This article was originally published on Halloween, 2018, but we’re getting a ton of new questions about it so they must be running the ad heavily again. The ad has NOT been updated in any meaningful way, but some significant things have changed for this stock over the past year (though the stock price is right around where it was a year ago), so I’ll go through and add a few updates here and there as warranted.
Paul Mampilly is pitching his Profits Unlimited newsletter with a long spiel about artificial intelligence (AI), which seems to mostly be a tease from a presentation he recently made on stage at a Banyan Hill “Total Wealth Symposium” in Las Vegas (well, in September of 2018 — so it was “recent” when the ad started running).
And we like to think for ourselves, of course, so I thought I’d dig into the clues he drops and see if we can name that stock for you — maybe you’d love his newsletter, maybe you’d hate it, but if you subscribe to a newsletter just to find out about a secret stock… well, odds are pretty bad that you’ll be able to think rationally and independently about that stock afterward. Lots of biases get in the way, including: We all have a tendency to justify purchases, so you’ll probably want to love that newsletter because you just paid for it… and most investors end up being very strongly influenced by the first piece of information they receive about a particular stock, so if you buy into this “76,000% gains!” pitch without any context, you’re setting yourself up for disappointment.
So with that said, what’s the story? Mampilly here is pitching us on the huge growth in artificial intelligence… here’s a little taste of the ad:
“Major consulting firms predict this technology will create 2.3 million jobs in the next two years and give businesses the chance to raise profits, across the board, by nearly 50%.
“Which is why the big money is piling in.
“Microsoft has dedicated $12 billion to this technology.
“IBM is investing $15 billion.
“Google is spending $30 billion.
“Intel has already put up $32 billion to acquire multiple startups in this space, for the single goal of pushing this technology forward.”
And the 76,000% number that he throws out as red meat for us is just pulled from a big picture speculation:
“At $20 billion, this technology is tiny compared to the internet, smartphones and computers.
“However, the world’s leading researchers estimate it will explode into a $15.7 trillion industry in the next five years, growing bigger than all of these — COMBINED.
“That’s a 76,000% growth.”
You can throw around pretty much any numbers you want for that kind of big picture stuff, they won’t mean anything. Yes, we concede the artificial intelligence is a massive focus of most big tech firms, and is making its way into every part of the economy… but it’s almost impossible to even rationally guess at what the size of the “A.I. market” might be now, let alone what it might become, and we don’t even know what those numbers mean — Sales? Market capitalization? Profits? I have no idea. For context, the United States annual economic output, as measured by GDP, is just shy of $20 trillion. The world’s GDP (or GWP) is closing in on $90 trillion. Will AI, however you describe it, account for 20% of global economic activity?
But anyway, yes, we know that AI is big, and that tech companies and manufacturers and advertisers and product developers and pretty much everyone is trying to use artificial intelligence to make smarter decisions more quickly.
Man, maybe I should get me some of that AI. I do everything slowly, and am rarely as smart as I hope.
So how is one to make money from this idea? Mampilly says he’s identified a catalyst that will bring this technology forward… much like the assembly line was for the automobile, or miniaturization for the computer, or email for the internet. Something that turns a developing technology into a huge economic force.
What is it? Well, let’s see what he says:
“…. this company has developed THE catalyst that will cause the most important technology in the world to reach mass adoption.
“just like people doubted the use of the automobile, computer and internet, people have doubted this technology too!
“That’s because it’s been stuck in this range for the last 30 years.