Welcome Friends, 

Here’s an assortment of posts shared this week on Trends with Friends. Let’s dive in…

EYES ON AI

It was a huge week for AI. Howard Lindzon highlights what makes him bullish. He writes, 

This was a monumental week for AI.

Open AI raised $10 billion through equity and debt and Facebook hit an all-time high and a market cap $1.5 trillion.

Jensen Huang the founder of Nvidia is today worth more ( $104 billion) than the whole of Intel ($96 billion)!

I’ll be honest…I still do not use Chat GPT. But Ethan, my chief of staff, uses Chat GPT all day and even pays for it. So, indirectly I use and benefit from Ethan using it. I think of Chat GPT like I think of Excel. I see excel spreadsheets daily but rarely use it myself.

What I do use is Google’s AI suite called Gemini. I use it because I live in Gmail and Chrome. I really like it.

I do understand the bears and haters, but it is not for me to stand in front of a money and PR freight train… 

I say two things can be true. AI can be a bubble (Chat GPT and its clones may be an overhype machine magic trick), but AI can be incredibly useful tool for most people on earth.

I am most excited for AI at the moment because I am the CEO of Stocktwits. For 17 years we have built a community of millions of people talking about stocks all day long.

With AI, all this content now is fuel… 

Before AI there was mostly one way to use and consume Stocktwits. The massive expense of data scientists and machine learning engineers was an overwhelming cost. With AI Stocktwits can be for everyone at a fraction of the cost.

Read Lindzon’s latest here.

THIS WEEK IN AI

Michael Parekh reviews OpenAI’s $157B valuation, enterprise AI agents, synthetic content and Google’s “Smart Glasses” in this week’s AI Summary.

It’s a must read. 

INVESTORS ARE HUNGRY FOR RISK

Larry Thompson sees investors hunger for risk. Thompson charts the Consumer Discretionary to Consumer Staples ratio to communicate his thesis. He writes, 

One of my favorite ratios is the Consumer Discretionary to Consumer Staples ratio. It compares companies that sell products people want when they have disposable income to those that sell products people need, regardless of the business cycle. When investors anticipate an economic slowdown or seek less risk, this ratio tends to decline. On the flip side, as risk appetite grows, the ratio rises.

To get a more balanced view, analyzing this ratio on an equal-weight basis using RSPD and RSPS is helpful, as it reduces the outsized influence of individual stocks.

As we can see, Investors are not “cautious” at the moment, in fact they are adding risk at an accelerating pace since the first rate cut. This doesn’t scream economic slowdown, this doesn’t scream “cautious”.

THERE ARE TWO WORLDS

Phil Pearlman reflects on a social media exchange he experienced this week. Phil writes,  

The other day, I put this tweet out there,

As you age, you either get cynical or wise.

I’ve been thinking about wisdom and aging and I noticed that some people grow closer to the most important people in their lives as they grow older, while others isolate emotionally even when they are surrounded by people they have known for a long time.

I got a bunch of comments that were like, Why not both? but I don’t think it’s really possible to be both cynical and wise.

If you have a fundamental distrust for others that grows over time, you will end up isolated. 

Close bonds require trust and isolation is simply unwise over time. It leaves you lonely and spiritually malnourished.

Plus, cynicism is a poor way to frame the world. 

Sure, there are rotten people out there, but there are wonderful people out there too, lots of them, and the longer we live the more opportunities we have to grow close to the good ones, to love them and to allow ourselves to be loved.

I got one comment on that tweet above that really stuck with me and I thought I would write about it here. Funny enough, the person who left the comment deleted it so I will have to reconstruct it through my own lens, the same lens that found it of interest in the first place.

The reply went something like,

Me and my friends are professionals in our thirties and more and more we see the world as headed downhill fast and so being cynical seems like the natural path.

This comment stuck with me so much because I observe this cohort and I see this growing despondency. And these are important people. They are helping to build the world we live in.

So I wrote out this post and I hope the guy who deleted his comment sees it and maybe even shares it with his friends.

There are two worlds. 

The world that exists out there and the world you create for yourself… 

Read Phil’s full post here.

TWEETING THE NEWS

Ted Merz explores the evolution of corporate communication. Merz mentions, 

It’s a gradual but secular shift in corporate communications away from the institution and toward the individual, usually the CEO.

Sam Altman speaks for OpenAI. Mark Zuckerberg is the face of Meta. Tim Cook represents Apple. Elon Musk communicates for Tesla.

This has accelerated in the last few years with the emergence of social media as a distribution channel. It’s particularly pronounced in tech.

There are opportunities here and there are challenges.

For the news media, a world of tweeted announcements makes it harder to follow and manage. 

For companies, it is a chance to tell stories independent of the media.

For CEOs, it’s a chance to more directly embody the narrative. 

But to do that…

CEOs have to build followings.

And to grow followings they need to publish engaging content.

So far, few have been willing to do that.

AN INCREASINGLY AUTOMATED WORLD

Tadas Viskanta curated links on An Increasingly Automated World. 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… 

Texas Pacific Land ($TPL), Vertex ($VERX), Life360 ($LIF), Acuity Brands ($AYI), Credicorp ($BAP) and more.

THIS WEEK’S EPISODE

And in case you missed it… Howard Lindzon, Michael Parekh, JC Parets and Phil Pearlman are joined by Jeff Macke to discuss China, Retail Trends, AI-Driven Nuclear Energy and more on the latest episode of Trends with Friends. 

Tune in today.

GET IN TOUCH

If you share insight on the market and would like to contribute to Trends with Friends, send us an email.

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