Tremendous

An angel investor's take on life and business

  • Shorts Are Covering Even Faster than Jan ’21

    Short sellers are running for the exits as markets rally. Short covering has hit its highest level in over 7 years, according to a Financial Times report:

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    Equity markets have risen sharply so far this year, led by many of the speculative stocks that were clobbered hardest during 2022’s global sell-off. Many of the funds that profited from the rout have found themselves poorly positioned for the rebound, which has recently accelerated as investors sensed that interest rates were close to peaking in many major economies.

    The resulting flurry of short covering — when investors buy back stocks they had been betting against to limit their losses — was the largest since November 2015, according to a Goldman Sachs note to clients seen by the Financial Times.

    Short sellers tend to pile into the same, heavily shorted stocks. When they rush to close their positions, this can cause a short squeeze.

    A short squeeze happens when many short sellers all try to buy at once to close their positions. This can cause a stock’s price to skyrocket.

    Short squeezes in stocks like AMC Entertainment Holdings and GameStop in 2021 took down hedge funds including Melvin Capital. Today, those same stocks are some of the year’s best performers.

    Despite big increases in heavily shorted stocks, short sellers still have massive exposure. AMC’s short interest has dipped only slightly, remaining at a lofty 29%.

    This indicates such stocks could have a lot of room to run. Short sellers will have to buy many more shares to close out their positions.

    Shorts are also facing some of the heaviest retail buying in history. Retail buying hit an all-time high of 23% of all stock buys, according to a recent Forbes report.

    Retail investors are the biggest buyers of many heavily shorted stocks, including AMC and GameStop.

    Over a month ago, I predicted a market rally in 2023. I guess the hedge funds missed that post. 🙂

    If the Fed remains dovish, I expect many more losses for short sellers. 2023’s short squeezes could make 2021 look almost quaint.

    What do you think the future holds for short sellers? Leave a comment at the bottom and let me know!

    More on markets:

    As Fed Rates Peak, Are Markets Ready to Take Off?

    Major Hedge Fund Down 54% — Survival in Doubt

    SEC Refuses to Address Massive Fraud in Markets

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    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: Melvin Capital founder Gabriel Plotkin

  • SEC Demands Citadel Employee Cell Phone Records

    The Securities and Exchange Commission has ordered Citadel and several other financial firms to produce employee cell phone records.

    From a new report in Bloomberg:

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    The Securities and Exchange Commission recently asked Steve Cohen’s Point72 Asset Management, Ken Griffin’s Citadel and several other firms to search through the devices for evidence of business dealings on unapproved channels, according to people familiar with the matter who asked not to be identified discussing the private requests. The SEC is also probing the practices of brokerages, money managers and private equity firms. 

    Representatives for Point72 and Citadel declined to comment. Neither firm has been accused of wrongdoing.

    By law, investment firms must retain all business communications. But sometimes, Wall Street traders would rather no one hears their conversation.

    So, many turn to encrypted messaging apps like WhatsApp and Signal. Using their personal phones, traders can evade the scrutiny of their employer, as well as regulators.

    What might be in those WhatsApp messages? Time will tell, but violations could include front-running clients’ trades or naked short selling.

    The Financial Industry Regulatory Authority (Finra) has fined Citadel for front running clients in the past. Citadel has also received subpoenas in a probe of short sellers.

    The SEC has already levied over $1 billion in fines on banks for failing to maintain records. But unless those fines get a lot bigger, nothing will change.

    Citadel made $16 billion in profit last year. Any fine in the millions will be nothing more than a speeding ticket.

    I urge the SEC to find out what is being hidden in these messages. And when they do, the penalty should sting, big time.

    What do you think the SEC will find? Leave a comment and let me know!

    Have a great weekend everyone!

    More on markets:

    Citadel’s Illegal Trades — The Tip of the Iceberg?

    Major Hedge Fund Down 54% — Survival in Doubt

    SEC Refuses to Address Massive Fraud in Markets

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    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: Citadel CEO Ken Griffin

  • How I Source Deals (Part 2)

    We investors have no function except to find and help the next Google. But, uh, where is it?

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    Finding the great companies of the future is a huge part of our job. I look at 150-250 companies every month.

    I choose one.

    Since I wrote about sourcing deals last fall, my approach has changed a lot. Here’s how I’m finding great startups now:

    1) Pitch events. There’s nothing like being in person, right?

    Wrong. The best pitch events I attend are usually virtual.

    Founders from anywhere on earth can attend. My latest investment is in an incredible company based in the UK.

    I never would’ve met that founder at a New York pitch event.

    My favorites are Remote Demo Day and LAUNCH Accelerator Demo Day, both put on by Jason Calacanis’ venture firm. Stonks also has some great events.

    For in person tech events in NY and SF, check out Gary’s Guide.

    2) Portfolio company founders.

    For me, this is the highest signal intro I can get. Any meeting with a founder recommended by someone I’ve already invested in goes to the top of my list.

    This also is a great strategy for founders to approach investors. Find some founders they’ve already invested in and ask for an intro.

    You may already know some of their portco CEO’s!

    3) Venture firms. Great deals are currency.

