Getting Back to Our Roots: How to Start Using AI Today… and Gain Some Valuable Know-How in the Process
We’ve been covering AI in this humble rag for nearly five years.
Back in September 2018, we were among the first to make note of Apple’s (then) newly launched AI research facility. And not long after – in our April 2019 issue – we showed readers how China was already using AI technology to keep a watchful eye on its citizens.
Half a decade later, both the opportunities and the risks continue to grow. But at this point, it should be evident that Manward is erring on the side of cautious optimism.
AI is already helping us do important things. The question is… Have you dipped your toes in yet?
Yes, we are talking to YOU, dear reader.
If you’ve been with us since those early days, you understand the value of hard-earned Know-How. It’s one of the core values that defined Manward’s path (along with Liberty and Connections) when we launched. It still does.
One cannot truly succeed in life without it.
If we stop learning… we stop living.
Or, as Henry Ford once put it…
“Anyone who stops learning is old, whether at 20 or 80. Anyone who keeps learning stays young.”
And so, as we once did with our popular “Old Guy’s Guide to Crypto” series, we’re going to help you add this new and powerful tech to your toolkit.
To do that, we’ve assembled a quick primer on the biggest name in the game today… ChatGPT.
First Mover for a Reason
Anyone who follows Alpesh knows that he’s been using an enhanced version of the software to perform research for his hedge fund. To say he’s been impressed with the results so far would be an understatement.
He’s been interviewed by Business Insider, Yahoo Finance and the BBC (among others) about being one of the first hedge fund managers in the world to embrace the technology.
[Screenshot: Business Insider headline]
To be clear, Alpesh uses a premium version of GPT-4 (which is, essentially, an upgraded form of ChatGPT), as well as numerous plug-ins to incorporate real-time market data.
For his purposes, that combination has created quite a powerful trading companion.
But you don’t need to subscribe to all those resources to get value out of OpenAI’s software.
In fact… you don’t need to spend a dime.
To get your feet wet, you just need to create a free account…
How to Get Started
Start by going to chat.openai.com.
Click “Sign up” to get started. You’ll be prompted to begin the registration process from scratch. Or you can link a Google, Apple or Microsoft account.
It couldn’t be simpler. (No wonder ChatGPT was able to garner 100 million users in less than a year.)
Once this quick process is complete, you’ll be greeted by a few disclaimers. They essentially state that the software is still a work in progress and may generate incorrect responses to certain queries. You’ll also get a note stating that whatever you put into the chat may be reviewed by OpenAI’s staff to help improve ChatGPT.
So don’t go putting in any sensitive details (this is still the internet, after all).
With all of that squared away, you’ll be off to the races. Your screen should look something like this:
[Screenshot: ChatGPT home screen]
See that text bar at the bottom of the screen? That’s where you’ll put in your first prompt.
This is where things get fun.
Sample Prompts
You might be wondering what sorts of things you can ask ChatGPT. That’s kind of the beauty of the system… You can pretty much ask it anything.
Depending on your personality, that may excite you… or unnerve you. Either way, allow us to provide an example of some good opening questions.
Since we are, at our core, an investing newsletter, let’s start with a simple question we’ve gotten from folks just getting started as traders…
“Can you explain how stock options work to me like I’m a 10-year-old?”
When we asked this, ChatGPT replied…
Alright, imagine you have a really cool trading card of your favorite superhero, let’s call it “Super Option.” Now, you know that other kids might want to have this card too because it’s so awesome. So, you decide to let them borrow it for a little while.Now, here’s the fun part: You tell them, “Hey, you can borrow this card for two weeks, and if you still want it after that time, you can buy it from me for $5.” The other kids think it’s a great deal because they might not be sure if they really want the card, but they get to try it out for a while.
Now, let’s translate this to the stock market! Instead of trading cards, we have stocks of real companies like “SuperTech Inc.” When you buy a stock, you own a tiny piece of that company. But sometimes, you’re not sure if the stock price will go up or down.
That’s where stock options come in! A stock option is like a special promise that allows you to have the choice to buy or sell a stock at a certain price in the future. It’s like having the option to buy or sell the Super Option card after two weeks.
So, let’s say you think the SuperTech Inc. stock will become even more valuable in the future, and right now, it’s worth $50. You could buy a stock option called a “call option” for $2. This option gives you the right to buy the SuperTech stock for $50 anytime in the next month, even if the stock price goes up to $60 or more!
The software then went on to explain the difference between call options and put options in a way that might truly make sense to a 10-year-old (or someone just learning about investing). It even included a handy disclaimer about the risks of trading options.
Here’s another example…
“What should I look for in a good value stock?”
ChatGPT gave a lengthy response that started with…
Looking for a value stock involves identifying companies whose stock prices appear to be undervalued compared to their intrinsic value. Here are some key factors to consider when looking for a value stock…
It then listed 10 criteria value investors should consider, including a low P/E, a solid dividend yield, consistent free cash flow and more.
And, yes, it provided another disclaimer.
One more to bring us full circle…
“How do cryptocurrencies work?”
ChatGPT explains…
Cryptocurrencies work on the principles of blockchain technology, a decentralized and distributed ledger system. Let’s break down the key components of how cryptocurrencies work…
The software went on to tell us – in simple terms – how blockchains record crypto transactions, how transaction validation occurs, what Proof of Work and Proof of Stake mean, and more.
It also warned of the dangers of trading cryptocurrencies without a proper understanding of the risks involved. (Hear! Hear!)
In our humble opinion, while this response may not be quite as well written or useful as Manward’s official crypto guide, it’s far from shabby.
We dare say it’s even good.
The point is… ChatGPT can provide simple and sometimes in-depth answers to prompts like our examples above. Just be aware that this software is still learning and growing – and is prone to occasional mistakes.
What It All Comes Down To
Naturally, in our sample prompts, we kept things basic and focused on the financial realm. But we invite the curious to simply log in to ChatGPT and take it for a spin.
Think of it as an ultrasmart, souped-up search engine. Ask it whatever pops into your mind (assuming what pops into your mind isn’t your Social Security number or your mother’s maiden name). As it stands, there’s no wrong way to use ChatGPT.
If nothing else, you’ll get a firsthand peek at what all the AI hype is about… even if ChatGPT itself represents only a tiny sliver of what this new technology promises.
Try it out… and gain some valuable Know-How in the process.