okay good afternoon and welcome everyone to a very very special edition of options plays education on trading with chat GPT and today I'm joined by Jessica Inskip our director of education and product Jessica this is one that is exciting I would say for both of us because we use chat GPT almost on a daily basis for just about everything and based on the size of the audience here in the room right now it seems like this is an exciting topic for viewers as well so Jessica this should be a lot of fun today yeah absolutely something we talk about a lot especially when it first came out and we we use it differently and sometimes the same so I think it's going to be a really great conversation yeah that's exactly right and thank you everyone that's joining us already lighting up the chat um window with your name where you're from you know since there are so many people here on the session it seems like some of you might be brand new to the options play uh education series welcome you know please feel free to type your name where you're from and for those who have joined us before please welcome them uh this is again like I said will be a really fun session but today you know my primary focus is really on the educational aspect of what we do here um every Thursday Jessica and I we come up here and we basically help you better understand best practices around technical analysis around options trading around mindset of profitability really you know what we do here on Thursdays are education sessions is really to empower you to trade sustainably and confidently and I hope some of you are able to join me last Thursday really important session that we joined that we talked about last Thursday and today we're going to do something more fun this is a special that we're doing just on chat gbt because you know a lot of you are using it a lot of have a lot of people have questions and more importantly I think many of you may say you know how do you actually invest in this type of uh transformative technology and those are some of the things we're going to touch up on today's session but before we get started what we are going to discuss here today is purely for education and demonstration purposes it is not a solicitation or recommendation to buy or sell any specific security that you'll see during today's session as example purposes um so we'll start off by talking a little bit about what's the big deal with AI I'm trying to frame up kind of just how big of a deal it really is um I want to talk a little bit about AI model types because it's important to understand kind of the evolution of what we've seen and kind of why it's becoming such a big deal today what the opportunity is from a macro perspective with regards to the impact AI will have on our global economy then we'll talk a little bit specifically about chat GPT um Jessica and I have been using chat TPT for many months now and we've by no means figured out everything there's a lot of stuff underneath the surface so what we're going to try to do is give you some guidance as to you know if you're going to be thinking about how you can leverage chat GPT for your trading for your understanding of the markets you know what are the things that you could potentially do to make it more effective and more useful for you um because um you know this concept of prompt engineering is really important in terms of the responses that you get the quality of the responses you get very much is impacted by the quality of the inputs that you put in so it's important to understand kind of how you want to think about using chat EBT in your in your life really for for for argument's sake and then lastly we're going to explore investment opportunities stocks that have exposure to AI in some way shape or form we're going to talk about them from a technical from a fundamental perspective as well as from a valuation perspective so you get a sense for the landscape and where you potentially could see some opportunity I certainly have some views there um and then and then we'll open this up for Q a here at the very end but the primary thing that I want you to be to be able to walk away from today's session is a clear understanding as to how can chat gbt help me with my trading and how can I invest in AI technology um now before we kind of jump right into it I do want to launch a poll here I want to get a sense for how many of you have used chat GPT just to get a just to get a sense for the audience here in the room um okay so nearly oh actually this is skewing a little bit towards half and half you know initially it was about 80 85 percent now it looks like the room is pretty much split in half in terms of 52 percent of you have said that you've used chat GPT and 48 of you have said you've not used chatgpt okay um I would imagine that even for the 49 of you that have not used chat GPT you probably have heard about it um and hopefully after today's session you might be inspired to sign up for at least a free account and check it out see how it can potentially benefit you um I will certainly give you some ideas as far as how I use it Jessica will do the same thing and we're going to give you a little preview of some of the more interesting ways that you can use chat GPT um for your trading I'll give you a little preview of what I'm working on and what you'll be seeing from us um going forward um all right so you know Jess interesting that half of the room has not used chat GPT yet so we have a pretty pretty diverse audience here um of of attendees so let's jump right into it so let's talk a little bit about what's what's the big deal with AI and the reason that I bring this question up is because machine learning has been around for decades right it's not by any means new so why is it all of a sudden such a big deal um and it really comes down to in my opinion the recent changes that we've seen in computing power and the access to data and the few years of research that needs to to that needs to go into these what we call Deep learning models and I'll discuss kind of what that means in one second but the but the computing power and the access the data the combination of those two things and the investment in leveraging that data and leveraging that computing power to build these deep learning models you know we're really just starting to see the fruition of that work in a more commercial term in a in a in a way that's usable by the public right um that's really what chat gbt has changed you know I think the best way to think about it if you've never used chat GPT or not quite sure what it what it um uh what it can do for you is it effectively gives you access to all the information that's contained in the internet and you can interface with that with that data by simply just typing natural language asking it like you were asking a friend right and it's it's like asking a friend but that friend knows everything that's available out there on the internet is the best way to kind of think about how chat gbt is ref and I think calling it revolutionary is really an understatement as far as what it offers and you know the the the reason that we haven't really seen anything like this before is like I said it comes down to computing power it comes down to access the data but also you know to embark on building chat GPT you know it's estimated that it probably took at least about 100 million dollars in in capital to get here right and the problem with these types of deep learning models is that you embark on these types of projects you have no idea what you're going to get out at the end of it you could end up spending 100 million dollars to get absolutely nothing and it could be a model that's absolutes garbage you have no idea what you what you're going to get at the back end of that so it's a huge amount of risk for anyone to embark on on a venture like this hoping that they're going to get something like Chachi BT at the end of it but you know this is what we have now we've got the first commercial version that is accessible by everyone and and it's really changing the world that we're changing the way that we interact and Jess you know I've spoken enough I would like you to weigh in a little bit as far as you know how chat gbt has really changed the way that you interface with really the internet yeah so um I think there and I see a lot of questions coming through as well we're going to tell you how to capitalize and invest this from a stock perspective so that's important to know this information in addition to how you can use it for trading so as far as picking Securities in addition to enhancing your trading strategy so the way they view it is I've read a lot of studies on it I tend to start conversations just saying I I read this in a study but we when we had the World Wide Web emerge that was the influx of data so we have a lot of data and that affected a lot of verticals so basically every sector that utilized the web and the internet today um we know that they're going to use a