After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.

 

Boy do we live in exciting times.

Thanks to my new toy ChatGPT, I no longer have to come up with anything to write about, as it can do it all for me.

No one will ever know and I can get on with better things to do my end, without ever having to come up with one more story.

So, to start off my new way of doing things, I asked my new friend for ideas on ‘What is a good title for a story on AI?’

It came back with these 10 suggestions:

Ten titles to choose from and my favourite was number 4: ‘Artificial Intelligence: The Rebellion’.

Mrs Broker’s was number 9: ‘The Next Frontier: A Story on AI and Humanity’, as she is far more of a romantic than me.

I thought mine sounded more David Bowie(ish) and very hip and cool, whilst hers I thought sounded more Greta Thunberg(ish), i.e. very long and very boring.

Ten suggestions – and that is just for the title.

I’m starting to think that this new time-saving friend is going to create more work for me, rather than less.

‘Damn you machines’ I cry, as I get (back) out my trusty old typewriter and bottle of crusty tippex.

If you are too young to know what tippex is and what it does, try ‘ChatGPTing’ it or go for a bit of the old-fashioned ‘Googling’.

Can’t be bothered as it’s all too hard? Here, I’ll do it for you:

There you go. You get a result and no advertisement in sight. (And a correction for my mauling of “tippex”.)

This was actually what I pointed out in my predictions for 2023, that AI will hurt Google’s business model. It’s at No 10.

And boy, has this prediction already come true and it’s starting to hurt Googles’ parent company share price, which fell by 8% on Wednesday night US time or just a lazy A$140bn in wiped out market valuation. The next day, it fell a further 5%.

Now, the main reason for their sell-off is that they appeared to have hurried out a presentation and in it they showed off their AI answer to ChatGPT and presented a hypothetical question followed by their AI machine’s answer.

Problem was that the answer was incorrect. Ouch. In their rush to show the world how great their AI solution is, no one had fact checked their own answers.

A company with over 180,000 employees and worth US$1,375bn (when they started to present), had made such a basic mistake that everyone in the room was stunned.

Normally, you’d expect a very slick and well oiled presentation from Google but this just showed a chink in their armour.

Market confidence has been rattled and in my experience, it is going to be very hard to come back from this one.

When Cadbury had a disaster in mid-2006, after a leaking pipe in the company’s Marlbrook factory led to 40 cases of salmonella exposure, they had to recall £20m worth of product which led to a confidence disaster after the public lost their trust in them.

Their answer was to have a gorilla playing the drums. This simple 60-second advert managed to turn the tables around, brilliantly:

So you can sort out the public easily enough. As for the financial guardians, it’s not as simple as running an advert with a gorilla in it.

Maybe they need to do a series of ads where they show people scoring spectacular own goals on a soccer pitch.

But hang on, we have ChatGPT to ask what they should do to gain back investor confidence.

Simples! It came back with six suggestions.

  • Improve transparency
  • Address any past issues
  • Focus on business growth
  • Enhance corporate governance
  • Engage with stakeholders
  • Meet financial targets

Funnily enough, these are all things that we would use when one of our sponsored companies had managed to create their own disaster. It also included lots of one-on-ones with the companies’ CEO and fund managers.

So I think we are going to see a lot of grovelling and maybe (and I never ever thought I would ever be typing out these words) they need to take a leaf out of Elon Musk’s book on how to handle a PR disaster.

He actually sat in silence, whilst Tesla was on an earnings conference call, then piped up at the last minute with some words.

Everyone was thinking for the whole call ‘he’s not here, he’s over at Twitter HQ, having sold down most of his holdings, he doesn’t care about us’. Then bang – he was there the whole time.

Ever since he did that, Tesla’s shares have made a spectacular recovery and gone up 69% in the space of a month.

For Google, this would mean that the two founders need to be in the room or seen to be rolling up their sleeves and getting involved again.

Nothing like a billionaire founder grovelling to a 35-year-old fund manger and eating a large amount of humble pie.

So, the next few months are going to be interesting for Google’s parent company, with a few heads rolling and I suspect, a couple of new board members arriving at HQ.

I dare say it but this could be their ‘Kodak’ moment and the start of their demise, after 25 years of domination.

I can feel it comin’ in the air tonight! Oh Lord!

 

The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at [email protected].

Feel free to contact him with your best stock tips and ideas.

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