The 'HALO' Ai immunity trade

[dobig]

Have seen this thrown around the past week and just now on CNBC and it makes some sense. Premise being “heavy assets, low obsolescence” or 'HALO' stocks will be most immune to the Ai trade and where money is moving from software. Stocks such as McDonald's, Coke, Deere, Southern Copper, Energy stocks, travel and airlines, utilities, materials, etc,. will be the stocks and sectors that will be the least affected by Ai going forward. I have no idea how this Ai story will play out but if it's really as big as some suggest I can buy into this premise.

I won't be making any near term moves based on this theory. Mostly because as a dividend investor this already sort of fell into my lap. But I will keep it in the back of my mind going forward. I'll also be on watch to see when everyone gives up on software and other Ai vulnerable sectors. Usually when everyone throws in the towel in mass hysteria is when the best opportunities present themselves and I don't believe we're anywhere close to that moment yet. When/if IGV drops 50 - 60% I'll start paying attention and perhaps start nibbling.

 

[Qs Laptop]

Have seen this thrown around the past week and just now on CNBC and it makes some sense. Premise being “heavy assets, low obsolescence” or 'HALO' stocks will be most immune to the Ai trade and where money is moving from software. Stocks such as McDonald's, Coke, Deere, Southern Copper, Energy stocks, travel and airlines, utilities, materials, etc,. will be the stocks and sectors that will be the least affected by Ai going forward. I have no idea how this Ai story will play out but if it's really as big as some suggest I can buy into this premise.

How about utility stocks that are involved in supplying energy to data centers? Like Constellation Energy, Vistra Corporation (I own this one), Talen Energy, etc.

Best of both worlds.

 

[dobig]

How about utility stocks that are involved in supplying energy to data centers? Like Constellation Energy, Vistra Corporation (I own this one), Talen Energy, etc.

Best of both worlds.

Makes sense to me. Luckily for me many of my dividend etfs like SCHD are heavy in energy.

 

[Spock]

Was surfing for HALO ETFs this morning... seems too early.
HALO seems to be just another take on the traditional inflation hedges... real assets (base metals/mining/commodities, real estate, etc), defensive stocks (utilities).... a lot of which start pointing to value which usually has higher dividends.

I read another take on HALO/AI-resistant is consumer staples... people are still going to buy toothpaste (tickers like Colgate), laundry soap, food, and so forth.

The ultimate black pill is where are people going to get $ for food and toothpaste with no jobs (only so many open plumber jobs).

 

[dobig]

Was surfing for HALO ETFs this morning... seems too early.
HALO seems to be just another take on the traditional inflation hedges... real assets (base metals/mining/commodities, real estate, etc), defensive stocks (utilities).... a lot of which start pointing to value which usually has higher dividends.

I read another take on HALO/AI-resistant is consumer staples... people are still going to buy toothpaste (tickers like Colgate), laundry soap, food, and so forth.

The ultimate black pill is where are people going to get $ for food and toothpaste with no jobs (only so many open plumber jobs).

I've been trying to quantify that. My wife works for a tech company and they believe Ai will reduce the need of 3 of every 8 jobs in their company. Say we're conservative and Ai only reduces 10% of the overall tech worforce. Currently there's around 12 - 16 million tech workers including support. That's 1.2 - 1.6 million workers who will be displaced with nowhere to go. Figure somewhere around 4 - 8 million displaced across other sectors and that kind of drag on higher paying jobs is going to do some serious damage. I really hope my numbers are way off base or this scenario is so far off into the future I'll be long gone.

 

[GrayHare]

I've shifted funds a bit from Growth to HALO this year in order to watch that area. If it looks good, I'll shift more over the course of the year.

 

[Spock]

..... or this scenario is so far off into the future I'll be long gone.

The speed of the change is what is the core of the problem.
The pro-AI people are saying "so what if jobs get impacted, the same thing happened with industrialization, farm-to-factory, etc". Those transitions took decades. While probably wildly optimistic, the CEO of Microsoft said something about this occurring over the next 24 months.

 

[joejetski]

How about utility stocks that are involved in supplying energy to data centers? Like Constellation Energy, Vistra Corporation (I own this one), Talen Energy, etc.

Best of both worlds.

I would just look at how AI related they are, as some are more than others and may take a hit if AI drops. Think UTG and maybe a few others. Then there are those that are straight power suppliers that will do well regardless, like DNP.

 

[Quattro73]

I think KO at 25 PE scares me more than MSFT at 25 PE.

I think.