table when it first came out they didn't necessarily so those are early adopters and something to be cognizant of and that we'll talk about a little bit later but what that's done is now we have access to everyone committing to data think about how that's Amplified first it starts with Wikipedia blogs um you get web 2 really I suppose is where everything is coming in tick tock's even Amplified so now we have moving in I like to call it the curation of data Revolution so you find Value in apps like ourselves or other people who are access filtration systems because they're experts at smes in their fields and so what this does is it amplifies nutrition which now we're curating data and utilizing only what's applicable putting a filter on what we need but then can also if you have all of the data or all of the language models if you prompt accordingly or you understand how that will affect business structure which translates over to earnings there's a lot that this can do from a stock market perspective yeah um that's exactly right and I think the way that I think about AI the way that the the the models that we have today is that you know if you're an expert in a specific field what AI allows you to do is become far more productive in what you do um you know for example I I happen to have a lot of expertise and technical analysis and what Chachi BT has allowed me to do is build um you know really optimize and test all different types of technical indicators in a very very fast fashion where I used to have to wait for you know quite a bit for of time for coders to build out you know my ideas some theories back test them and then go back to it now I can effectively do all that on my own write code in chat GPT and it does it in a matter of seconds rather than the hours that it used to take me so when you're an expert in something it really allows you to do things far far faster and if and for those of you that don't have any expertise in a specific area for example like for example I have no expertise in in I don't know uh video editing right and AI now has made me become a mediocre video editor with really no knowledge whatsoever but if you are a expert um video editor AI tools have now made your job substantially faster um so from my perspective you know there's a lot of discussions around job job destruction and things like that in terms of its current versions I don't see a lot of that I think what it does it really provides productivity for uh experts in certain fields for to be far more productive and it allows everyone else who's not an expert in any particular field to at least have a working knowledge of those specific fields and that's really what why I think there's such a big deal in terms of AI and like I said you know for for a lot of investors they might say you know these these models have been around for a long time I really don't see why now is the time that is a potential Game Changer in terms of things attachept is certainly a nice party trick but can it really revolutionize the way that we think in the way that we work and this is really where I think it's important to understand you know the different types of AI models and we usually think of this as level three versus level four models level three is really what you know over the last few decades you know has been built in and I certainly have worked with a lot of them what we call supervised learning models and this is really where you have to label specific data sets and then you give a computer the ability to train on that data set so that in the future they can give new data and make similar type predictions and this is largely when we talk about AI in trading for the past 10 years or so it's all been in supervised learning type machine learning algorithms you know right now what you're seeing in terms of the cool stuff right like chat GPT this is This falls into the deep learning category these are unlabeled data sets um this is really what Chachi BT is trained on meaning you don't have to give it um uh sample data and then output it really learns on its own but this but this type of machine learning requires huge data sets and huge amounts of computing power and what it does it's able to find patterns on its own you don't need to kind of feed it patterns and kind of give it hints if you will with supervised learning you gotta have to feed a pattern I feed a data in a specific way for it to discover those patterns with deep learning you don't have to do that you just throw massive amounts of data and massive amounts of computing power at the problem and what you get at the end result is something that's called what we call it kind of a black box like chat GPT we have no idea how Chad gbt works it just works um certainly there are ways where it may not work in certain instances but for the most part it just works and that's really what's interesting about it there's also risks with that as well but that's really what's changing you know right now is the access to deep learning type machine learning algorithms that were not accessible at least for commercial purposes for General use they were kind of used for one specific use case so this is really the opportunity and it's far beyond chat GPT chat GPT just happens to be kind of the the the the flavor of the month if you will but this is really where I think it's going to be truly revolutionary when we think about you know what if you think about the internet 30 years ago we could not have possibly imagined what we're able to do with it now you know same thing you know what we see here with AI we're not even going to be able to fathom what AI is going to look like in 30 years or now so that's really kind of why AI is such a big deal right now and the opportunity is pretty massive now these are numbers these are very much forecast by uh you know Professional Services firms things like that but just to kind of give you some sense you know 15.7 trillion dollars boost to the global economy is estimated by 20 uh sorry that's 20 30 not 2023 that's an estimate by PWC IDC um you know is is estimating that the global software hardware and services market for AI in just 2026 will be 900 billion dollars and the combined market cap across tech semi-conductors software and cyber security alone will be about eight trillion dollars on the AI side so you know we're talking very very very massive numbers in terms of opportunities and that's why we want to talk about you know investing in some of these opportunities uh for the future Jess I don't know if you have anything you want to share there but I do want to walk people through chat GPT and some of the prompts that you can be that you can use to get a better sense for how to utilize it for your trading um Jess I know you have some thoughts on this front so I'm happy for you to take it over at this point especially if you want to share your screen or if you have anything on your end but it's really it's really about um a better understanding how you can interface with chatgpt so that the output that you get from it will be far you far more useful for you than um what you're seeing uh if you were just to use it like a Google search because you absolutely can use it like a Google search but you can get far more meaningful output if you spend a little bit more time on understanding how to prompt catch EBT to give you better outputs yeah so it it's certainly data curation so with Tony's example on the screen we have what is a covered call and we definitely when this first came out Tony and I were going back and forth of what really testing I would say we were testing it's knowledge base so we were trying to understand if Chachi would give us correct information especially when it came to options um we learned that you could correct it and then it would agree but that certainly makes sense because it was trained on the internet which is full of misinformation and we make a business in providing correct information especially on options to brokerage firms and and to clients like yourself so um what's important to know is when you're utilizing this from a trading standpoint or you're trying to say okay what is a covered caller basic strategy we have to check do a Quick Knowledge check so that's basic prompt engineering that it will just give you a quick little output but if we switch to something Advanced and there are layers of advanced so for example if we say how do I pick a stock it'll give you something like okay well you when you pick a security or I put it in earlier or even read it to you um when you pick a security I'm looking for um just is it going up in value um look at financial statements industry and market analysis management and Leadership it's really high level so that isn't really anything helpful so what you can do is you need to you need to tell chat gbt to be a little more granular so you could say something and you for the prompt engineering and I saw a really great article on this one is you give it a directive so you would