    Whenever there’s space in the round, I send out deals I’m doing to a number of venture firms in my network. This helps the startup and the VC’s if they find a great deal.

    In return, they introduce me to some founders they’re investing in. These entrepreneurs are pre-vetted by smart investors, making my job way easier!

    4) Seedscout. Seedscout is a really cool new platform that lets founders request intros to investors.

    This is especially useful for founders who aren’t in Silicon Valley or New York.

    I made an investment in an incredible Utah SaaS company I met on Seedscout. I never would’ve met them otherwise.

    I like the platform so much I actually invested in Seedscout itself!

    Seedscout is free for investors. Check it out!

    5) Syndicates. As I approach the two year mark as an angel, I’m doing fewer and fewer syndicate deals.

    Four out of my last 5 new investments have been direct. Over time, I’ve built a network that helps me find great deals on my own.

    That has two huge advantages.

    You’re not at the mercy of whatever a syndicate lead decides to send you. And you don’t have to pay anyone 20% of your gains!

    But for a new angel without a great network, syndicates are an absolute must.

    The best one is Jason’s, here. Flight VC, an arm of Gaingels, also has some great deals.

    I am still happy to do syndicate deals if that’s the best deal available. 80% of something beats 100% of nothing any day!

    How do you source deals? Leave a comment and let me know!

    More on tech:

    HOW I SOURCE DEALS

    I LIKE BIG TAM’S AND I CANNOT LIE!

    GOOGLE IS LOSING THE AI RACE

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    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: Google founders Larry Page and Sergey Brin. “File:Google page brin.jpg” by Ehud Kenan is licensed under CC BY 2.0.

  • I Like Big TAM’s and I Cannot Lie!

    I just passed on a company growing 80% month over month. Instead, I chose one growing more slowly. Have I lost my mind?

    Not yet.

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    These two companies illustrate one of the most important principles in venture capital: market size matters. Without a large enough Total Addressable Market (TAM), a startup can only grow so big.

    Company A

    Company A is a fantastic consumer subscription company. It has an awesome product and growth rates you rarely see anywhere.

    So they’re scaling like crazy — but for how long? To answer that question, I did a little back of the envelope math.

    They have about 25 million potential customers, according to my research. At their average revenue per user of $10/mo, that’s $3 billion a year in potential revenue.

    And unfortunately, like many consumer companies, churn is heavy. So the company has to be rebuilt every year or two.

    Company B

    Company B handles international corporate money flows. And while A has a substantial market, the potential for B is staggering.

    Corporations move $23.5 trillion across borders every year. At B’s take rate, that alone is a $60 billion a year revenue opportunity.

    Better yet, B also charges SaaS fees! That expands the TAM to around $70 billion.

    If B takes even a small slice of the market, it could exceed $1 billion in revenue. At a typical 10x multiple, that means a $10 billion company.

    And just because B isn’t growing as fast as A doesn’t mean it’s not growing! Revenues jumped 10x year over year, an amazing performance.

    Why We Hunt Elephants

    VC’s and angels are obsessed with big markets because the largest outcomes matter most. In venture capital, they drive almost all of our returns.

    Let’s look at 3 examples: a company that’s acquired for $100 million, a startup that IPO’s for $1 billion, and another that IPO’s for $10 billion.

    Assuming 50% dilution from the time we invest until exit, here’s what our returns look like:

    That $100 million outcome, as big as it sounds, accounts for less than 1% of our returns! Meanwhile, the $10 billion Big Kahuna makes up fully 90% of all our gains.

    If one type of company gives you 90% of your gains, that’s where you have to focus.

    Expanding Your TAM

    Let’s say your market is small. But you love your business and you don’t want to shut it down!

    Think about how you can sell your product to more customers! Can a product that’s useful for auto garages also work for cleaning services?

    There’s nothing wrong with focusing on a small market in the beginning. You have to start somewhere.

    But if you want to build a venture scale business, you also have to think big!

    Best of luck to all startups, big and small!

    How do you think about market size? Leave a comment at the bottom and let me know!

    More on tech:

    Google is Losing the AI Race

    GPT-Powered Search with Perplexity AI

    Me vs. ChatGPT: Who’s a Better Blogger?

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    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    Use this link to sign up and you’ll save $15 on your first order. 

  • SEC Refuses to Address Massive Fraud in Markets

    The Securities and Exchange Commission (SEC) just released its top enforcement priorities for the year. Rather than dig into systemic fraud in our markets, they’ll be regulating….confetti?

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    According to a report out this morning on Reuters, the SEC will be focusing on:

    ”…behavioral prompts, differential marketing, game-like features…and other design elements or features designed to engage with retail investors on digital platforms.”

    In plain English, they’re talking about the confetti some stock trading apps display when you make a trade. But that’s not all.

    The SEC will also be regulating how funds can use certain words:

    …funds with keywords such as “green,” “sustainable,” “ethical,” or “socially responsible” in their names will have to reflect an emphasis on these areas through their investing choices.

    As if investors couldn’t simply look at the holdings and see if Exxon Mobil is there or not!

    Combatting widespread financial fraud is nowhere in the SEC’s agenda.

