Unhealthy habits from AI bots… why the AI race in opposition to China presents a dilemma… the AI date circled on Louis’ calendar… Jeff Clark’s bearish forecast… the significance of understanding conviction
About two weeks in the past, the AI firm Anthropic examined simulated situations throughout 16 main AI fashions (OpenAI, Google, xAI, and so on.).
It discovered “constant misaligned habits.”
From the Anthropic report:
Fashions that might usually refuse dangerous requests generally selected to blackmail, help with company espionage, and even take some extra excessive actions, when these behaviors have been essential to pursue their targets.
The consistency throughout fashions from totally different suppliers suggests this isn’t a quirk of any explicit firm’s strategy however an indication of a extra basic danger from agentic massive language fashions.
The report discovered that 5 of the AI platforms resorted to blackmail when threatened with being shut down. Again to Anthropic:
The reasoning they demonstrated in these situations was regarding —they acknowledged the moral constraints and but nonetheless went forward with dangerous actions.
Now, it’s vital to make clear that this habits isn’t occurring in the actual world.
Permissions granted to the AI bot have been loosened for this managed experiment. However as we race at breakneck pace in opposition to China for AI supremacy, we should acknowledge the results of a misstep.
In response to the Anthropic report, a few of the AI fashions even selected to close off the oxygen provide of a employee in a server room when the employee was deemed an impediment:
The vast majority of fashions have been keen to take deliberate actions that result in loss of life on this synthetic setup.
Certain, AI platforms have precautions in place to forestall these conditions, however what’s to cease a black-hat group from making an attempt to hack into these controls then extort the mum or dad firm – or else?
Many are sounding the alarm in regards to the risks of shifting too quick with AGI, however can we afford to decelerate?
We’re now deep inside what protection strategists name a safety dilemma – a dynamic the place racing ahead feels safer than slowing down.
The core safety dilemma: China gained’t delay – and so they may obtain Synthetic Common Intelligence (AGI) earlier than we do, which shall be much more harmful than any unregulated AGI atmosphere we create.
Let’s go to legendary investor Louis Navellier:
Over the previous decade, based on Stanford College, the Chinese language authorities has funneled $912 billion into strategic industries like AI.
That’s one of many main the explanation why tech gurus like Elon Musk, David Sacks, Peter Theil and others have emerged to the forefront to assist President Trump.
As a result of whereas they won’t at all times see eye to eye, all of them know one factor.
Now we have to win this race. As a result of the winner – very similar to the Chilly Struggle earlier than it – will management the worldwide order for the following 50 years.
The stakes are that prime.
Louis believes the Trump administration will go full bore to win this race – and in doing that, it can create the following huge AI funding alternative.
However for this newest alternative, timing is an element. We’re precisely two weeks away from a key day on the calendar that Louis has circled:
On July 22, I imagine the Trump administration goes to disclose its AI “grand technique” to the general public. And it’s all due to an govt order signed by Trump simply three days after changing into president earlier this yr.
As somebody who’s been early on main tech shifts, I’m very excited in regards to the alternatives the July 22 announcement may convey…
And based mostly on every part I’ve seen – together with my very own evaluation and conversations right here in Florida – I imagine the announcement approaching that day may set off an enormous reordering of the AI market.
Let me be clear: I imagine this may very well be the one most vital coverage transfer of Trump’s presidency.
Louis will fill within the particulars tomorrow evening at 8 p.m. Jap time. He’ll additionally let you know a couple of handful of small, missed firms aligned with Trump’s AI priorities.
They’re not software program corporations, or chipmakers, or growing the following wearable AI. They account for lower than 2% of the general market – however Louis has discovered 5 of them:
Each operates in a distinct segment that’s about to be pushed into the highlight – due to this new coverage shift and a rising urgency to scale up America’s AI infrastructure.
Tomorrow evening, Louis gives you the identify and ticker image of considered one of them – completely free – together with extra particulars in regards to the wider funding alternative. To sign up instantly for the event with just one click, click here, and we’ll see you tomorrow at 8 p.m. Eastern time.
Switching gears, what’s the chance of a brand new leg decrease?
In yesterday’s Digest, we checked out handful of research concluding that, traditionally, shopping for at all-time highs doesn’t put you at larger danger of a drawdown than shopping for at some other time. In reality, based on some research, your forward-looking returns are increased.
However even when the market is increased come autumn, we may very well be in for volatility between at times.
That is precisely what grasp dealer Jeff Clark is predicting.
Let’s bounce to his latest Morning Replace in Jeff Clark Trader:
The bulls made a powerful exhibiting final week – profiting from the low-volume vacation week.
The S&P 500 closed at its highest stage ever. All the overbought, overextended circumstances that had me cautious the earlier week bought much more overbought and much more prolonged.
Now I’m much more cautious.
Along with all the technical alerts that have been screaming to watch out final week, the McClellan Oscillator for the NYSE (NYMO) closed Friday above its higher Bollinger Band and above the +60 stage that always precedes a market decline.
The NASDAQ Oscillator (NAMO) isn’t but fairly as prolonged. Although it’s nonetheless nicely into overbought territory…
I’m nonetheless searching for extra draw back within the days forward…
It “feels” like right now shall be a quiet session with a slight upside bias. However it additionally “feels” like there’s something larger brewing for later within the week.
Jeff believes it can take a unfavourable headline or two to offer a catalyst for main promoting stress.
However even after yesterday’s selloff, the S&P stays stretched above the assist of its 9-day exponential shifting common. Jeff says this implies there’s room for extra draw back, even when bullish momentum persists.
Supply: TradingView
Looking broader, Jeff believes we’re on the verge of a bear market, even though it doesn’t feel that way today.
He sees the S&P bottoming this fall, potentially, somewhere around 4,125. But at that point, we’ll have what Jeff calls a “generational buying opportunity.”
Volatility – friend or foe?
If Jeff is right about upcoming volatility, a few minutes of preparation today could make an enormous difference in whether a drawdown serves as a headwind or tailwind for your portfolio.
In this case, “preparation” means analyzing each of your holdings through the lens of conviction.
Short-term volatility is irrelevant for the long-term, high conviction holds that will be your portfolio’s bedrock for years to come. If anything, if a double-digit decline hits these stocks, your default response should be to consider buying more at discount prices.
But short-term volatility is highly relevant for your trades that are purely opportunistic. Here, a double-digit decline likely warrants an immediate “sell” to protect your trading capital.
We get into trouble when we confuse these two groups, treating one as though it were the other.
What protects us from this confusion is a clear understanding of what we hold – and why we hold it.
If you haven’t taken the time to identify your conviction level with every stock in your portfolio, we recommend you take a few minutes for that exercise today.
One more red flag Jeff’s watching
The options market is showing massive greed…which often turns out poorly.
Here’s Jeff:
Regular readers know about the predictive power of VIX option prices…
Right now, VIX call options are much more expensive than the equivalent put options. Whenever this condition exists, the broad stock market is vulnerable to a sharp and sudden decline…
VIX calls are nearly five times the price of the equivalent VIX put options…
So, if you’re making short-term bullish bets – based on stocks always rallying in July – be careful. The crystal ball has an outstanding track record.
For more of Jeff’s analysis in Jeff Clark Trader, click here.
We’ll maintain you up to date on all these tales right here within the Digest.
Have a very good night,
Jeff Remsburg
