This Week on Trends with Friends (February 9, 2025)
Welcome Friends,
Here’s an assortment of posts shared this week on Trends with Friends. Let’s dive in…
IS MY PORTFOLIO DEGENERATE ENOUGH?
Howard Lindzon asks, Is My Portfolio Degenerate Enough?
Lindzon writes,
The fact that I am typing this means this has to be the top, so don’t @ me.
I read this as I was drinking my coffee just now…
By 2025, most white-collar jobs will be better done by an LLM.
It’s already game over for most lawyers, analysts, consultants, financial advisors…
We are heading towards a Rust Belt collapse, but for desk jobs.
GDP will go up while we have massive layoffs in these sectors.
— Avichal – Electric ϟ Capital (@avichal)
2:14 AM • Feb 7, 2025
I mostly agree with Avichal and we are seeing this close up in the legal industry.
THIS WEEK IN AI
Michael Parekh reviews Big Tech earnings, AI Reasoning, Google Cloud’s resurgence, Amazon’s AI revamp, safe superintelligence and more in this week’s AI Summary.
THE MULTIVERSE IS REAL
Phil Pearlman recently shared, The Multiverse is Real.
The Multiverse, for those not familiar, is this idea that there are parallel universes existing simultaneously.
It is most well known from science fiction.
If you ever saw the wonderful movie, Spider-Man: Into the Spiderverse, you’ll be familiar with this concept. Above is a photo from the movie with seven different Spidermen from seven parallel universes converging on an important mission to save the world.
It’s nice to hear these genius physicists suspect that the multiverse is real, but I have known this to be the case for quite some time.
Almost everybody reading this is going to wake up one year from today on February 6, 2026. You’re going to wake up, take a pee, brush your teeth and put on some clothes the same way you did this morning.
That day is almost as real as today is real. It just hasn’t happened yet.
THE GODSPEED WEEKLY
Riley Rosebee recently launched a new publication Godspeed focused on the confluence of technologies within AI, Space, Energy, Robots, Mobility, Automation and Digital Infrastructure.
This week, Rosebee reviews Instacart’s Super Bowl debut, advanced air mobility enters the Rockies, Honeywell’s strategic separation and is China leading autonomous mobility?
SLAP CHOP FEVER
Larry Thompson is making sense of the messy market. Thompson shares,
The S&P 500 is stuck in a choppy, range-bound mess.
And as we’ve talked about before, when there’s a range, it becomes a SHOW ME game.
As a technician, one of the best “show me” indicators is breadth.
It helps gauge the market’s “weather conditions” so we know what kind of clothes (trades) to put on.
I love using New 52-week highs and lows for this.
It’s hard to sustain a market rally if the stocks within it aren’t consistently posting new highs.
Simple? Of course.
But we often need to be reminded more than we need to be taught.
It’s consistent repetition of simplicity that builds great habits and makes great investors.
This past year was strong.
The persistence in stocks making new highs, while new lows stayed tame is a sign of strong trends with follow-through.
And follow-through is what leads to new highs.
Right now? Both new highs and new lows are muted.
That suggests rotation.
UNDERSTANDING GENERATIVE AI
Ted Merz shared a great piece on AI’s capabilities. Merz mentions,
Generative AI cannot write what hasn’t been written.
This is a subtle but profound truth the tech industry is just fully coming to understand.
Ask a question of any large language model – from ChatGPT to Grok go Gemini – and you notice that LLMs cannot deliver reliable answers for topics that haven’t been covered.
Gen AI programs work well when you are researching big companies like Nvidia and famous people like Tim Cook but not at all for the obscure or unsung.
Since there is no way humans can keep up, the somewhat counterintuitive solution to this problem is to tap Gen AI to create a vast library of digital content.
Effectively, we need machines to write articles so other machines can read them.
To illustrate the challenge, consider Perplexity, an AI search engine, which is building a finance vertical. The biggest challenge won’t be the speed or depth of the LLMs that they leverage, but the lack of historical news about companies.
In many cases, these are small or mid-sized companies that were never covered by reporters at Bloomberg or Reuters or the New York Times.
Remember: Generative AI cannot write what hasn’t been written.
PODCAST LINKS
Tadas Viskanta curated podcasts links to inspire long-term thinking. Here’s a sneak peek…
TRENDS WITH NO FRIENDS
Trends With No Friends sifts through the noise and discovers stocks above $1B market cap with high relative strength and low social following.
The publication shares 52-Week Highs and Lows sorted by followers on Stocktwits.
Why is high relative strength and low social following important?
Stocks that are outperforming tend to continue to outperform. Stocks that have a low social following are, by definition, undiscovered by the crowd. Stocks that have both Relative Strength and Low Social Following can really outperform as more investors discover them.
This week, Trends with No Friends featured…
Prestige Consumer Healthcare ($PBH), GRAIL ($GRAL), Tuya ($TUYA), Kingsoft Cloud ($KC), RBC Bearings ($RBC) and more.
THIS WEEK’S EPISODE
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And in case you missed it… Howard Lindzon, Michael Parekh and Phil Pearlman are joined by Mike and Kass Lazerow to discuss storytelling in business, AI’s impact on growth and the hard truths of entrepreneurship on the latest episode of Trends with Friends.
GET IN TOUCH
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