you would say what it is so you are a expert stock you're a stock market expert you specialize in finding undervalued Securities relative to the market you focus on a balance of fundamental and technical analysis and have a specific methodology that looks for that and then you could even make to that a step further and say that you focus on income but basically what I'm saying for the prompt engineering when you get Advanced is before you even say what you want is you are giving chat sheepy T what it is and that that's just an example from a trading perspective just to choose your underlying security if you want it to choose a strategy then you would build upon that once you've done that then you give it its directive and normally if you do an introduction for chat GPT it will say thank you for the introduction I do this and I I look for I absolutely pick on on good stocks and things like that so that's step number one step number two I would say can you develop a strategy for me on how I can pick a stock based on your expertise and then add a layer further for prompt engineering is you can actually use it for Consulting purposes so know that if you use the free version and you don't have access to the plugins which aren't available yet so that's why we're kind of hesitant in sharing some of the prompts that we do because we play around with it quite a quite a bit um and it can be a little slow when we are screen sharing but you can use it for a Consulting purpose and what I mean by that is um since you know it's trained on um since 2021 is you could say okay this is my trading strategy can you consult with me as if you are Bob Farrell so you can get the feral roles from a technical perspective you can pull in experts that have a lot of data on the internet since 2021 and then they can consult with yourself on your entire strategy so those are ways to amplify from a learning process but how to start from there now what I say what it's working towards and these are things that aren't available to everyone just yet are those API plugins where you can create your own database and that's something that you know we don't want to tease out too much but we're working towards where then you can give prompts and it will pull from something specific just the larger the big hurdle that has to be overcome is just that slew of information but you can mitigate that slew of Internet of information with better prompt engineering is is the correct term anything you want to add to that Tony and you are a mute um yeah so sorry and you're exactly right so there's a whole almost industry now that's built around kind of how to leverage chat gbt in your favor and I'll just give you a very very simple example right and and just kind of gave you some some some thoughts there in terms of how you can uh spend just a few minutes giving chat GPT some information what perspective you want it to to give you feedback on and that's truly kind of where you want to think about this because if you think about chat gbt as just a Google search engine it'll do a pretty good job of giving you information so here's an example of what is a cover called and it gives you this nice paragraph here or a few paragraphs to breaking down you know the basics of a cover call if you've never heard of a cover call before it's a really good starting point in terms of giving you a better understanding at a high level what a cover call is but you can get far more specific and here's here's just an example of this this is by no means what you should do but this is this is just an example of what you can do spending a little bit of time giving chat GPT um some background like create a lesson plan for me to learn how to write cover calls over the next three weeks speak to me as if I was a complete novice and have very little understanding of options then what it does is it spits out a three-week lesson for you and this is really important from my perspective because whenever you're whenever you're coming across something that you don't know right it's hard to ask questions for something that you don't know so for example if you're new to technical analysis and you have no idea what technical indicators are out there well catchy because you can you can ask chat CPT to give you an outline of your popular technical indicators that are used by the market and it'll give you a list so that you can then take that list and start doing some further research so here's an example of a cover call uh plan for someone who's a beginner and I'm only I only showed you four days of this just because it's it's a much longer response that you get but it gives you a sense for what are the different things that you really need to learn in order to master writing cover calls and this is just a very simple example and and Jess was was um you know talking was giving you some examples to go even further than this you know specifically around trading strategies right if you have a specific trading strategy that you want to feedback on you know traditionally you'd have to find someone who's perhaps an expert in that specific field or a specific strategy to be able to get some feedback on this but chat gbt can give you feedback from the perspective of a specific person a specific type of Trader you know for example of let's say you are swing trading and you want a feedback on your specific strategy from a swing trading perspective that's kind of how you can get much better information out of Chachi PT than if you just simply ask what do you think about my strategy does that make sense everyone please type one into the chat window if that makes sense to you all right and and this is an example of going further right let's say today I only have 30 minutes write me the lesson for day one for my cover call course you know tax EBT becomes your teacher you can you can force it or you can you can you can tell it to help you become a teacher in whatever it is that you're looking to learn or get feedback on though we all kind of have things that we are better at and we have things that we're not as good at and this is really helping you better understand um you know the things that you're better at how you can get better and the things that you're not very good at you know what what areas do you need to improve on and this is how I've been using chat GPT predominantly in giving me feedback and giving me um and kind of looking for the the holes that I don't know even exist uh you know I basically help me plug some of those holes because sometimes when I go into something that I don't know very much about it's hard to know where to start in terms of ask asking questions and that's why I prefer letting Chachi BT give me an overview first right give me the lay of the land and then I'll figure out from that lay of the land where I should spend more time learning more about and that's really kind of the the the huge benefits that I see out of Chachi BT with regards to um you know learning how to trade now I know a lot of you are talking about you know how do I actually use Chachi BT to trade and this is something that I've been working on I'm not quite ready to share this just yet but I wanted to show you just the power of chat gbt this is a this is a prop that I put into chat gbt the other day I asked it to create a tech a custom technical indicator on thinkorswim that draws a green arrow with the word Buy on the price chart when the five period CCI crosses a certain threshold the 50 50 periods TCI does something and I was looking for specific um moving average of criteria to to to form together and what it does is it spits out the code for me that it normally would have taken me probably 30 40 minutes to struggle through writing code because that's not my expertise spits it out in a in a literally five seconds and what I do is I plug into thinkorswim I can plug it into other platforms to do my back testing and within a few seconds I know hey this is a good strategy or know the strategy doesn't quite work and I go back to chatgpt I tweak the parameters a little get a new set of code throw it into the back tester and now I can really quickly find optimals and start optimizing option strategies and a rather technical strategies on ideas that I have without requiring someone to write code on my behalf or for me myself to struggle through writing code and some of you have you know basic knowledge of writing code some of you are our software developers right but even for software developers it still would take you even a competent person probably a minimum of 30 minutes to write up these very specific parameters into you know the different uh platforms that you could use and what I've been able to do is test it on thinkorswim and we'll do it on on trading View and these are all platforms that have back testing tools built right into it and this has allowed me without needing the the need of a software developer to really speed up the the process for me to test ideas and test technical strategies um