Predictions and Speculations on the US Stock Market

Coin World News Report:
1. Ma Yun also bought a lidar and started researching it. He felt that the pure visual automatic driving solution was not as stable as the Hongmeng Zhixing’s lidar and visual intelligent driving solution.
Although Tesla’s solution also incorporates lidar, overall it is still a visual intelligence solution. There is still a significant difference between this solution and the lidar solution that uses lidar.
The key difference between the two lies in the processing of data.
In my understanding, the visual intelligence solution uses artificial intelligence to imitate the human brain’s judgment of the environment and driving to handle problems encountered during the driving process. On the other hand, the lidar solution is more similar to a traditional rule-based processing method.
Coincidentally, I have read several books on artificial intelligence and ChatGPT recently.
In my understanding, before ChatGPT, the reason why a series of other artificial intelligence (especially “natural language processing”) solutions did not achieve the success they have today is mainly because people have been using a long-established viewpoint for research, which is:
Machine learning means feeding machines with rules and patterns summarized by humans, so that the machine can compare thousands of rules stored in its memory to select a solution for each data it processes.
However, the rules in the real world are infinite, especially a lot of “hidden rules” that only exist in our brains. We can only understand them without being able to put them into words. It is difficult to describe them in language, let alone input them into machines.
On the other hand, GPT takes a completely different approach. It does not tell the machine the rules summarized by humans, but only feeds the machine with real data and results, allowing the machine to compare and adjust parameters by itself, thereby training its own “understanding” of the world.
The result of doing so is that we do not know why the machine can understand this world and what rules it has discovered. However, we do know that training machines in this way can bring them very close to or even surpass human brains in terms of neural computing.
Therefore, I am more inclined to believe that the visual intelligence solution is a more suitable solution for autonomous driving because it achieves the same effect as human driving and can even surpass human performance.
2. Warren Buffett has recently been reducing his holdings of US stocks. How should we interpret his selling behavior? Has he seen any risks?
I have shared my understanding of similar questions in my previous articles.
I believe that many people are reading too much into what Mr. Buffett is doing.
Mr. Buffett has said similar things at shareholder meetings more than once, such as:
“I have said that I will not predict the market, and I will not predict macro risks, but people always don’t believe it.”
The reasons for Mr. Buffett’s stock sales, as I have listed in my previous articles, are the reasons stated by Mr. Buffett himself. I can list them again:
– His insurance company needs cash to hedge risks.
– He feels that the price of a stock is too high and may far exceed its intrinsic value.
– He has found other stocks that are more worthy of buying than the stocks he sold, or he needs cash to acquire a company that is worth buying in full.
These are the reasons stated above.
After reading some of Mr. Buffett’s books, I think he often talks about very basic principles, but most people do not pay attention to these principles, do not believe in them, and are more interested in shortcuts, speculation, and taking advantage.
3. Currently, the overall level of the US stock market is at a historical high, and the Dow Jones Index continues to hit new highs. Once the US stock market adjusts, will it collapse and will individual stocks generally experience a downturn?
In the past, I used to care a lot about the possible financial risks that might occur in the financial market, and I would actively try to predict and speculate in order to avoid such major declines.
However, after reading Mr. Buffett’s books this year, my inner peace has increased a lot, and my fear of these potential risks has decreased significantly. I also have less urge to predict and speculate.
Sometimes, even if I make some predictions and speculations, it is more of a casual behavior without too much persistence and seriousness.
This is probably the most valuable treasure I have gained in my heart over the years.
Returning to the question.
The US stock market will definitely experience adjustments and even a stock market crash, but when it will happen and to what extent the decline will be is difficult to predict. It could be tomorrow, or it could be next year, or even several years later.
But I think this is not important. What is important is:
If you are investing in individual US stocks, then consider whether the current price of the stock is overvalued and far exceeds its intrinsic value.
If this is difficult to judge, then abstract a bit and think about whether this company has the potential to continue leading the pack and achieve greatness in the future.
If this is also difficult to judge, then consider whether the leader of this company is a once-in-a-lifetime, once-in-a-century, or even once-in-a-millennium genius.
If you are investing in US stock indexes, then think about whether the current performance of the index is significantly higher than the actual situation of the US economy.
If this is difficult to judge, then think about how the long-term future of the US economy will be.
Whether it is individual US stocks or US stock indexes, I believe that the ultimate judgment criterion is a sentence spoken by Mr. Buffett, which I have shared in my articles before and will share again now:
As long as the United States adheres to a market economy and the rule of law, American companies will continue to create miracles and generate wealth.
Therefore, if we judge that the United States can do these two things, even if the US stock market encounters risks, they are only temporary. There will be a day when it will shine again. At present, we only need to consider whether we can bear this temporary risk. If we judge that the United States cannot do these two things, then we should leave the US stock market without hesitation.
The masters I have read mostly consider whether they can bear the potential risks, and they generally ignore when the risks will come and how severe they will be.