ChatGPT seconds Warren Buffett's and Michael Burry's tips on what it takes to be a good investor - the bot lists patience and discipline among 6 must-have traits
Yuichiro Chino
- Insider's Zahra Tayeb asked ChatGPT what traits make for a good stock investor.
- The buzzy AI bot chucked out 6 virtues that lead to investor success, including patience and discipline.
- Its advice mirrored that of top investors like Warren Buffett, but failed to identify other key traits vital to investor success.
ChatGPT, the new buzzy chatbot developed by artificial intelligence company OpenAI, is the world's latest obsession for its human-like responses.
The bot, which bagged a $10 billion investment from Microsoft, has shown a capacity for a range of tasks such as writing stock stories, layoff emails, and even dating-app messages. The craze around it has even boosted investor appetite for AI stocks, sending shares in names like Nvidia and Ambarella soaring.
Earlier this week, I put the human mimic-like tool to the test to see what all the fuss was about. I enjoyed its conversational tone and was grabbed by the ease at which it churned out content, but its lack of empathy or decision-making skills ultimately made it easy for me to remember it's just a robot.
As a frequent writer on the US equities market, I sought out to ask the AI tool what character traits make for a good stock investor. Here's what it chucked at me.
ChatGPT's 6-part tip on traits that make for a successful stock investor
- Patience: Investing in the stock market often requires a long-term perspective and the ability to withstand short-term volatility.
- Discipline: Developing and sticking to a well-thought-out investment strategy can help investors avoid impulsive decisions based on emotions.
- Objectivity: Being able to separate personal opinions and emotions from investment decisions can lead to more rational and informed investment choices.
- Perseverance: Investing in the stock market can be a challenging and sometimes frustrating experience, but having the determination to stay the course and stick to a strategy can lead to long-term success.
- Open-mindedness: Keeping an open mind to new information and being willing to adjust your investment strategy in light of new developments can help you stay ahead of the curve.
- Attention to detail: Careful research and attention to detail can help investors identify the best investment opportunities and avoid costly mistakes.
ChatGPT then cautioned none of its advice can guarantee success. "Having these traits does not guarantee success in the stock market, but they can help investors make better decisions and navigate the ups and downs of the market more effectively," it said.
The bot's tips impressed me, given it mirrored the advice of top investors like Warren Buffet and "Big Short" fund manager Michael Burry. Like ChatGPT, Buffett says self-discipline and keeping emotions in check is key for investors.
The Berkshire Hathaway CEO – often considered a role model in the investing world – has also showcased the virtues highlighted by ChatGPT, according to the "Richer, Wiser, Happier" author William Green. Green noted that Buffett's phenomenal success was steeped in qualities like patience and having an open mind.
He gave the example of Buffett, who for decades brushed off technology as outside of his circle of competence, then injected $36 billion into Apple between 2016 and 2018. Its stake has blown up in value to about $134 billion today.
Meanwhile, Gabriel Colominas, a buy-side equity analyst at Gesiuris Asset Management and a Burry expert, has said the investor showcased virtues like perseverance through his ability to withstand pressure and possess the deep conviction needed to stay the course.
He used the example of Burry's iconic bet against the mid-2000s housing bubble, which was mocked by Wall Street, only for the legendary investor to be proven right.
However, chatGPT didn't have all the answers. For instance, the bot failed to identify other key traits underpinning Buffett's success like dedication, humility and simplicity.
David Shayer, CEO of Vantage Markets UK, told Insider that while ChatGPT picks up on specific personality traits of successful investors, it misses others.
"I think there are some characteristics missing here, which ChatGPT, or perhaps AI in general, doesn't yet understand fully when it comes to the human psyche," Shayer said.
"ChatGPT has missed the more daring side of a good stock trader's personality, or attitude to risk. They have to be willing to be speculative and have a certain amount of intuition on where markets might go. However, similar to ChatGPT's discipline, they also tend to be highly independent individuals. There's a lot to learn in trading and it can get complicated, so they have to be proactive in learning," he added.