GM, readers! I’m Phil Rosen. It’s great to see you on a Saturday.
As you’ve likely seen, artificial intelligence has been the talk of the town.
I caught up with Shark Tank star Kevin O’Leary to get his thoughts on the burgeoning tech trend and how he plans to play the market in 2023.
Kevin O’Leary is the chairman of O’Leary Ventures, a media personality, and veteran investor. This conversation has been lightly edited for length and clarity.
Phil Rosen: You told me that you’re in talks for a potential stake in ChatGPT creator OpenAI. What are you looking at there?
Kevin O’Leary: I’m looking at the ChatGPT deal right now from an equity perspective, deciding what allocation I want to put into it. I’m very fortunate to be offered a piece of it.
Whatever portfolio that position goes into, if we take a position, it won’t be more than 5% of it. Either it’ll have a good outcome or it won’t, but I won’t take down the ship or sell the farm for it.
I know there’s going to be a lot of competition and a lot of disruption, but I certainly like always to have a piece of the first mover.
What does ChatGPT mean to legacy search giants like Google?
KO: ChatGPT certainly is a threat to Google, and Google must know that.
The market hasn’t really punished Google stock for this. But a few quarters from now, if ChatGPT really starts to bring in significant subscriber fees, then we’ll see what happens.
Now I’m splitting my search to 50% Google and 50% ChatGPT. Loser is Google. The AI search wars are on.
How much of your portfolio will you allocate to artificial intelligence investments?
KO: Our plan is to probably give artificial intelligence a 3.5% weighting by the end of the year.
AI is sort of the new, hot kid on the block, like the internet was 20 years ago. This is the next thing, and what you learn with next things is that it’s often best to invest in the first mover and sit back and watch.
And here are the top stories from markets this week:
1. Some of the biggest firms on Wall Street are warning their clients not to trust the stock market rally. There’s still trouble on the way for the US economy and corporate earnings, which could punish over-enthusiastic investors. Here’s exactly what the pros are watching.
2. This strategist said you can tell the stock market surge is out of steam because the dollar’s no longer on the retreat. “We don’t think there’s a ton of downside for the dollar, and if there’s not a lot of downside for the dollar, it’s tough to see a lot of upside for equities,” Jonathan Krinksky said. Get the full details.
3. Bank of America warned that Hasbro continues to destroy “customer goodwill” in diluting the value of Magic: The Gathering. Analysts reiterated their “Underperform” rating for the company, noting that it’s trying to over-monetize its brands — which is weighing on fans’ wallets.
4. If a Wall Street “expert” is warning you about a recession or a crash, check their math. That’s the advice of Neil Dutta, a veteran economist who’s just about done with the doom-and-gloom talk coming out of the world of finance. He says the deluge of crappy analysis has never been worse.
5. Microsoft won the week but Google’s big reveal is still to come in the AI search wars, according to Bank of America. ChatGPT’s popularity among consumers creates uncertainties for Alphabet, and it’s possible that Bing takes market share from the legacy search engine. But strategists are still bullish on Google in the long run.
6. The 10 richest people in the world have seen their combined fortunes swell by $140 billion in just six weeks. That’s more than Starbucks’ entire market value. Tesla’s Elon Musk and Dior’s Bernard Arnault are among the billionaires who have enjoyed the steep stock rally to start 2023.
7. The bond market’s classic recession indicator is still flashing. Long-dated US bonds are now paying much lower yields than short-term securities, which has long foreshadowed a downturn. Yet, Goldman Sachs analysts wrote this week that it’s no longer worth worrying about.
8. Morningstar recommends this batch of stocks that have strong cash flow and smart management teams. As a recession looms and volatility increases, certain companies are trading far below fair market value — making them perfect investments to add to your portfolio. See the 10 names.
9. Make these undervalued investments now while the stock market rally unwinds after a red-hot jobs report. The investment chief at Cambria Funds said he isn’t putting too much faith into employment data as a way to decide your strategy. He’s watching these four corners of the market for promising returns.
10. Markets guru Jeremy Siegel is predicting stocks to keep climbing this year. The “Stocks for the Long Run” author and finance professor told Insider that he expects the Fed to start slashing interest rates soon, and that will fuel market gains. He also warned that housing prices could fall 20% from their peak.
Edited by Jason Ma in Los Angeles.