Counter-intuitive results... what’s the destination with AI? Before reading this, I assumed quantitative analysis would be completely outsourced & human judgement would remain mainly for qualitative analysis.
yes, it can. if you listen objectively to its insights. For example we are in high interest rate environment and will stay that way for short-Mid term.
Look at Chat GPT insights and warnings:
Danger1: Debt Burden: Historically, O-I Glass has had a substantial amount of debt on its balance sheet. High debt can lead to significant interest expenses, which can reduce profitability. It also reduces the company's financial flexibility, potentially making it more vulnerable during economic downturns.
Danger2: Capital Intensity: The glass manufacturing process is capital-intensive, requiring significant investments in plants and equipment. This can limit the company's ability to pivot quickly in response to changing market dynamics.
Danger3: Geopolitical Risks: O-I Glass has a global footprint, exposing it to geopolitical risks, currency fluctuations, and potential trade disruptions. For instance, tariffs or trade wars can increase costs or impact the company's ability to serve certain markets. (China Tarrifs? may be they are circumventing them somehow? are we 1005 sure they manufactor everything from scratch)
Danger 4: Dependence on Key Markets: If a significant portion of O-I's revenues come from specific industries (like alcoholic beverages) or geographies, any negative trend in these sectors could disproportionately impact the company. (is budweiser one of its main buyers? if so will current boycott of Budweiser affect O-I significantly?)
Obviously O-I is significantly difficult to assess, let alone guarantee any reasonable returns. Run same questionaire with chat GPT on ( DGX quest diagnostic or CVS). I bet you will see huge difference. It is giving the answer but we suffer from our own biases because we spend significant time analyzing a company we assume we know it intimately. In case of O-I way too may variables couples with way too many unknowns = PASS do not invest
You still have to think and use your own judgment! We are in a top market historic bubble with a fed hell bend to pop the bubble with interest rates increase and QT. I saw this movie before in 2008!
Counter-intuitive results... what’s the destination with AI? Before reading this, I assumed quantitative analysis would be completely outsourced & human judgement would remain mainly for qualitative analysis.
Great essay Gary - enjoyed the challenge and your thoughtful take on the experiment.
I quite liked the questions to the CEO.
In general I agree with your findings. The answers are quite generic.
Is there a way for different versions of Chat GPT to flag the likelihood of earnings manipulation?
Or using the theory that bad pennies seem to keep turning up, perform some management background checks?
yes, it can. if you listen objectively to its insights. For example we are in high interest rate environment and will stay that way for short-Mid term.
Look at Chat GPT insights and warnings:
Danger1: Debt Burden: Historically, O-I Glass has had a substantial amount of debt on its balance sheet. High debt can lead to significant interest expenses, which can reduce profitability. It also reduces the company's financial flexibility, potentially making it more vulnerable during economic downturns.
Danger2: Capital Intensity: The glass manufacturing process is capital-intensive, requiring significant investments in plants and equipment. This can limit the company's ability to pivot quickly in response to changing market dynamics.
Danger3: Geopolitical Risks: O-I Glass has a global footprint, exposing it to geopolitical risks, currency fluctuations, and potential trade disruptions. For instance, tariffs or trade wars can increase costs or impact the company's ability to serve certain markets. (China Tarrifs? may be they are circumventing them somehow? are we 1005 sure they manufactor everything from scratch)
Danger 4: Dependence on Key Markets: If a significant portion of O-I's revenues come from specific industries (like alcoholic beverages) or geographies, any negative trend in these sectors could disproportionately impact the company. (is budweiser one of its main buyers? if so will current boycott of Budweiser affect O-I significantly?)
Obviously O-I is significantly difficult to assess, let alone guarantee any reasonable returns. Run same questionaire with chat GPT on ( DGX quest diagnostic or CVS). I bet you will see huge difference. It is giving the answer but we suffer from our own biases because we spend significant time analyzing a company we assume we know it intimately. In case of O-I way too may variables couples with way too many unknowns = PASS do not invest
You still have to think and use your own judgment! We are in a top market historic bubble with a fed hell bend to pop the bubble with interest rates increase and QT. I saw this movie before in 2008!