in these trading platforms so I'm going to be doing a whole series just on that alone so I want to show this to you because this is what's coming next um in the next few sessions as I as I do more chat GPT uh related content with trading okay um Jess I don't know if you have anything to add to that oh no it's awesome um and that's where and I saw a question that says is this specific to data that ended in 2021 no that's just how the model was trained so it's how there are specific I'm gonna butcher this and sound terrible because I don't know how to code but the language models that it was taught on to code is up to 2021 and then Tony is testing it on a current platform so it'll spit out code that you can put it in um and that's where it's super helpful yeah um you know I would say from my perspective this is the biggest leap um in terms of productivity in my like day-to-day job with regards to you know trading right because you we all have kind of ideas and one of the one of the benefit you know and most of you here watching today probably have some technical analysis background or leverage technical analysis in your trading and even if you feel that you have a very strong technical strategy one of the benefits of using chat gbt to write code for you is that instead of having to interpret those lines of of technical indicators to decide when it's actually a buy or sell signal what I've basically made chat gbt do is you know I don't have to look at the technical signal it just gives me that Buy Signal so for example if sometimes I'm looking at the technical indicators I'm thinking oh that's close enough to a Buy Signal and I go and take that trade well this builds the discipline to tell me I haven't actually generated a Buy Signal in the current bar I should not be buying so this is really what changed you know the productivity of what I do right and this is an example of I'm I would say that I'm an expert in technical analysis and this allows me to be a far more productive technical analyst out there and for those of you that don't have any technical expertise uh in the next few sessions as to how you can use this to build some basic indicators and some basic strategies around it and start testing it and see how they actually do because you know it's one thing to say I have a technical strategy it's a whole nother thing to say I've back tested it and I know that it works um and that's really hopefully what I'll be able to show you here in the next few sections so that is to come I'm really excited about it and I'm I was really excited to share this with you guys as well um because this is something I've been staying up really late sometimes till two or three in the morning playing around with this because it's just so interesting to me um let's talk about some investment opportunities because as exciting as all this stuff is you know I think we all want to try to profit from this right so let's talk a little bit about some of the more direct investment opportunities in AI you know pros and cons of each one I really want to shash this out and walk you through kind of our thought processes to whether or not some of these quote unquote obvious ideas are great investment opportunities or not um and Jess you know I'll leave this I'll let you leave this off because you have been pounding um the what's the term pounding the pavement no what's the right word for this you've been counting the Jazz chat jbt you've been pounding the tables on on automation for months and months and months now talking about how important you know the technology um companies that are utilizing these types of automation Technologies um are going to be the the new um microsofts and Teslas of of The Next Century and potentially Beyond right and I think Microsoft by all means is probably the most obvious AI investment opportunity at the moment with the exception of Nvidia which we'll talk here in one second because they have a direct exposure to open AI which is the the company that has built chat GPT um so I'll let you introduce the the thought here of Microsoft and why you might think that this is an investment opportunity you know at the current levels that it's trading yeah um and I also want to take a step back too as in why pounding automation because then that goes into the broader picture as well um I was saying that before chat GPT was a thing I just didn't know that it would be AI um and the thought was is because of the tight labor market the huge concerns um inflation wise and the big broader impact the fact that the labor market imbalance right we don't have we have too many jobs not enough people to fill those jobs people didn't come back to work from covid there's a lot of data and so on and so forth but the way to bring equilibrium back into the labor market aside from more people which feels honestly to me was next to Impossible because the FED cannot print people there were times Tony where I go back and forth and I was tracking this immigration Bill and like okay maybe there'll be a labor Supply that way so without the supply the other way to bring equilibrium back into the labor market is through an increase of production and that's done via Automation and before it could be things like like um Salesforce was something that came up because it helps automate processes or zapier things like that that just make companies more efficient that affects the cost and if something affects the the cost that helps with profit margins and so on and forth so that's that's where that thought process came from and then all of a sudden AI got really really big um Microsoft I think was first to Market and that's why important especially when we talk about Google because um they have some really great PR and that's something that we know for what we do every day is you can build some of the the most amazing and best tools that there is but if you don't have the proper marketing or adoption around that then there's it's not going to get the traction that it needs Microsoft even when they released it they grabbed influencers from Tick Tock and have them do Tick Tock lives like crazy or they really got that user base and that demand and everyone's attention by really a wonderful marketing strategy so know that Microsoft got the market share they were first to Market and that's where the hype really began and they had Direct exposure and own open AI that originally founded this um the Asher I saw somebody in there that said can I find um can I create Microsoft Excel formulas you can um there is a wait list or you can add it into Azure where you can actually use the prompts on Word documents PowerPoint and integrated completely into the Microsoft 365 Suite now what's important about that is this is the way we look at it from a revenue perspective now so we talked about how we could use that how's the tool itself to amplify your trading now how does that translate into Revenue where we can pick Securities and how they can have the best Revenue exposure for Microsoft that means Microsoft 365 is something that is at a subscription model and open Ai and other Microsoft products can be used from Enterprises so those are two different revenue streams that can add to positive um or better margins if you will positive earnings and translate to earnings so that's what we look at from a fundamental perspective is who has the most exposure from a revenue perspective who's going to benefit that positively from a revenue perspective um and then Tony's got some great technicals where it's it's keeps finding its major resistance test for a little bit and then something comes out but we just need to make sure that those over hyped valuations are Justified yeah you know you still have a little bit of upside to the next resistance level around 315 the one above that is 340. so you have some upside here in terms of from a technical perspective I do find that the valuation is a little bit more difficult to get behind now that you have earnings come out you know Azure growth has been really strong the Azure growth can in theory remain continue to be strong and potentially even accelerate because of the strong AI Integrations that have now built into Azure and you know when when I talk to uh you know Executives around almost around the globe you know moving over the cloud is almost the number one priority from an infrastructure perspective most in most cases and you know as we think about AI Azure has built these AI tools directly into their Azure services and I and it really does provide a lot of the um uh the the continued growth that we expect to see out of Microsoft so in trading up 28 times forward earnings is not cheap but it's certainly it can be supported because it has a 13 EPS growth uh that we're expecting it has strong margin 50 EPS margins so I I certainly think that Microsoft you know as an AI opportunity belongs in your portfolio but I think probably from my perspective the more interesting one to really look at here is actually alphabet