May 17, 2023

The Appetizer

“I think old-fashioned intelligence works pretty well.”

• Charlie Munger commenting on the possibilities of artificial intelligence.

Now, on to the numbers. Drum roll, please …

• 2: How many months it took ChatGPT to reach 100 million users. For context, it took Facebook and WhatsApp 42 and 49 months to each reach this level, respectively.
• 86 feet: The size of the wave that Sebastian Steudtner conquered, setting the record for the biggest wave ever surfed.
• 192%: The per-week increase in the number of Microsoft Teams meetings and calls at work since February 2020.
• $28,855: How much more recent undergraduates expect to make ($84,855) one year after graduation versus the average starting salary for recent grads ($56,000).
• 1,072: The number of mentions of AI on company earnings calls, more than double from a year ago.
• 0%: The amount that is now needed for a down payment on a home in the UK, the first time since 2008 that mortgage products have been offered at this rate.

Dig In
Sell in May?

We understand if you’re tempted to follow the old saying about selling in May then going away – the S&P 500 is up over 8%, and there’s still lots to resolve before we find balance on a number of topics that got us into a bear market in the first place. Let’s recap:

Higher interest rates fueled some bank troubles, the Federal Reserve (Fed) hiked rates another 75 basis points, and we have yet to see the lagging effects of monetary policy tightening. Additionally, the U.S. government risks defaulting on its debt for the first time, and there’s still heightened geopolitical risks hanging around.

So, yeah … a summer vacation from investing looks tempting.

Before you go anywhere, though, remember that time in the market, not timing the market, is critical for long-term investment success. If you sold the S&P 500 in May and went away until November in each of the past 20 years, you would have missed out on nearly 2% in average growth each year. Further, missing the 10 best trading days of the past 20 years would have reduced your annual returns by 4.2% (annualized).

For now, we’ll have to weather uncertainty and volatility, but we’re looking for signs of balance as the year progresses.

Weekly Specials

Snakes on a spaceship! No, it’s not Samuel L. Jackson’s next movie – it’s a robot that NASA hopes could find life on a frozen moon. Enceladus, one of Saturn’s 83 known moons, intrigues scientists because it has a liquid ocean underneath an icy surface.

It’s never great to have your flight canceled or significantly delayed, but new rules proposed by the U.S. Transportation Department could mean compensation for meals and hotel stays to stranded passengers.

Facebook, caught in TikTok’s shadow, aims to regain coolness by using AI, reel sharing, and integrated messaging to win back the age 12-34 crowd, who find it “cheugy.” While 3 billion users remain, they skew older.

They got caught with how much!? Israeli officials confiscated 661 pounds of Fruit Roll-Ups that two couples tried to smuggle into Israel … and that was just one attempt. A viral TikTok trend that involves wrapping ice cream inside the candy has led to high demand and price spikes in Israel.

The consumer price index took a chill pill and eased to 4.9% on a year-over-year basis last month, down from 5% in March. That’s a small victory, but inflation is still above what the Fed wants. Will the Fed pause rate hikes in June? The market seems to think so.

Corporate Lunch

Amazon, the master of convenience, now wants you to work for your own package. They’re offering a whopping $10 to pick up your own package. You get the joy of doing their job, and they save a few bucks. Talk about “Prime” labor.

Low-cost European carrier Ryanair went on a shopping spree, ordering 150 737 MAX aircrafts from Boeing.

Wendy’s is taking the fast food experience to a whole new level. The company is rolling out AI chatbots to take drive-thru orders.

Get ready for some top secret tweeting. Twitter might be launching the ability to send encrypted direct messages … uh oh.

Microsoft has signed a power purchase agreement to buy electricity from nuclear fusion startup Helion starting in 2028. This could be a step to generate nearly unlimited clean power.

Volkswagen’s shareholder meeting got wild! Protestors gathered to put pressure on the company over its climate and China strategies, stating they are “making climate-damaging decisions.”

As the U.S. and EU are investing in the transition to a low-carbon economy, Norway is spooking investors by considering taxes on wind farms.