Good morning. Futures point to a slight rise this morning as investors ponder the warning of Fed Chairman Jay Powell who characterized stocks as being “fairly highly valued.” Of course, it immediately brought to mind comments of Alan Greenspan who pointed out investor “irrational exuberance” back in 1996, which resulted in a temporary dip before tech stocks again jumped on the treadmill and headed higher … until realizing a sharp, painful, decline a little more 3 years later. Meanwhile, we are a week away from yet another “government shutdown” and things don’t look too promising … as the typical battle lines have been drawn with Republicans and Democrats not agreeing … and the Senate and House also not seeing eye-to-eye. And just like every time this happens we will hear comments calling for a way to stop this from happening every few months with promises made that will be forgotten once this “crisis” is over with the can kicked further down the road. Holiday shopping has started and while sales of Labubu dolls are starting to level off, the favored item on many a list continues to be “AI” stocks. The interest does not yet seem to be slowing, with every announcement resulting in a blood-pressure increase among investors. “Fairly highly valued?” Ha! Not for those who exuberantly think of themselves as visionaries. But AI continues to show quite a degree of advancement. It was just announced by researchers at NYU (and I’ll probably include the link tomorrow) that “AI can now pass the hardest level of the CFA exam in a matter of minutes.” I will say this … if true … would be a shocking development, especially for those of us who manually grade the exams. The follow-up concern will be, of course, not among the somewhat limited grading population, but for those analysts who study so hard and pass the exam. Will those with the highly regarded CFA designation be needed to analyze the intrinsic value of a security? Or will AI now be able to review complete financial statements and earnings call transcripts to come up with a concrete recommendation … all in a matter of seconds? Oh, boy. Friends in the industry might (and should) soon worry. On a final note for today, AI is also making its way into America’s pastime … baseball … as robotic umpires will soon “be brought up to the big leagues” … as the pointed out in the article below. Robotic analysts. Robotic umpires. Heck, what we really might need are robots to replace a few people from whom rational decisions seem to have completely disappeared. Robotic Congressmen and Senators. Now, that I would vote for. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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