um and the reason I say this is because Microsoft certainly is the first to Market with regards to chat uh chat gbt and you know embedded into Bing but we all know that Bing is really almost a laughing stock as an as a search engine relative to what alphabet offers right um the the game changer was the fact that Bing was going to integrate chat GPD directly into it now here's the thing is that even though alphabet is behind the curve on this they're only behind the curve not in terms of AI technology they're behind a curve in terms of integration and and go to market so from my perspective you know if they were to launch their version of of chat GPT embedded into Google search I would say that Bing has a much tougher time to to compete against that right now they have a far better product but once alphabet gets barred out there I don't think that you're necessarily going to see a huge Advantage from one over the other and Alphabet by all means has by far the largest um uh market share with regards to search so if that's one of the things that I'm thinking about here and I think probably the most interesting thing for alphabet for me is the fact that it's only trading at 19 times forward earnings it's expected to still see 16 EPS growth Which is higher than Microsoft margins are not as strong but that's really where I think that the opportunity is much better from a valuation perspective here on alphabet than in Microsoft just because of where it's currently trading and you know you also think about YouTube and and the growth there um that's really where I think you know in terms of if you had a gun to my head these two I these two companies which compete directly with each other on this front right now I would actually favor alphabet a little bit more than Microsoft even though Microsoft is probably a little bit more in the news at the moment I completely agree um and there's something that's it's it's interesting because I think some of it was a PR issue when they released Bard um it went absolutely terrible um but it they did this so they've been investing in AI for the past five years and they have a lot of really cool stuff that they don't even release to Market because they believe in the responsibility of AI and some of the powerful tools that are there and how that can be absolutely abused if it's in the wrong hands but what I think is really really interesting if going back to open AI some of the original um data scientists that were on openai May are making what I think is the main competitor to open or chat GPT is something called anthropic and anthropic is owned by Google and that is created by the original data scientist for open AI um and what's really interesting is they release that kind of under the radar into slack and anthropic is focused primarily on businesses just maximizing kpis um focusing on amplifying the consumer just what you would think of from from running a business perspective and that is absolutely amazing and also kind of ironic because if you know about the open AIS even in the name their original directive or goal was to to have that not be used for that and now you have people who are involved with that are focusing it primarily on that which I think is interesting so there's a lot that Google is doing and I think they're being careful with sharing it publicly because of their first PR issue and I completely agree with you this has got got a lot of Runway yeah absolutely you know and the reason that the open we have chat CBT today is because you know they were originally Google researchers right they left Google because Google didn't want to publish their work because of concerns around ethics and things like that but I think Google is now going to be forced to launch you know what they have even with some of the ethical concerns that they have because of you know they're they're behind the curveball right now but you know I do think that Google has potentially a lot to offer on this front and arguably has been doing this longer than than anyone else so they have deep expertise on this particular front so you know that's why I think Google is is worth looking at even though I think from a lot of investors perspective Google's way behind the curve uh because of some of those PR mishaps if you will in the early days of the after the uh the Microsoft news of chatgpt um another one that you've you've been talking about for quite some time now and I had taken a bearish position here on Nvidia a couple of months back that hasn't played out that was more of a technical play you have a very strong fundamental view here on Nvidia so why don't you share with us kind of your thoughts on Nvidia um and why you believe it as to be a good investment opportunity yeah so I think it's absolutely overvalued from a PE standpoint but I think that's because Revenue isn't properly accounted for um we are talking about who is going to have the best model this AI War so Google versus Microsoft um and all of the other players in there Adobe and some of the other side where we'll talk about regardless if it has the better model they all require this guy so if there is a demand I think it's forty five thousand dollars for one chip and if they've resolved their other inventory issues then I don't think we know Revenue expectations because we don't even know AI implications or the demand for it um read another study where we've only really tapped into one percent of all of the data so we're on the tip of the iceberg probably poor analogy because I don't want it to be something we run into um but um you know what I mean so so that's why I see this playing out really well is because there is this competition within the AI world and that AI can be used in every single sector you can use it in technology the obvious Bloomberg implemented into their terminal have their own version so there's the finance sector there's some within Health Care um so literally generative AI can be used within every sector there is going to be a competition of who is going to capture the market share of that regardless of whoever develops the best technology they need Nvidia to create that yeah um I saw a comment here saying has Nvidia GPU used for AI been proven or just type in marketing well I I would say that's very much been proven because just about every single major deep learning AI model that's been built out there or trained right there right now are using Nvidia chips to do so for example the the servers that are used to train chat gbt each servers cost about two hundred thousand dollars that's provided by Nvidia you know they needed about a hundred of those to to train chat CPT so just on a capital outlight just in servers alone that was 20 million dollars and they spent probably another 80 to 100 million dollars just in computing power just to run those servers over the last few years to get to where we are today so you know there's just AMD is the other player in this particular space but in videos by far by far ahead of AMD with regards to their specific GPU chips that are used for training AI models um you know we see strong outperformance relative to this uh the semiconductor ETFs the Sox ETF or the Sox index the only thing I that I think that you need to be aware of even though I don't necessarily know that it's a reason to not jump in on Nvidia it's just something that you have to be very careful of with regards to it's just the valuations um it's it's stratiferic is the only way to say it right 61 times forward earnings granted the EPS growth is incredibly strong 36 EPS growth but we do know that chips are softening right we see it across the board Qualcomm AMD Intel everywhere you look even you know Texas Instruments softness in chips that is some of the downside risks that I see in Nvidia my preference is to wait for pullbacks if you're going to be looking at this type of investment opportunity strong margins but this is very much the case of buying high and hoping that it goes higher you know there's no ifs or buts about it because you know your chances of buying low here for NVIDIA just don't exist and it may not exist and you just have to be comfortable with that so you know it's a type of position your portfolio that you have to keep a close eye out on um and also just be just know that that's the risk that you're taking because there really isn't a good alternative right um but I will say that there is you know one alternative which is Taiwan semiconductors just because uh you know while G Nvidia is the brand of chips that are being sold to the general public the actual fabricators of most of those chips is actually in Taiwan semiconductors they're the leader in the two nanometer um chip designs that Nvidia uses for these specific gpus that are for AI um training models so the short-term macro contraction has dented the share price and that's really kind of an opportunity here the major resistance to the next resistance levels not until 100 is currently trading around 82 or so you've