AI disruption, job losses, and investing

[Plata]

Really seems like hysteria at times...the idea that a novel from some research company causes crashes...

I think even now the threat of AI to the US stock market in particular is being under appreciated. I moved to a more defensive stance (still full equities) in the last year or so, with an extra lense of AI vulnerability. If the AI layoff narrative becomes too dominant that alone could cause big problems if too many consumers start dooms day prepping.

[Dolcile]

Really seems like hysteria at times...the idea that a novel from some research company causes crashes...

I think even now the threat of AI to the US stock market in particular is being under appreciated. I moved to a more defensive stance (still full equities) in the last year or so, with an extra lense of AI vulnerability. If the AI layoff narrative becomes too dominant that alone could cause big problems if too many consumers start dooms day prepping.

Hey Plata, could you elaborate on how you moved to a more defensive stance while remaining in equities? Thank you

[Plata]

In my situation I mainly reduced ASX200 exposure (banking seems vulnerable to AI unemployment, overall valuations seem high) and rotated into stocks whos business models are comparatively less sensitive to:
-Economic slowdown.
-An AI crash from AI not being as good as it promises.
-A consumption crash from mass unemployment in the event AI is as good as it promises.

For example, NZX:VHP. CPI linked leases to private healthcare. Even in downturns their customers tend to remain profitable and so the rent keeps coming in. NZX:RAD. Non-premium aged care is generally necessity based in my view, and unlikely to be impacted from any of the above in a major way. NZX:GNE, NZX:MCY, these are somewhat more sensitive to economic slowdown or mass unemployment, but still pretty robust IMO. I'm also watching NZX:NZL for a lower entry point, hard to see how CPI linked leases on farmland could go too wrong & dividend per share should be approaching 6 CPS in the next 3 years as per their forecasts.

I was very overweight ASX200 to begin with though and I must say my choice to rotate out has proven slightly net negative at current prices. Oh well.