A Comment -- General Comments From an Expert (A Commentary)

Yes. If it's breaking support, you have to stop out. You have to have a discipline, whatever that is. But just holding because you bought it doesn't make sense to him. He's OK with holding stocks that are zig-zagging in a base. 

But when something breaks down, you shouldn't hold it. Give it 3 days to 3 weeks, but don't hold it forever. If it stays below your neckline, you have to sell. Once things waterfall, it gets ugly fast. 

No one wants to take a loss, so they hold on. Hold and hope is a bad strategy. Walk away, no matter how much it hurts.

A 4% short position doesn't sound like a big factor to him. Most stocks have some sort of a short position.

It's at its support level and has not done anything yet. He's out of the trade. A little ugly. If you see recent peaks taken out and it moves up through those levels, it's game on. He wouldn't buy until it's started to show some turnaround.

Things can change, but don't predict, just prepare. For example, just because he observes the tech stocks being overbought, it doesn't mean he should go out and short them today. It just means he's a little cautious. The trend can be OK, but you have to prepare, just in case.

Market's climbing a wall of worry. Debt ceiling is probably more of a political event. Higher interest rates. Inflation is coming down. Even today in the UK, inflation went below 10% for the first time. Wage inflation is probably at the lower end.

The economy's picking up the pandemic slowdowns. There are still delivery and production delays. He's optimistic that the building blocks for recovery are being put in place. Double-ordering in the inventory cycle will work through the economy, probably sometime March/April of 2024. 

The economy's doing well. Incredible productivity will come out of AI, and productivity in general is very high. 

A political event. If they don't pay the bills, the system will come down and both parties know that. It will get resolved, but it's a matter of who can extract the most from the other before the deadline.

Broader Implications of AI: AI is not necessarily a new topic, but the practicality of using AI to enhance one’s productivity or knowledge is a new development over the past several months. The rapid onset of AI usability recently has been attributable to two main factors: increased computational power in recent years and a research paper discovering ‘transformer architecture’ written by Ashish Vaswani.

It is still so early in the AI space that it is difficult to fully grasp all of the implications, however, we know that nearly every industry has the capability to integrate AI and improve economic productivity and efficiency, as a result of millions of new AI users in recent months the economic results of these new technologies will occur faster than most believe, and the key is to leverage these technologies rather than reject them. 
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The current debt ceiling crisis reminds him of the crisis of 2011--fears of interest rates shooting up and the economy falling into recession. A month after the debt catastrophe was averted in 2011, investors made a ton of money.

Two major themes now: 1) Macro forces, debt levels, lower liquidity in markets. 2) This is countered by AI interest that could bring deflationary pressures The context is the globalization of the last 30 years with China offering very cheap labour

Markets today didn't react much to the current debt-ceiling crisis. Performing best were Cathie Wood-type stocks that have little money, no profit and promise future growth. Those hurt were stocks that have been performing well, like McDonald's and Pepsi. Sectors that could be hurt by a debt  default: real estate, financials, utilities, machinery and companies that need credit (cars, aircraft parts, for example). Those not hurt would be megacap tech. Then again, some investors ask, Who cares? It's all theater. When the nation's debt was downgrounded in 2011, it was a colossal buying opportunity. No, the US won't run out of money, but a default would harm its reputation abroad.

A.I. Investment Opportunities: Auto-GPT – Autonomous Workers. Auto-GPT is the equivalent of a fully autonomous, 24/7 full-time employee that can browse the internet and learn how to complete tasks by itself. Auto-GPT uses ChatGPT’s model, and allows individuals to create autonomous workers with pre-set goals and tasks. The interesting part is that the autonomous worker chooses and learns how to complete these tasks by itself.

Creating an autonomous worker via Auto-GPT works like this:

Step 1: Define a name for the bot

Step 2: Define the broad purpose of the bot (ie. Find the best set of golf clubs for a specific price, create a business model and plan and write down the steps needed to carry out this plan)

Step 3: Set clear, defined goals for what the bot is to accomplish

The bot will then begin working on small tasks to complete its larger goal, and it will even create ‘sub-workers’ below it to go out on to the internet and learn how to perform specific tasks. Models like these can even be used to refine and create better Large Language Models (LLMs) to further accelerate the speed at which advancements take place.
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Believes inverted yield curve (higher short term, than long term rates) indicating that investors optimistic about markets. 
Projected recession not hitting economy as hard as previously thought.
US debt ceiling, OPEC cuts & inflation numbers worrying investors.
Fastest pace of US Federal Reserve interest rate hikes in history the past 1.5 years. 

A.I. Investment Possibilities: AI Generative Images. The same company that created ChatGPT also released an AI program called DALL-E that can generate images from text. DALL-E is based on the same GPT architecture as ChatGPT, and it is capable of generating highly realistic images that correspond to the text input that it receives. The implications of AI-generated images are numerous, ranging from art and design to e-commerce and advertising.
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