got this pullback here potential buying opportunity only trading at 16 times forward earnings it does expect a 22 EPS Decline and that is why it's trading at relatively low um forward earnings but it has very very strong margins you know that's really kind of the interesting thing about Taiwan semiconductors it's definitely worth looking at you know as a semiconductor type stock even though it's a fabricator and not the actual um uh uh and not the actual brand that it's being sold under I saw a couple of comments yes they are building two factories in the U.S um predominantly the rest of the fabrication capacity right now is in Taiwan um which has its geopolitical risks which is part of why I think you know we're seeing diversification on tsm's perspective to you know build in other countries outside of of Taiwan uh specifically the US's and other parts of Asia as well um just anything else you want to add no and lastly what I'll do is you know I would say that those are kind of the obvious ones right the big cat Mega cap obvious investment opportunities with regards to um direct AI exposure right um you know you have some ideas as well you know but just some notable mentions Adobe you know this is a these are more companies that are leveraging AI or in some way shape or form using AI rather than AI companies and Adobe is certainly one you know their new generative Graphics AI which is uh effectively typing in text and it generates an image based on your text input you know this is an example of the deep learning uh machine learning products in use right and Adobe is is one of the companies that have invested in this type of technology and they have their own proprietary um technology for this so if you're a graphics designer you one you're leveraging Adobe very much right now for that graphic design software but if you're now able to build or create Graphics you know on the Fly by just typing in text you know create an image of a teddy bear sitting in Times Square and it just generates that image for you don't have to go take a photograph of it you know it completely changes the landscape of of you know the graphics design industry and Adobe certainly as a leader in that particular space that's an another example of AI related type investment opportunities that currently exist right now Baidu the equivalent of kind of Microsoft Azure or Google cloud in China you know they're releasing their own full AI Stacks similar to what Microsoft Azure currently provides here in the US that's another way to think about you know AI opportunities not just here in the US but overseas and then here's an example of an industry that's negatively impacted by AI is edtech if you look at the education technology providers they're all down huge amounts over the since chat GPT has been released you know it's really because these are the types of companies that will see a negative effect on on AI so those are some of the things to also be aware of is that there are plenty of industries that will see very strong positive influences from AI but there also will be industries that have a negative influence so those are opportunities on both sides so think not only bullish but also potentially some bearish opportunities as well um and Jess I know you had a few names in your um uh notable mentions that are leveraging AI technology that are early adopters that you want to talk through as well yeah so I think that's important to note um and there is another study I'm working on to amplify this but think about going back to the analogy of the World Wide Web or um I guess even Apple new and Innovative features that we couldn't properly evaluate or yet understand which leads to bubble-like capabilities so you know if the word AI tends to amplify a lot of Securities that may not necessarily have the valuation to back it up that's definitely something important to note but if you go back to those early days of the world web and adoption any Securities that utilize that early translates into a productivity Save which is an expense cost which helps those profit margins or net operating expenses which translates into earnings so early adopters you can even see it on the blog for the chat to YouTube plugins and I'm happy to put that in the chat if you'd like as well um but the ones of note that are public Expedia uses a plug-in um uh Shopify dies OpenTable is not public and uh CRM Salesforce so what I what I think is really interesting or what's important to note and watch those types of Securities especially with Shopify they announced layoffs today when we see layoffs you know as sad as that is going just from the view from a stock valuation perspective that's an expense state if you layer that on with an increased productivity then that should translate to better revenues um I see Zillow in there as well so essentially if you find Securities that are early adopters of this type of Technology they should see an increase in productivity and that it's just something that warrants you to watch and then of course layer on your other process but translating into positive earnings thank you so much um that's exactly right and the opportunities in AI in terms of investing I think are pretty broad um and there are but hopefully this gives you some ideas as far as where to start um hopefully this inspires for those of you that 50 of you that said that you've never used chat gbt to consider getting a free account at the very least and play around with it and like I said there's endless amounts of engine of prompt engineering that you can do so play around with kind of providing more information to chat gbt so that you are getting far better outputs because that's really how you're going to be able to leverage it I will say ever since chat gbt has been and I've been using it I the amount the number of Google searches that I've done probably has decreased by at least 80 to 90 and that's pretty insane considering how dependent we have been on Google for very very long time right you know pretty much any question that you have first thing you do you fire up Google you but you know the problem with Google is you do a lot of time scrolling through all the different um ads looking at all of different um different websites finding the information that you need chat GPT kind of just puts the information together for you in a very easy to understand format if you prompted correctly and I will say you know and I stand by this fact chat GPT by no means is a is a a solution for everything right meaning if you're asking it technical questions that you have no expertise in chances are there's going to be errors in that um in the response right and if you didn't know nothing about it and you just take it as truth then you might be believing in what is false information which is why from my perspective it's really important to kind of dive into the data yourself and kind of learn from it rather than just thinking that as like a source of Truth for everything right so when I look at um when I ask you questions about specific technical indicators or option strategies it doesn't always get it right right but what it does is if I ask it to build me a lesson on selling cover calls it gives me that overview I can dive into the overview and get far better information and that's really from my perspective you know what's changed about how I interact effectively with the internet and Google largely has been the this starting point for most users in terms of internet and for me to say that I've reduced my Google usage by probably 80 to 90 is a pretty significant shift in terms of you know how I interface with the internet and that's really the big game changer and why this is such an important Trend to understand and understand where the investment opportunities are and also in terms of where how you can use it for your professional and personal life um with that we've gone 10 minutes over time but this is incredibly exciting you know topic for Jess and I to talk about because we talk about it pretty much to each other every single day for the past few months and CR and you're absolutely right the ad Revenue threat to Google is incredibly large here so that is one of the other things to be aware of and concerned about but that's really where I think that if Google were to release their version of chat GPT into Google search that would largely kind of alleviate a lot of those concerns in my opinion uh from my perspective so with that um so many of you joined us today for the first time because of the size of the audience here I just want to remind those of you that have not had an options Play account you can sign up for a free 30-day trial Jessica and I do education every single Thursday to help you master your process understand technical analysis understand option strategies understand what's going on at the market and occasionally we do specials like this when things are um where we feel relevant to your investment opportunity um and you can use our options play