AI has become a buzzword that dominates the headlines, sparks conversations, and captures the imagination of both industry experts and the general public. However, amidst the seemingly widespread mentions of AI, questions arise regarding the existence of a potential bubble burst in AI stocks. As the debate intensifies, weighing the possible risk and scenarios surrounding the AI hype becomes crucial.
In this episode, Rusty talks with Dan Russo, Portfolio Manager at Potomac Fund Management. Dan has been in the securities industry for 23 years. His experience includes a wide range of institutional investors, working with them to perform fundamental, technical, and quantitative research to navigate the market and generate actionable trading and investment ideas. At Potomac Fund Management, Dan conducts technical and quantitative analysis, structuring portfolios of ETFs based on this analysis and providing ongoing written research for the firm's financial advisor client base.
Dan and Rusty weigh some potential scenarios and risks from the possibility of a bubble burst in artificial intelligence stocks and future scenarios for the stock market, technology stocks, and interest rates.
Key Takeaways
[02:31] - Dan's career background and how he got to Potomac Fund Management.
[03:38] - How Dan defines risk.
[06:38] - Is AI-related stock overvalued?
[10:07] - Are there signs of speculative behavior in AI investments and indications of a herd mentality?
[13:16] - How sustainable is the AI industry's growth trajectory?
[15:30] - Will artificial intelligence increase investment companies' efficiency and productivity?
[17:44] - How AI impacts the markets over time and how investment managers manage their portfolios moving forward.
[20:44] - Rusty's risk and scenario on AI's impact on U.S. stocks, technology stocks, and interest rates.
[22:25] - Dan's perspective on Rusty's first base-case scenario.
[24:58] - Rusty's good case scenario for AI stocks.
[30:03] - What other risks should investors think about?
Quotes
[12:53] - "There's probably a bubble in media mentions of the phrase AI. But I can make a compelling case that this is not super crowded at this point. And I wonder if I would call it a bubble yet." ~ Dan Russo
[19:10] - "If you are a fundamental investment manager or stock picker, keep doing your job. Keep analyzing these companies from the bottom up and then just incorporate AI into that analysis process." ~ Dan Russo
[30:30] - "Investors should also think about regulatory risks. We have no idea how governments are going to react to the widespread adoption of artificial intelligence." ~ Dan Russo
Links
Dan Russo on LinkedIn
Dan Russo on Twitter
Potomac Fund Management
Can't Stop by Red Hot Chili Peppers
Global X ETFs
Manish Khatta
Connect with our hosts
Rusty Vanneman
Subscribe and stay in touch
Apple Podcasts
Spotify
Google Podcasts
Disclosure
Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.
1696-OAT-6/21/2023
