“I used to tell lies. But I’ve given it up, because the field has become overrun with amateurs,” said the great American 19th century humorist, Mark Twain.
(PSO), (IBM), (CHGG), (LPL), (NVDA), (AMZN)
What if textbooks could read you as well as you read them? That's the promise of AI-powered learning.
But what exactly does this AI-powered future look like?
First, forget those dusty, static tomes of your school days. Instead, get with the times and think of textbooks that learn with you, adjusting their content and pace to match your individual needs.
They'll pinpoint your strengths and weaknesses faster than a Wall Street analyst spotting a market trend, and deliver personalized lessons and feedback in real-time.
These digital marvels will assess a student's grasp of calculus quicker than you can say "derivative," serving up personalized content faster than a short-order cook on amphetamines.
We're talking real-time feedback, custom-tailored lessons, and engagement levels that'll make social media look boring.
For the class dunce, it's extra help. For the whiz kid, it's brain fuel.
Basically, using AI textbooks is like having a tutor that never sleeps, doesn't charge by the hour, and won't judge you for showing up in your pajamas.
And trust me, this isn't some pie-in-the-sky idea that only appeals to educators. In fact, it's already shaping up to be a multi-billion dollar goldmine for sharp-eyed investors.
Let's start with the big picture. The broader education technology (EdTech) market is on track to explode to a mind-boggling $404 billion by 2025.
We're not talking about a gentle uptick here. This is the kind of growth that makes the Gold Rush look like a garage sale.
Zoom in a bit, and you'll see the “AI in Education” market is estimated to grow at a jaw-dropping CAGR of 47% from 2021 to 2027, reaching $3.68 billion by 2023.
And the global textbook market? It's set to hit a cool $20.6 billion by 2026, growing at a steady 3.4% CAGR from 2021.
But here's the kicker: AI-powered textbooks are poised to disrupt this entire industry faster than you can say "digital transformation."
Don't just take my word for it, though. Look at what's already happening in the real world.
Carnegie Learning's MATHia uses AI to make math less painful than a root canal. DreamBox Learning adapts to students faster than a chameleon on a disco floor.
And Duolingo? They're making language learning more addictive than your favorite smartphone game.
Needless to say, AI isn’t just about cool tech toys anymore. It’s also reshaping how we learn.
Studies show these interactive, personalized experiences can boost student engagement by up to 60%.
And it's not just the tech nerds who are excited. A survey by EdWeek Research Center found that 66% of teachers believe AI can personalize learning for students.
When was the last time 66% of teachers agreed on anything?
Meanwhile, venture capitalists, those professional gamblers of the finance world, poured a record $16.1 billion into EdTech in 2020.
That's not just putting your money where your mouth is—it's stuffing your entire wallet down your throat and asking for seconds.
So, who are the players in this educational gold rush? Let's start with the old guard.
Pearson PLC (PSO) is using AI for everything from adaptive learning to automated grading. They’re looking to partner with IBM (IBM) and its Watson AI, creating a brain trust that would make Einstein look like a slack-jawed yokel.
Chegg (CHGG) is another one to watch. It uses AI to solve problems and catch plagiarists quicker than a frat house can empty a keg.
But it's not just the education-specific players making moves.
Tech giants are stepping into the classroom. LG Electronics (LPL) is expanding into the education sector faster than a teenager's excuse for missing homework.
NVIDIA (NVDA) is providing the raw computing power, Amazon (AMZN) is offering the cloud infrastructure, and IBM is bringing its AI expertise to the table.
It's like the Avengers of AI, but instead of saving the world, they're trying to make sure little Timmy finally grasps fractions.
And the future of edtech? It's so bright, you might need to wear shades in the classroom.
We're talking VR field trips to ancient Rome, AI tutors that make Socrates look like a slacker, and learning analytics that can predict academic success better than a helicopter parent.
I know that for some of us, passing notes was high-tech classroom communication. Obviously, everything we know about school has changed since then.
Now, AI is writing the whole textbook. I suggest you start studying this sector now, or risk being left back a grade in the school of profitable opportunities.
Mad Hedge Technology Letter
August 14, 2024
Fiat Lux
Featured Trade:
(POSITIVE SIGNAL FOR THE TECH RALLY)
($COMPQ), ($TNX)
We received highly bullish news from the fiscal policy side today.
Conditions are everything in the short-term which is why macro events sometimes steal the whole show by destroying or propping up market sentiment.
Scare events can shock investors and become the impetus to take profits to protect capital.
Fortunately, the data from the CPI index has most likely given the green light for the US Central Bank to officially initiate its easing cycle next month.
My guess is that Fed Governor Jerome Powell cuts by 25 basis points and it could turn out to be a hawkish cut.
This is massively bullish for tech stocks ($COMPQ) leading up to the next earnings report in October.
This sets the backdrop for tech stocks to motor towards the upper left in upcoming months.
Lower rates ($TNX) translate into lower costs of capital for tech stocks to borrow money for paying stuff like salaries, software, and hardware.
The high-rate environment has translated into a dearth of companies going public and has stifled the creative juices at the formative stages of Silicon Valley.
That last jobs report offered new signs of a cooling labor market, which stoked fears that the Fed may have waited too long to start lowering interest rates after keeping them at a 23-year high for the last year.
A milder inflation reading released Wednesday removes one of the last hurdles the Federal Reserve needed to clear before cutting rates in September.