platform to find ideas and we've recently just launched trade um I'm sorry portfolio integration with TD Ameritrade so that you can pull in your TD portfolio into options play and we use our position analysis tools to help you monitor your positions and let you know when there is something to do with your options positions and Rick Benson you're our chief Market strategist helps you time the markets and helps you stay on top of the macro view so for those of you that have never seen options play before I hope that you sign up for a free 30-day trial and join us on our next Thursday session like I said I'm in the process of putting together some cool content on how you can use chat GPT to find optimize and improve your trading um I'll be hosting some sessions both webinar as well as short format video to help you get a better understanding as to how I'm using it to improve my trading so really really excited to share that with you here in the coming weeks but for now what we're going to do is we'll open this up for Q a um there's a chat window and a q a window if you could please type your question into the Q a window um Jessica and I will try to spend a few minutes to answer as many questions as possible and I do want to just um answer one question that I saw from previously there was a question about can I paste the code for that think or Swim indicator that I was talking about here before um you know I gave this the chat CPT this particular prom create a technical indicator for me that generates buy signals based on the strategy that I'm familiar with and part of it was you know just test out you know how well it works but also to create um ways that I can actually back test the types of indicators and I think instead of giving you the code food what I will do is I will give you the prompt so that you can actually get the output yourself and because the output will also be helpful in giving you an understanding as to how to use that output you know it'll describe to you the the code it will tell you how to install it into thinkorswim it has more information in there so I'm going to share with you the prompt that I use to generate that specific technical indicator that generates those buy signals on my chart here in thinkorswim um so let's open this up for Q a uh Jess feel free to chime in if there's any of them that you'd like to answer and I'll try to I'll look at it as well sure there was a fun one related unrelated what's the difference between Gog and g-o-o-g-l well one is a and one is C Class A has more voting rights than C their performance is exactly the same though from a trading perspective we look for volume but it's about the same so um if you want to be involved in voting rights by Class A which is g-o-o-g that's the main difference um so Dean's asking a great question when it returns a lesson plan for example it is it also providing the actual lessons themselves so Dean it does but you have to prompt it to give you those specific lessons right so the lesson plan is meant to give you an overview right and you can say throughout the looking at that lesson plan you can say okay these first three things I'm fairly I'm fairly familiar with I'll skip it so let's start with Section number four where I'm not as familiar and you can ask it to give you that lesson plan and then as it gives you that lesson plan is you have questions you basically ask it as if it was your teacher um but again prompts are really important tell chat GPT you know your perspective say I'm a beginner or say I'm an expert in something it will kind of craft the answers based on what it knows about you so the more you share with chat CBT of your expertise and what you know the better the responses will be tailored to you so you have less back and forth and you get exactly what you're looking for out of chat GPT um there's a question about portfolio integration with Schwab because TD is being integrated into a Schwab eventually it will incorporate both Schwab and TD portfolios into that so the Schwab is not live they expect that to be live hopefully by this fall so by this fall we'll hopefully be able to have both TD and schwa portfolio integration directly into options play I'll answer Rafael's worry sorry if I said that incorrectly if chat gbt remembers your conversation I think that's really important and something I learned the hard way um when you are talking with Chachi PT you actually have individual chats and it saves those chats but you keep those chats as one conversation and I have some that I've had going on for months others I may use for one but meaning if I have one chat where I'm talking about um strategy that's all that chat is for you do not switch subjects and something else that I also learned the hard way that will absolutely help you for those that are venturing into this new journey of utilizing chat GPT is if you don't get the response that you want you actually shouldn't just keep responding and do q a go back and edit your initial prompt and then there you can even add more and more and more and then it will regenerate the response and that is the best way to utilize it yeah um absolutely and there's a question here you know what's my experience with you know it's technical uh with its technical coding ability meaning when I asked chap gbt to write me code how has it been I would say 80 of the time the code that it spits out you know works out of the out of the box um occasionally it has some errors and and it really again this is what I mean in terms of it requires an expertise to know what you're getting and whether it's working the way that you expect it to right you can't just give it a prompt and expect that everything's going to come back clean about 20 of the time there are issues that I have to you know that I either can't figure out or I have to ask the question a different way to get the answer that I need um occasionally it throws in errors and sometimes I even have to dive in the code and try to figure out what the error is um but like I said I'm not a programmer I'm not a software engineer so I have limited capacity to do that but despite that limitation the fact that I'm able to test build and optimize strategies within a few hours that used to take days with me and another software engineer that has specific you know back testing expertise in order to get that done you know that's not cheap to to to to to pay for those types of resources you know the fact that I'm able to do that on my own is really a game changer together oh absolutely I tried to help have it help me code and got snippy with me one time so I made a new chat um but I did learn I told it the error that I was getting so when I would plug it in um and then I told it the error and then it apologized for the error and then showed me where to fix it and then I I realized I had to regenerate the response and say I have zero experience with coding please do this as if I was a sixth grader and then they made it very very easy yeah um and there's a question here from someone that I think is a good segue and to try to answering a bigger question barat's asking is options like doing any AI integration so first of all you know options plays algorithms in the back end were built on years and years of machine learning data right so you know we've been using machine learning for over a decade and that's part of why you know I asked that question why is machine learning and I also such a big deal it really has to do with the fact that deep learning is very different than the supervised learning that we've been doing for the past decade or so or more than decade or so here at options play so you know there's a lot of AI built into you know optimizing these strategies so when you look at the trade ideas that are generated on your on your screen there were countless hours of machine learning and computing power that went into optimizing those strategies to find the specific parameters as to when you generate buy and sell signals so a ton of AI is built directly into to options play but you know I think what would when we when we throw out the term AI today we're referring to kind of these deep learning models where it's just like you ask the you ask you know Chachi BT you know what's the best trading strategy and somehow just spits out a profitable trading strategy that's not how that works it just doesn't work that way if you if we ever wanted to build something where we can just ask a bot you know build me a trading strategy that is profitable in trading options and it actually does so um we would need to be far more advanced not in terms of capability but in terms of computing power and data that we would need to be able to feed a a a a deep learning model to even to potentially get there and like I said you know these deep learning models the risk with embarking on them is the fact that you have no idea where you're going to get out at the end and even even if you get somewhere at the end you will have no idea as to how it works