI at the link above, to get a sense of how that trajectory could play out, but sometimes a demonstration of a new AI capability illustrates the technology's potential in a way words and charts alone don't. Enter Suno, an AI music company based in Cambridge, MA.
Have Songs Written And Produced For You In Seconds
You pick the musical genre, include a few words as a prompt, and Suno creates songs for you. Here are a few examples I whipped up yesterday.
My Prompt:
A pop punk song about how hedging doesn't have to be a drag with Portfolio Armor, because of its security selection method picking recent winners like Super Micro Computer (SMCI) and Nvidia (NVDA).
Sonu's title, lyrics, and song:
Hedge Like A Rockstar
Lyrics:
[Verse] I'm tired of playing it safe, it's all become a drag
But then I found this method, the best I've ever had
Portfolio Armor, it knows what's gonna soar
Super Micro Computer and Nvidia, count 'em by the score
[Verse 2] No need to hedge in fear, it's time to take control
With Portfolio Armor, we'll rock and roll
No more sleepless nights, agonizing over stock
We'll pick the recent winners, like we're punk rock
[Chorus] Hedge like a rockstar, with Portfolio Armor by your side
Super Micro Computer and Nvidia, we won't let 'em slide
Hedge like a rockstar, keep your portfolio in check
With Portfolio Armor, we'll always protect
Song:
My Prompt:
A pop punk song about how hedging doesn't have to be a drag with Portfolio Armor, because of its security selection method picking recent winners like Super Micro Computer (SMCI) and Nvidia (NVDA).
Sonu's title, lyrics, and song:
Hedging Doesn't Have To Be A Drag
Lyrics:
[Verse] Feeling indecisive, can't make up your mind
Don't wanna play it safe, but you're runnin' out of time
Just take a deep breath and let me show you a way
With Portfolio Armor, you won't have to stray (oh yeah)
[Verse 2] Super Micro Computer, Nvidia too (yeah)
Recent winners you can bet on, that's what they do
You don't have to worry 'bout the market's twist and turn
With Portfolio Armor, your investments will earn (come on)
[Chorus] Hedging doesn't have to be a drag (oh no)
With Portfolio Armor, you can avoid the red flag (yeah)
Super Micro Computer, Nvidia, they're your guide (woo)
Let your portfolio soar, take it in stride (hey)
Song:
My Prompt:
An alternative, upbeat, indie song about picking winners with Portfolio Armor and using Portfolio Armor to hedge in case the market goes against us.
Sonu's title, lyrics, and song:
Sound Investments
Lyrics:
[Verse] Numbers flashing, tickers dancing in the light
I'm sifting through the market, searching for insight
Portfolio Armor, guiding me through the haze
Picking winners, finding diamonds in the craze
[Chorus] I'm hedging my bets, I won't be left in the dust
Balancing risk, finding returns I can trust
When the market goes south,
I'll be covered in green
Sound investments behind the scenes
[Verse 2] With algorithms on my side, I'm feeling strong
Analyzing data, where I belong
Portfolio Armor, my secret weapon in hand
Navigating the chaos, making a stand
Song:
One Thing Is Certain: Disruption
It's hard to imagine what impact this new technology will have on our economy. It seems like it will be rough on songwriters and musicians for commercials, television, etc., but on the other hand, it will likely reduce the cost of producing all of those things, which could drive big economic gains. A safer play here may be to bet on the "picks & shovels" companies in AI, one of which is a company I mentioned in my prompts above, Super Micro Computer (SMCI). It was our system's best performer out of our top ten names from September 21st.
Screen capture via the Portfolio Armor web app
If you want a heads up when we post this week's top ten names, feel free to subscribe to our trading Substack/occasional email list below.
If You Want To Stay In Touch
You can scan for optimal hedges for individual securities, find our current top ten names, and create hedged portfolios on our website. You can also follow Portfolio Armor on X here, or become a free subscriber to our trading Substack using the link below (we're using that for our occasional emails now).
