Semi-conductor / AI stocks discussion.
I’ve been writing about investing and the EMH [1] on lesswrong/rat-discord/ea-facebook/etc. I made the first ‘buy solana’ post on the EA investing group when it was under 2 dollars in late 2020 (it peaked at 260 in 2021). Despite crypto crashing and FTX stealing user deposits I got my money out and I’ve had a very good two years investing. Post tax I multiply my net worth by about a factor of eight; my starting net worth was not small. My income during this period wasn’t significant compared to my portfolio size. However some friends really wish I had been posting more systematically. I ‘sold the top’ but many people I got into Solana didn’t. So me and some friends are going to regularly post on twitter. Please follow us [2] if you want updates systematically!
Anyone who thinks AI is going to be transformative should allow this to inform their investing. Im interested in how other EAs are investing! I think the EA community seriously undervalues ‘taking care of each other’ and we should share our thoughts. Here are some brief thoughts on stocks we like for this purpose, mostly semis:
1) TSM—Significant technical lead on other semi-conductor companies. Only close on technology competitor is Samsung. PE ratio of 17! Probably the most important company in the world right now. Only downside is risk China invades Taiwan. Pure semis play.
2) Google—Owns Deep Mind and Google Brain. Huge piles of money and data to train AI. PE of 19. Downside: Ad revenue slipping.
3) Samsung—Only serious technical competitor to TSM. Insanely low PE of 8.58. Downside: not a very pure semis play.
4) Nvidia—Still the leader in designing GPUs. In house AI research. Downsides: Doesn’t manufacture their own chips, high PE ratio of 55.
5) ASML—Makes hardware for semi-conductor fabs. Almost a monopoly in lithography. Downside: pretty high PE 36+.
6) Intel—Still does good work designing chips. Huge struggles to manufacture sub 10nm chips in-house (TSM and Samsung have 3nm in production). Committed a ton of fraud. However the US government is wisely trying to increase domestic semis production and Intel is a US Company.
7) Other stocks I’m considering: Microsoft (open AI), Micron (memory play), Meta (just released diplomacy AI. Heavily over-represented in the ‘EA’ portfolio), Tesla (good in-house AI).
This is a good article by @asteriskmgzn is quite good. https://asteriskmag.com/issues/1/china-s-silicon-future
Notes:
1) Please be good rationalists and don’t argue about the EMH. If you believe in the EMH just don’t post.
2) We choose the name ‘Dickgirls Research’ because all the founders are transgirls and we think its a hilarious name.
Thanks for the post, sapphire. I’d also really like if EA had more of a ‘taking care of each other’ vibe (I was envious when hearing about early discussion on the LessWrong forum about Bitcoin and wish there was something similar in EA). I’ll definitely be following you on Twitter.
On semiconductor stocks I’ve also gone for Applied Materials (AMAT), as well as TSM, AMSL, Google and SOXX.
Can you make the case for AMAT?
I wish I had of written down my reasoning because I can’t remember haha. I’ll have a search around to see why I thought they were good to invest in and get back to you.
In terms of TSM, AMSL and AMAT, I’m investing in them at a 2:2:1 ratio.