I suspect that AI and tech in general are _extremely_ well correlated. Indeed AI is just a subset of tech. Because they are so well correlated, your strategy really does not provide any hedge, you’re just all-in on tech. I’m very bullish on tech as well, but your described strategy makes me worried because I sincerely think you could lose your job and then find that the AI stocks don’t do well. Eg, consider the scenario:
1. We hit sudden limits in computational density, energy efficiency, and energy storage technology
2. We face another AI winter (which happens surprisingly often!)
I don’t know the industry you work in, but for many in tech that could lead to a layoff and then underperforming stocks. I think you can imagine an equivalent scenario for yourself, based on your industry, etc
almost everyone I know who is somewhat 'digitally-savvy' (and even some others) use GPT for various things. I, as a very early adopter, use llm's of various kinds for more and more things; my conservative estimate is that I do at leat two 'requests' an hour, but obviously ANY real interactive session balloons those requests to bigger and more.
So aside from the fact that LLM's are already used so much in such a short time, I fully expect that as UI's get better, even if everything else stays the same, more and more things will be (subtly) LLM-powered. Because a lot of the stuff I do regularly are super useful to non-techies, and it's just a matter of UX/acclimatization.
For what it's worth, I'm not a 'fan' of what I think is a a pandora's box of sorts, culturally especially. I unironically call mine Gepetto to remind me that I might not be as much in the driver's seat as I'd like, pulling the metaphorical car strings.
okay, sorry about this turning into a glorified blogpost :)
I have 30% in S&P500 for a reason. Maybe you think it's too low?
I do want to consider your scenario:
1. If we hit a limit on chip node tech as you said, all stocks would suffer since advancements in computer chips contributes to all industries.
2. If we face another AI winter, then my job is more safe? Even if I get laid off in my current job, I assume that AI isn't good enough to completely replace me based on your scenario so I at least can find another job.
I think a professional financial planner (which I’m not) would say that 30% is too low, and also advocate holding cash and some bonds. You really have a very aggressive investment portfolio. But personally I don’t mind aggressive investment, and I feel your present allocation may be fine depending on your beliefs and your risk tolerance. Your initial post has this if-I-get-fired/if-I-don’t-get-fired analysis, which I think presents your investments as lower risk than they really are. I think your job and 70% of your investments is going to do whatever tech does. If you still feel ok with that, then I think your allocation is probably matching your beliefs and risk tolerance well.
Your initial post has this if-I-get-fired/if-I-don’t-get-fired analysis, which I think presents your investments as lower risk than they really are.
The idea is that if I don't get fired, then my job will continue to feed me. If I permanently lose my ability to make money as a software dev, then AI will have taken off and my stocks should now feed me.
1. We hit sudden limits in computational density, energy efficiency, and energy storage technology
2. We face another AI winter (which happens surprisingly often!)
I don’t know the industry you work in, but for many in tech that could lead to a layoff and then underperforming stocks. I think you can imagine an equivalent scenario for yourself, based on your industry, etc