With OpenAI's ChatGPT getting a lot of attention, Morningstar's Jocelyn Jovene asked it for "the best strategy to make money in the stock market."
The response, she writes, was "pure Buffett" and "pretty much in line with what we say at Morningstar."
I gave it a try by going in the other direction, asking ChatGPT for "Warren Buffett's specific investing advice for most people."
Warren Buffett has given a number of specific investing advice for most people over the years. Some of his key recommendations include:
Start early: One of the keys to building wealth through investing is starting early, as this allows you to take advantage of the power of compound interest. The earlier you start investing, the more time you have to let your money grow.
Invest for the long term: Rather than trying to time the market or make short-term trades, Buffett advises investors to focus on long-term holding and to ride out short-term fluctuations in the market.
Diversify your portfolio: Buffett emphasizes the importance of diversification in a well-rounded investment portfolio, which involves spreading your money across a variety of asset classes and industries.
Focus on value: Buffett is a firm believer in the principle of value investing, which involves buying undervalued assets that have the potential to increase in value over time. He advises investors to look beyond the current market price of a stock and instead focus on its intrinsic value, based on the company's future earnings potential and growth prospects.
Avoid excessive fees: Buffett advises investors to minimize their investment costs by avoiding mutual funds and other investment vehicles with high fees. He suggests that most investors can achieve satisfactory returns by simply investing in a low-cost index fund.
Avoid debt: Buffett advises investors to avoid taking on excessive debt, as this can increase the risk of financial setbacks and limit your investment options.
Be patient: Finally, Buffett advises investors to be patient and to avoid making impulsive decisions based on market hype or fear. He suggests taking a long-term view and being disciplined in your approach to investing.
Not bad for a few seconds of computing time, although I think Buffett is not as big a fan of diversification as ChatGPT does. (See "Diversification is a protection against ignorance" from the 1996 annual meeting and "Diversification is for the know-nothing investor" in 2008.)
And since I asked about advice for most people, I would have put investing in a low-cost index fund much higher in the list.
If you're interested in some historical speculation, I also asked ChatGPT to imagine a conversation between Warren Buffett and Karl Marx on capitalism and have put the results on Post News.