This is going to be a short article. Since no one knows what qualifies as free speech in America anymore, the fewer words the better, right? Also, I’ve just been pretty busy with so many side projects.
Investing Via the Stock Market
There are at least a billion articles on which AI stocks to buy. This kind of advice is coming three years too late. Nvidia has already gone up a billion percent as they rake in billions every quarter.*
Nvidia is included in most major indexes, so you likely have a good amount in your portfolio already. It’s 7.75% of the S&P 500. Microsoft, which owns a lot of OpenAI, is nearly at 7% as well. Google isn’t far behind. In other words, if you invest in broad-based ETFs, you already have a good stake in AI.
To take it a step further, every company is going to be changed by AI in one way or another. Some will use it in a big way. On the other spectrum, even the tiniest business, like my dog boarding business, is using AI. I’ve used it to do some very useful things with my spreadsheets.
In fact, it is more difficult to AVOID investing in the future Skynet that will “terminate” human life. (Sorry for going to a dark place there.)
However, if you are really looking to up your AI exposure, here’s what I’d do. I like semiconductor ETFs – particularly SMH and SOXX. SMH has a lot of Nvidia in it, so if you want to diversify with other companies, I’d go with SOXX. They each have about the same expense ratio, with 0.35 vs. 034.
All those chips need a lot of energy. I’ve been invested in Vanguard’s Utilities Index Fund ETF (VPU) for a while. That seems like a good fit to me. The big tech companies all want to build out nuclear power because AI requires so much energy. It seems like the best nuclear ETF is VanEck Uranium and Nuclear ETF (NLR).
The bad news with the semiconductor and nuclear ETFs is that they have either doubled or tripled over the last couple of years.
One possible overlooked area to invest in is water. It is used to cool all the AI chips, and they use A LOT of it. I wrote about investing in water three years ago, but I was thinking about it from the perspective of us humans needing it to sustain our soon-to-be obsolete fleshy life.
Start a company
This is a lot more work, which is not “Lazy Man” friendly. Fortunately, using AI is GREAT when it comes to doing a lot of computer work quickly and easily. I feel like I could literally start a dozen different companies with all the ideas I have. That’s one reason why I haven’t been writing on the blog so much.
It’s important to note that those ideas aren’t necessarily good ones. ChatGPT has a way of making an idea sound incredible. ChatGPT is filled with success stories because people publish a lot more of them on the internet than their failures. It’s like how Facebook shows the most engaging posts from your timeline, which makes it a highlight reel of all your friends. That isn’t real life.
With all that said, there will be a lot of companies started with AI in the next few years, and many of them will be worth millions. With AI, anyone can code a mobile or web application. Anyone can write and publish a book. One of my ideas is for a book. In about an hour, I had a title, cover, chapter outline, and marketing plan. I literally did this at 3 AM when I woke up from a dream. I showed it to my wife, who doesn’t know much about AI, and she thought it was amazingly good. I expected her to laugh at my idea for the book, but she agreed that it made a good point and even took it a step further than I did.
One thing to remember is that when anyone can do something, many people will do it. There’s no barrier to entry, so the competition will be fierce. In a world where anyone can write a book in less than a week, will there be anyone with the time to read it?
Final Thoughts
Over the last few weeks, I’ve written a lot about AI. I’ll try not to write so much going forward, but it’s fundamentally changing everything: education, careers, entertainment, investing, and so much more. Are you using AI to make money? If so, let me know in the comments.
* If I use a “billion” enough times in a couple of sentences, I’ve got to use it literally at least once.
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