that's kind of the the challenge with some of these deep deep learning models um and you know for every one that we hear about I'm sure there are plenty of deep learning models that basically spent countless dollars and got absolutely nowhere we just don't hear about it um so you know I just want to be clear that we're nowhere near um the ability where you can just type into chat gbt you know build me on a profitable trading strategy and it just does so it doesn't work that way or you know throw it data and it's supposed to just be able to tell you when to buy and when to sell I'm sorry to tell you this you know I've spent the last 10 years doing this with with quants you know and super computers it just doesn't work that way you have to know you have to understand the markets to feed the machine learning you know data points that you know are going to be useful and what machine learning is able to do is find those patterns and maybe break it down into the pattern into signals that are optimized based on the data points that you're giving in it but the idea of just saying build me a profitable strategy unfortunately we're just not there today I see a question from Dennis that says can you give chat gbt your portfolio allocation and ask it to rebalance it with certain Target weightings it probably could do that but what I would say be careful of um it is since it's if you're especially if you're using the free model you're giving it data and you have no idea what it's going to do with it so just be careful of giving it um personal data with that big issue with Samsung where they were putting in proprietary code um there is a setting though if you have the paid version where you can go to the bottom and turn off do not use my data for learning so if that's something that you're concerned with you can absolutely turn that off yeah um let's see lots of questions I don't even know where to start um this is probably like 1995 with the internet it absolutely is like 1995 with the internet and back in 1995 we have no idea what the internet was going to be able to do for us we couldn't even imagine that so I would say that we have no idea what AI is going to bring you know right now we're still training AI imagine once AI trains its own AI um you know that's really when things get really weird in terms of what could potentially happen they have those models too they're software learning it learns from a set of principles rather than data sets so it teaches you give it a goal and it will teach itself how to optimize that task that one scares me thank you yeah um well we have another section like this yes like I said based on the responses that we've gotten from this session the the short answer to your question is absolutely yes I think there will be a likelihood that I will actually dedicate a whole month to this type of stuff I'm yet to see if whether or not I have enough to generate a whole month of of content around this one feature but you know when it comes to testing technical strategies and I know a lot of you guys have an interest in that stuff um I'm definitely going to be putting out both short videos and webinars on how I use chat gbt to do exactly like what you see out here on your screen or even I have no coding knowledge I can build these indicators that interpret technical indicators for me generates the buy and sell signals allows me to back test and optimize and make sure that I'm fully confident in the trading strategies before I execute my first you know live trade using these types of strategies so that's really where I'm I'm gonna I've been spending a lot of time using chat gbt and I'm and I want to share that with you guys so that is coming um soon I like Chris's idea just ask chat gbt for a month's worth of sessions um trust me I've tried that um and I'm sure Jess you have as well but you know it really is um incredible tool and again it doesn't matter whether you're trying to apply this to trading or not think of think of AI tools today as if you're an expert it makes you three to ten times more efficient at what you do if you have no knowledge at something it makes you mediocre at that specific um task right you have no engine you have no knowledge of how to edit a video all of a sudden you're a mediocre video editor you have no idea how to cook all of a sudden you're a mediocre cook like it just changes the way that you can um uh it makes everyone knowledgeable in some shape or fashion and makes experts incredibly more productive any other questions foreign Dean saying you know these sessions remind me of the investment theme sessions that you did two years back which were excellent I have been hoping you'd revisit that format yeah Dean we this is exactly that format but we're kind of revisiting them when we see the opportunity rather than kind of doing them every single month and having to come up with a theme that may not necessarily be you know an investable theme that very moment so you know this is part of why we're we're doing this because it is very relevant and and the opportunity is right now The Prompt engineering you talk about requires you to have a thorough knowledge of the topic no it requires you to have a a basic understanding of how chat GPT works right which is as Jessica was saying is that instead of just asking it a question give it context right tell them tell Chachi BT who you are you know I have no understanding of this specific topic so true so uh you know talk to me as if I'm a beginner and and and let let Chachi PT give you a lay of the land of something that you don't know anything about so that you can get a sense for what are the different topics that you might need to have an understanding before you have a Mastery of that specific topic so you know you know because for example let's say you wanted to master technical analysis if you were to go to Google you'd have to kind of you know you wouldn't know where to start right you wouldn't know what indicators to look at you wouldn't know like how to use those indicators chatgpt can you can say I'm a beginner in technical analysis I'd like to learn um you know and and I have thinkorswim as a platform right you can give it that information and it will tailor what it gives back to you to someone who's going to be able to use thinkorswim who has a beginner and will try to bring it to you in terms that is understandable for someone who doesn't have a technical understanding versus the other way around if let's say you're saying I'm a technical analysis expert um then the response is going to give you is going to be very different than someone who says hey I'm a beginner so prompt engineering is less so about the knowledge of the product I'm sorry of the topic and more so of knowledge of chat GPT and just how to maximize its value there and Jessica and I are I would say as much as we've used it every single day are very much still in the infancy of really exploring the what Chachi PT has to offer which is virtually endless it really is um would it be a little knowledge of python be advisable for coding it would interestingly enough I know nothing about Python and chat species helped me learn that so um yes I think it can amplify what you want to learn and I think that's really helpful um yeah what really has changed my understanding of coding is I can literally copy a snippet of code like python code and tell Chachi BT explain this to me right and that's been another way to learn you know some of this stuff is kind of almost reverse engineering code right otherwise you'd have to go to someone who has python expertise and sit them down and say hey what does this mean now chat GPT is effectively doing that for you so you know those are some of the ways that I've been using it to better understand how I can leverage basic um programming to my advantage and doing some of these back tests that I wasn't able to do before on my own without you know specialized Quant sitting next to me okay with that an hour and 15 minutes has flown by Jessica thank you so much for your time here today this was incredibly fun to do uh away from our typical Thursday options education session but I'm incredibly grateful and and glad that we did this so like I said thank you so much for your support you know the the sheer number of you that have showed up here today lets us know that this is the topic that you guys clearly are very interested in and gives me confidence in doing more work on you know for you guys on showing you how I use chat gbt for you know trading and hopefully you'll be able to learn something from us in the next few weeks as well so thank you so much Jess thank you everyone here today for joining us and hopefully for those of you that have never seen options play before sign up for a free 30-day trial and that's going to allow you to access everything that we have to offer including our trading platform and our Thursday options education sessions thank you so much and have a great trading day thank you everyone