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FRI, SEP 20, 2024
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New ETF uses AI chat bots to emulate Buffett and other 'great' investors |
A one-person start-up launched an ETF this week that uses AI large language models (LLM) to "build a global equity portfolio inspired by the world’s greatest investors," including Warren Buffett.
The Intelligent Livermore ETF's ticker symbol is LIVR. It is named after day trading pioneer Jesse Livermore who gained fame by going short just before the 1929 Wall Street crash.)
Intelligent Alpha Founder and CEO Doug Clinton told Fortune he created an "investment committee" with OpenAI's ChatGPT, Google's Gemini, and Anthropic's Claude.
They analyze the philosophies and strategies of a selection of "great investors" including Buffett, Stanley Druckenmiller, and David Tepper, by parsing their public letters, statements, and interviews.
(None of those names appear in either the news release or prospectus, presumably for legal reasons.) A human analyst sets the "intended strategy" for the portfolio and reviews the stocks generated by the LLMs to make sure they fit that strategy.
The $3 million ETF's top three holdings are Meta, NVIDIA, and Taiwan Semiconductor. It has a management fee of 0.69%.
(Last year, Berkshire sold a $4 billion-plus position in TSM, acquired just months before, because he was concerned about tensions between Taiwan and China.) |
In an interview on CNBC's "Squawk Box," Clinton said unlike previous approaches involving traditional machine learning, which sort through large amounts of what he calls "noisy" data to create algorithms, testing shows his LLM approach is superior because it combines "good" data with an instruction set that encapsulates a philosophy about how to think about the world as an investor who isn't "susceptible" to human emotional swings.
"They can sort of replicate or pretend to be any investor. That's one of the superpowers of AI,” Clinton told Fortune. "You could have it be a super aggressive growth investor, or you could have it be a super value conscious Buffett acolyte.”
The latter will presumably be the strategy of the Intelligent Omaha ETF, ticker symbol AIWB, which is one of several funds still in the works. A prospectus says it will have an "emphasis on returns on invested capital, enduring business models with the ability to serve customers for long periods of time, and long-term business ownership." |
Bank of America sales top $8 billion, leaving $34B in 'pure profit' |
After a four-session pause, Berkshire Hathaway resumed its sales of Bank of America shares, raising its total proceeds above $8 billion and cutting its holdings by 19.1% over two months. On Tuesday, Wednesday, and yesterday, it unloaded a total of 22.3 million shares for $896 million. The average price was $40.23.
Yesterday's 11.4 million shares was the third largest one-day reduction since Berkshire sold more than 12 million shares on two days in mid-July as it started to cut back the position. |
Berkshire still has, as of yesterday, 835.9 million shares with a market value of $33.7 billion at today's close of $40.27. Its 10.8% stake in the bank is getter closer to the 10% level at which it will no longer be required to quickly disclose further sales.
Bloomberg estimates the $8 billion from stock sales, combined with dividends received since 2011, have covered the $14.6 billion Berkshire paid to build its stake, leaving him with roughly $34 billion in "pure profit."
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'We'll get it figured out pretty quickly' |
Howard Buffett says his father is right: "It’s not so easy to give away money if you want to do it smart, if you want to be intelligent about it."
Warren Buffett recently confirmed that when he dies, donations to the Gates Foundation will stop and his children will be deciding what to do with the remaining money.
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Howard Buffett speaks to CNBC at the 2023 Berkshire Hathaway annual meeting in Omaha. Photo: CNBC | David Grogan |
In a piece about how the "next generation of Buffetts — Howard, Susie and Peter — is poised to become one of the most powerful forces in philanthropy," the Associated Press quotes Buffett's eldest son as saying the three siblings have different ways of thinking and approaches to giving, but he thinks that's a plus.
"What this is going to do is we’re going to bring all of our collective experience together."
And while meeting his father's directive of donating all the money within a decade will be tough, "I can tell you, we’ll sit down in a room when the time comes, and we’ll get it figured out pretty quickly." |
BUFFETT AROUND THE INTERNET Some links may require a subscription |
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HIGHLIGHTS FROM THE ARCHIVE |
Buffett on charities: 'Go with your gut' (2006) |
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Sep. 20, 2024 |
Berkshire's top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.
Holdings are as of June 30, 2024 as reported in Berkshire Hathaway's 13F filing on August 14, 2024, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker. |
Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.) If you aren't already subscribed to this newsletter, you can sign up here. Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.
-- Alex Crippen, Editor, Warren Buffett Watch |
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