AI: The Smart Way to Invest
As with all new technology, lots of people will make small and large fortunes from backing the right companies that get the technology right and the management of the technology right, while putting big licks of money in the bank for their owners.
How do you find those companies?
Well typically the smart money stays away from high risk, scatter gun approaches such as investing in ETFs that in turn invest in every AI company under the sun. It also stays away from the high-risk early-stage start-ups that are appearing everywhere.
Instead, the smart money sticks with conventional laws of investment and invests in the following core market opportunities that will flow from this incredible new technology.
The first area is to look for those companies that are successfully building high-performance chips, data centres and cooling systems and who are being paid millions of dollars to do this basic work for the industry.
The next area to look at are those companies that are already successful tech players, who are pro-actively looking to integrate AI across existing software stacks, and to sell the benefit of this work to their existing customers.
Finally, and the option I prefer is to look at companies that are already successful in their individual industries who are proactively looking to embrace the best of AI technology to make them even more efficient and unassailable.
This is my preferred option for investing in this AI technology.
To leave it to people who are already very clever at what they do, who know the advantages that can be gained by being even more efficient and adopt AI technology to achieve those ambitions.
This is what investing, true investing is. Finding successful companies who already have excellent management teams in place who are the best of the best in terms of what they are doing and simply backing them and letting them get on with the job.
And finding successful companies is relatively easy. They are the very large companies who are posting strong returns to shareholders year after year, and they stand out on the Australian stock exchange.
Unless you are an AI guru and intend to spend thousands of hours researching all the various AI start-ups and wanna-be AI startups, anything else is just a form of gambling.
It’s reading something on-line or hearing it on the radio and thinking for some reason that this company, and this company alone, will beat all the rest and become an AI winner.
You might well pick the right company but that’s the equivalent of a lottery winner. It is not investing.