Can AI pick stocks?
A core part of our daily work at Van Berkom is to prepare for meetings with CEOs, CFOs and industry experts. On average, we meet with over 500 management teams a year. This access gives us a cross section of opinions and insights from decision makers around the world and across industries on many different topics from the war in Ukraine to the banking crisis in the US.
Since the launch of ChatGPT, I had the opportunity to chat about its use cases with many executives. It seems everyone from IT service providers in Buenos Aires to E-commerce platforms in Tokyo is excited about it and is already starting to test its use cases in their core business.
To better understand the hype, we asked ChatGPT which corporate functions are displaceable, and which are not, and its response was:
Displaceable:
- Finance and Accounting: Automate data entry, financial statement preparation, and tax compliance. It can also help identify patterns and anomalies in financial data and provide insights that can inform strategic decision-making.
- Human Resources: Automate candidate screening, onboarding, and performance management. AI-powered tools can also help identify skill gaps and provide personalized training plans to help employees develop skills and advance their careers.
- Customer Service: chatbots and virtual assistants can automate many customer service tasks such as answering frequently asked questions, handling simple inquiries, and routing calls to the appropriate agent.
- Marketing and Sales: automate lead generation, prospecting, and customer segmentation. AI algorithms can also analyze customer data to identify buying patterns and preferences.
- Operations and Logistics: automate inventory management, supply chain optimization, and logistics planning. AI algorithms can also help identify potential bottlenecks and inefficiencies, and provide recommendations for process improvements.
NOT displaceable:
- Strategy and Leadership: AI can provide data-driven insights and recommendations to inform strategic decision-making, but it cannot replace the human element of vision, creativity, and leadership. CEOs and other senior leaders play a critical role in setting the organization’s direction, inspiring and motivating employees, and navigating complex business challenges.
- Innovation and Creativity: AI can analyze data and identify patterns, but it cannot replace human creativity and innovation. Innovation often requires experimentation, risk-taking, and the ability to think outside the box, all of which are uniquely human qualities.
- Ethics and Values: AI can help identify potential ethical and legal risks, but it cannot replace human judgment when it comes to making ethical decisions. Corporate values and ethics are shaped by human values, and it’s up to leaders and employees to uphold them and ensure their reflection in the organization’s actions.
- Customer Relationships: While AI can automate many customer service tasks, it cannot replace human empathy and the ability to build relationships with customers. Aside from empathy, customer relationships are built on trust and understanding, all of which grow with every personal interaction.
- Cultural and Diversity Management: AI can help identify diversity and inclusion gaps and provide recommendations, but again, it cannot replace individual judgment when it comes to managing a diverse and inclusive workforce. Building a culture of inclusivity and respect needs the human touch, and it’s up to leaders and employees to cultivate an environment where people feel valued and respected.
NOT displaceable:
- Strategy and Leadership: AI can provide data-driven insights and recommendations to inform strategic decision-making, but it cannot replace the human element of vision, creativity, and leadership. CEOs and other senior leaders play a critical role in setting the organization’s direction, inspiring and motivating employees, and navigating complex business challenges.
- Innovation and Creativity: AI can analyze data and identify patterns, but it cannot replace human creativity and innovation. Innovation often requires experimentation, risk-taking, and the ability to think outside the box, all of which are uniquely human qualities.
- Ethics and Values: AI can help identify potential ethical and legal risks, but it cannot replace human judgment when it comes to making ethical decisions. Corporate values and ethics are shaped by human values, and it’s up to leaders and employees to uphold them and ensure their reflection in the organization’s actions.
- Customer Relationships: While AI can automate many customer service tasks, it cannot replace human empathy and the ability to build relationships with customers. Aside from empathy, customer relationships are built on trust and understanding, all of which grow with every personal interaction.
- Cultural and Diversity Management: AI can help identify diversity and inclusion gaps and provide recommendations, but again, it cannot replace individual judgment when it comes to managing a diverse and inclusive workforce. Building a culture of inclusivity and respect needs the human touch, and it’s up to leaders and employees to cultivate an environment where people feel valued and respected.
The clear winner from the AI disruption is the position of CEO. As decision makers, they stand to benefit enormously from better and quicker access insights driven by both internal and external data that was neither unavailable or extremely cumbersome to obtain. This explains the palpable excitement we sensed from all our management meetings when the question of AI use case was asked.
Indirectly, that is also a sign of relief for our investment style. As long as companies are run by people who value humanity, our research focus on understanding motivations, character and vision remains a unique edge. In fact, with the democratization of these powerful tools, traditionally accessible only to mega institutions, AI driven analysis will become the new normal. One could argue that access to management and understanding their character and capabilities could become even more crucial to a successful investment thesis. After all, although some say a machine can be perfect, humans are not.
