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Zuck Sending Zingers Elon’s Way ⚡️ 

Happy Sunday!

A few weeks back Mark Zuckerberg and Elon Musk agreed to hop in the ring together for a friendly tussle to settle their internet beef.

Musk has apparently gone radio silent to Zuck’s August 26 proposal.

The FB founder got in a little jab at the expense of Elon, who suggested the fight would be streamed on X (formerly known as Twitter).

"Shouldn't we use a more reliable platform that can actually raise money for charity?"

Zing ⚡ Annnnnd the first round goes to Zuck.

Jeremiah “Grabbing My Popcorn” Desmarais

CEO, Advisorist

In Today’s Issue 👇️ 

• Is ChatGPT better at picking investments than FAs? 🤔

• Why one hedge fund billionaire spends his time studying…Reddit

• A modern day treasure hunt 💎 for missing 401(k)s

Let’s dig in!

The Future of Investing? Not So Fast, GPT 🤖

Ever get tired of hearing about how robots and AI are going to render people useless?

Well, this fascinating experiment will conjure up some mixed emotions.

The Experiment

NewsBTC handed ChatGPT $20,000 to play with in the world of stocks and crypto.

They trained the tool on how to invest the budget, and the results?

A beefy $1,946 profit (+9.7%) in just 30 days.

Soaring Rivian stock and booming altcoin Solana were the big earners.

The Wins

According to Jonathan Millet of NewsBTC, ChatGPT was spot-on with how much to invest in various stocks and coins, even when the increased profits from Solana were more than double the ROI of Bitcoin.

The Losses

Ah, but it wasn't all green arrows and climbing charts.

ChatGPT missed the mark on Meta, Twitter's competitor, which could have juiced the investment up to $1,100 had it been recommended.

Then, there's the "hiccup" of Waymo, a non-publicly traded stock, making its way into ChatGPT's suggestion list.

(A sign of the AI tool’s infancy and poor judgment? Perhaps.)

Todd Stearn of The Money Manual sums it up best, "ChatGPT isn't going to make you rich... It's still up to you to make the right financial decisions."

Missed Opportunities and the Financial Advisor's Place

Despite the experiment's success, I think the biggest takeaway is that we still need the human touch.

The missed opportunities with Meta, as well as the Waymo flub, reveal that while AI can be potent, it's far from infallible.

It also highlights how even the savviest tools need real-time data visibility and common sense – which is where advisors come into play.

The Bottom Line

ChatGPT's success in NewsBTC's experiment shows some promise for the role of AI in investments, but there are too many missteps and pitfalls to replace the experience and judgment of an advisor.

AI might occasionally hit it right, but, hey…so do random kids on Reddit.

Hedge Fund Billionaire: ‘Reddit is the New Stock Analysis Tool’ 🌶️

Wall Street titan Dan Loeb is calling it quits on his high-stakes gambling against individual stocks.

Why? Because the meme maestros are back, and they're serving up some fresh new ‘meme stocks.’

Short-Selling Shenanigans

Remember the early pandemic days when Reddit’s WallStreetBets took on the big boys of Wall Street?

Well, they're channeling those vibes again.

Tupperware Brands Corp., Nikola Corp., and Yellow Corp. stocks have popped off, leaving short sellers with a not-so-pleasant $435 million in losses over two months.

Loeb, captain of hedge fund Third Point LLC, was seemingly untouched but declared in a letter this week, "I'm out."

His words, not ours, but the sentiment was clear.

A Game of Risk

Loeb’s bailing on short-selling isn't just some midlife crisis decision.

As he puts it, “Fundamental analysis is increasingly taking a back seat to monitoring daily option expiries and Reddit message boards.”

Third Point is still in the short-selling game but moving cautiously towards market hedges and short baskets.

In other words, Loeb's not abandoning ship, but he’s definitely wearing a lifejacket.

Big Boom for the Little Guy

Those seemingly random stock surges by Tupperware (an 8X rally at one point), Yellow (584% jump), and Nikola Corp. (400% leap) prove that retail traders aren’t playing games.

(Well, they are, but with someone else's money.)

A Distorted Landscape

Short selling has always been like dancing on a tightrope over a pit of hungry crocodiles.

But now? Imagine the crocodiles can fly.

In other words, the meme crowd isn't playing by the rules…and it's terrifying folks like Loeb.

Bottom Line

It's not every day that a Wall Street giant like Loeb admits the battlefield has changed.

In the face of the meme-stock crowd, the rules are rewritten, and the game's more unpredictable than ever.

So if you catch Loeb browsing Reddit for hours on end…he’s not tuning out.

He’s tuning in.

And you might see more of Wall Street doing the same in the months to come.

Advisors Sound Off 💬

Top Headlines: Everything You Need to Know

👋 Headline Roundup

• Treasury Yields Rise Ahead of Fresh Inflation Data [CNBC]

• Gen Z Credit Card Debt Jumps 52% to $55 Billion [MW]

• Hollywood Strikes Have Cost California Economy $3B to date [CNBC]

📈 Markets

• Investors sold $5.5B worth of stock market funds last week [MW]

• Less Money Flowing to Domestic Equities Than Ever Before [WSJ]

• Top Economist: Interest rates should stay around 5% for a while [CNBC]

💰️ Industry News

• Risk Placement Services named best insurance company to work for [IB]

• ML advisors overseeing $1B in AUM leave for UBS and LPL [BRNS]

• Top NY Law Enforcement Office Opens Investigation into Robinhood [WM]

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Post of the Week

401(k) FOMO: A Modern Day Retirement Treasure Hunt

Remember that childhood piggy bank you lost and discovered years later filled with quarters?

Well, the adult version of that story is happening right now, and it's not as fun.

According to Capitalize, 1-in-5 U.S. workers have turned their backs on their 401(k) accounts after switching jobs.

That’s a 60% increase since 2020.

Calling all Financial Advisors

The math is clear: There are folks on your email list who have inactive 401(k) accounts they’ve left behind.

My challenge to you: Send out a VERY simple email to shake the tree for potential rollovers.

(You’re going to laugh at how simple this is…but I can almost guarantee you’ll get some bites.)

[Subject Line] just curious

[Email]

Hey {first name}, I’m curious…

Do you have an old 401(k) that you’ve left behind from a previous job?

I’ve carved out this week to help my clients roll over these accounts.

Shoot me a reply and let me know.

{Your Name}

Tom Hegna’s Chart of the Week 📊

From Tom’s Desk:

Higher interest rates are going to have a huge impact on our government.

The interest on the debt will be a major expense going forward.

For context: The entire defense budget is about $800 billion.

This will be the first year that interest on the debt EXCEEDS the defense budget.

– Tom Hegna

👀 The Best Thing I Saw All Week

Celebrities and the general public rallied behind an actress after a disappointing turnout of only one person at her one woman play.

Georgie Grier sent out an emotional tweet after the show as a way of venting.

What she didn’t expect was more than 11 million views, prompting an outpouring of support from celebrities, businesses, and fellow artists.

The next day, she performed to a near-sell out crowd.

"I did not expect the level of reaction I've had it's been so lovely, so unexpected, so many words for what I have experienced,” she said.

“I am so appreciative of what I have experienced."

Sharing looks good on you.

When you copy that link at the bottom and share it with a few financial planning colleagues, you look like the smartest advisor in the room by keeping them informed.

Plus, you earn rewards. Sweet.