The Stocks That Could Survive an AI Bust
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What is the main topic discussed in this episode?
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But if you do believe that AI is very powerful, that it's going to bring some positive to to the human population across the board, I mean obviously that's going to be some negative as well. then what you really want to do is to invest into companies that are receiving the spending or investment, which we call them the picks and shuffle companies. But then when you are thinking about the company that investing into AI to make an AI model, to come up with different use cases and all that, that's going to be a try and error process in a way that a lot of them are not going to survive, but some of them are going to make it to be very successful. So it doesn't mean that you can't pick them, but then I think this is more of a venture capitalist market, isn't it?
You invest into probably a hundred companies and then some of them worked out, most of them doesn't, but then you still make a lot of money.
Welcome to Meren Talks Money, the podcast in which people who know the markets explain the markets. I'm Maren Zamsa Webb, and this week I'm speaking with Stephen Yu, Chief Investment Officer of the Blue Whale Growth Fund, which manages more than $4 billion. Steven is a major investor in technology and has built something of a reputation for identifying the likely winners, and indeed the losers, of the AI boom. His record makes him a voice worth listening to, and we have had him on the podcast a few times before. From its launch in September 2017 to the end of August, the fund returned over 320%. That's against just under 130% for its benchmark. So far this year, it has outperformed the index by more than 40%.
But with so much of the global market now riding on enthusiasm for AI, can investors really diversify their portfolios enough to survive a A disappointment? And if so, which companies might still prosper if the boom begins to fade? Stephen, welcome to Marion Dog's Money.
Thank
you. Now, you are not really an AI fund. I know that you've had so much of your investments in AI related stuff over the last couple of years that people look at Blue Well and they go, Well, that's an AI fund or that's a tech fund or that's a uh just a growth fund, whatever it is. And of course you are you are none of those things. You're a fundamental stock picker. However, before we move on to talking about stocks and how you pick them, do you mind if we just have a chat about uh the environ the AI environment at the moment?
Yes, of course.
Can we start with um the dangers and why we're talking so much about the dangers at the moment?
I think that's a good um starting point just because if you think about the pace of how AI is the AI cycle has been been gone through over the last few years has been very much on an exponential trajectory, which means like everyone is now feeling a part feeling part of AI, whether whether you have ended up investing into AI or not, that's a different story.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–9:25
2
How does the fund identify “picks and shuffle” companies that benefit from AI spending?
9:25–13:48
3
What is Stephen Yiu’s track record and how does the Blue Whale Growth Fund outperform the market?
13:48–21:00
4
Why do investors worry that the AI boom could turn into an earnings bubble?
21:00–46:56