The Consumer Price Index (CPI) increased 2.9% over the prior year in July, down from June's 3% annual gain in prices. On a "core" basis, which strips out the more volatile costs of food and gas, prices in July climbed 3.2% over last year — down from 3.3% in June. That was the smallest increase since April 2021.
The new numbers are the latest confirmation that inflation is in fact dropping off a cliff after heating back up during the first quarter of the year, a development that prompted the Fed to warn at one point that rates would likely stay higher for longer.
Fed Chair Jerome Powell made it clear at the end of last month that a cut in September was “on the table” as long as the data supported it. He and other policymakers have said they want to be sure that inflation is in fact moving “sustainably” down to their 2% goal.
Tech stocks have positively correlated with interest yields since 2020, which is counterintuitive.
What this really means is that the growth rate of tech has overpowered the 5% Fed Funds rate which is quite impressive.
That high rate was supposed to pummel tech stocks and that fear-mongering failed to materialize.
No doubt the AI boom delivered a helping hand to tech shares as well.
Tech stocks were one of the few sectors in the public market that remained attractive in the face of aggressive rate hikes.
With the Fed almost to the point of reversing hawkish policy, I do believe it is “all systems go” for tech stocks in the short-term and this removes yet another possible black swan event off the table.
I am bullish on tech shares in the short-term.
“I believe you have to be willing to be misunderstood if you're going to innovate.” – Said Founder of Amazon Jeff Bezos
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
(CONSUMER BEHAVIOUR AMID RECESSIONS: WHERE DOES THE MONEY GO?)
August 14, 2024
Hello everyone.
Which would you most likely give up if a recession descended upon us?
- Netflix
- Fast food including Chipotle, McDonalds, Burger King, Taco Bell, In-N-Out Burger, Baskin-Robbins, etc
- Your favourite coffee fix
- None of the above
If it was me, and I had to choose one, apart from d) it would be fast food. But then, that would be easy for me, because I don’t eat it in the first place. So, I’m cheating a little in that sense. So, my second pick would be my coffee fix. Again, easy, as I am a tea drinker and prefer to make a pot of tea in the morning or (grab a teabag if I’m in a hurry).
If we are not going to eat out, and are not getting our coffee fixes, then where would our discretionary dollars be going?
Many will find comfort in media options. And Netflix comes to mind here.
How many people have not spent a lazy day binge-watching their favourite series or rewatching old movies?
Netflix may turn out to be a stalwart stock against a backdrop of recessionary dark clouds building up on the horizon. Analysts at J.P. Morgan believe the service provides good value, even with their latest price increases. Capex is expected to come in around $ 17 billion this year, and JPM has an overweight rating on the stock. Their price target of $750 indicates around 18.5% upside potential from Monday’s close. From the beginning of this year, the stock is almost 32% higher.
Following its second-quarter earnings announcement on July 18, Netflix shares are trading only around 2% lower, compared with the S&P 500 which is down around 4% over the same period. Of note, in the second quarter, Netflix reported a 34% yearly increase in its ad-supported memberships, and total memberships topped analysts’ forecasts. JPM analysts regard subscription services like NFLX and SPOT as “being more resilient during periods of macro pressure.”
Netflix is positioned well as it targets 500M+ global (connected TV) households.
Spotify has also been a strong performer this year, with shares up 80% year to date.
Netflix (NFLX) Daily chart
I recommended Netflix (NFLX) on January 17, 2024, when it was $480.
Spotify (SPOT) Daily chart
I recommended Spotify (SPOT) on January 7, 2024, when it was $193.52
I am not suggesting you buy at this time or add weight.
SOMETHING TO THINK ABOUT…
In a recent talk the Private Wealth Group of Wells Fargo Advisors offered comments on investing. Here are a few takeaways.
“What we can learn from history is that people don’t learn from history.”
“All this creates a lot of short-term thinking in the markets. They become focused on what is in the news, and money drives toward these companies and industries, it’s during this time that investment principles are forgotten.”
Their thoughts on the media are interesting. (In the 1980’s, I don’t recall any financial media channels. CNBC was founded on April 17, 1989, two years after the 1987 crash. It was originally the Consumer News and Business Channel, a joint venture between NBC and Cablevision).
Getting back to their ideas…
Tuning out the headlines to stay focused on the long term.
“People get caught up in what’s going on in the news and what the media is talking about. A lot of people are working from home. They have got the TV on. If you watch any of the financial news networks, there’s not that much news every day. They just keep talking about the same thing over and over and over again. And people hear that, and they stick with it and then it becomes real to them, and all their investing principles and history is gone by the wayside.”
QI CORNER
Cheers
Jacquie
Global Market Comments
August 14, 2024
Fiat Lux
Featured Trade:
(A REFRESHER COURSE AT SHORT SELLING SCHOOL),
(SH), (SDS), (PSQ), (DOG), (RWM), (SPXU), (AAPL), (TSLA),
(VIX), (VXX), (IPO), (MTUM), (SPHB), (HDGE)
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Mad Hedge Biotech and Healthcare Letter
August 13, 2024
Fiat Lux
Featured Trade:
(THE RISE OF THE STEADY EDDIES)
(CNC), (UNH), (PFE), (JNJ), (ABBV), (LLY), (BIO), (UHS), (WAT), (AMGN), (REGN), (VRTX), (CRSP), (MRNA)