    Illegal naked short selling pervades our markets. Millions upon millions of trades fail to clear each day, especially in heavily shorted stocks like AMC Entertainment Holdings and GameStop.

    But the SEC won’t be looking into that.

    Despite $8 billion in losses on FTX, cryptocurrency regulation won’t be a focus for the SEC this year either. Why bother with that when the SEC could be requiring “a summary of registrants’ human capital resources,” whatever that is?

    It’s no wonder author Jesse Eisinger called the feds “the chickensh*t club.”

    The SEC is a toothless regulator. It busies itself with make-work, avoiding the real issues plaguing our markets.

    Gary Gensler and the SEC need to start going after the real criminals.

    What do you think of SEC enforcement? Leave a comment at the bottom and let me know!

    More on markets:

    Major Hedge Fund Down 54% — Survival in Doubt

    Short Sellers Down $81 Billion in 2023

    Citadel’s Illegal Trades — The Tip of the Iceberg?

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    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: “CMI 101: Demystifying Derivatives with CFTC Chairman Gary Gensler” by Third Way is licensed under CC BY-NC-ND 2.0.

  • Short Sellers Down $81 Billion in 2023

    Well, that was fast! With 2023 less than a month old, short sellers have already lost $81 billion.

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    Many are running for the exits. From a new report from The Wall Street Journal:

    Short sellers who have incurred hefty losses are actively trimming their positions, said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners. Investors betting against stocks have racked up $81 billion of mark-to-market losses on short positions this month through Thursday after accumulating $300 billion in gains in 2022, Mr. Dusaniwsky said.

    Markets have rallied this year, with meme stocks leading the way. As short sellers race to close their positions, their losses are likely to grow:

    Signs that inflation is cooling have stoked bets among investors that the Federal Reserve will pivot from raising interest rates to cutting them as soon as the second half of the year. That has helped risky assets across the board rise. Especially risky corners of the market, such as stocks with high short interest, have rallied even more. Analysts say that has likely forced short sellers to close out bearish positions to cut their losses—resulting in what is known on Wall Street as a short squeeze. 

    Some of the most heavily shorted stocks have been among the best performers so far this year.

    Meme stocks like AMC Entertainment Holdings, GameStop, and Bed Bath & Beyond are all up over 20%. The broader S&P 500 is up 6% for the year so far.

    In addition to huge market losses, short sellers are also paying stratospheric interest rates to borrow shares. Rates to borrow AMC shares have ranged between 20% and over 100% per year in recent weeks.

    It’s no wonder that some short sellers may be resorting to illegal tactics. There is evidence of widespread naked short selling in some heavily shorted stocks.

    Common and preferred shares of AMC have seen millions of fails to deliver. These failed trades often occur when a short seller sells stock without borrowing it.

    This is called naked short selling and it’s illegal under federal law. It’s also a powerful way to push down a stock’s price without paying any interest.

    The coming months could push many short sellers to the brink.

    A race to close out positions may cause heavily shorted stocks to rally further. Meanwhile, a more dovish Fed could cause a general market rally, adding to their losses.

    Short sellers should avoid meme stocks like the plague. A heavily shorted stock with a passionate fan base is simply too hot to handle.

    What do you think is next for short sellers? Leave a comment at the bottom and let me know!

    More on markets:

    Major Hedge Fund Down 54% — Survival in Doubt

    Citadel’s Illegal Trades — The Tip of the Iceberg?

    As Fed Rates Peak, Are Markets Ready to Take Off?

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    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: AMC CEO Adam Aron

  • Citadel’s Illegal Trades — The Tip of the Iceberg?

    South Korea has fined Citadel Securities for illegal stock trades made with high frequency algorithms. From a report out last night in Reuters:

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    South Korea’s financial regulator has imposed a fine of 11.88 billion won ($9.66 million) on U.S.-based Citadel Securities, saying it disturbed the local stock market with high-frequency algorithm trading.

    The Financial Services Commission (FSC) said in a statement released on Thursday the firm had distorted stock prices with artificial factors, such as orders on the condition of “immediate or cancel” and by filling gaps in bid prices.

    These illegal trades were no isolated incident. Regulators found improper trades in thousands of stocks over a period of nearly a year:

    The firm carried out such trading on an average of 1,422 stocks per day from Oct. 2017 to May 2018, totalling more than 500 billion won worth of trades, according to the statement.

    Citadel’s illegal trades stand out as some of the most egregious ever in South Korea:

    The Commission said it was the first time it had imposed fines on such high-frequency trading on the South Korean stock market, which has a high proportion of retail investors and little competition among algorithmic traders.


    Citadel used strategies such as flash orders to gain an illegal advantage over other traders. This practice involves offering to buy or sell and then retracting the order in a fraction of a second.

    Flash orders let you see the prices at which other traders are willing to buy or sell. This gives you an illegal edge over your competition.

    In Korea, Citadel used these strategies to take advantage of mom and pop retail traders, which I find particularly heinous.

    Citadel’s algos don’t stop in Korea.

    The firm was recently fined by the US Financial Industry Regulatory Authority (FINRA) for frontrunning its customers. By placing trades ahead of customers, Citadel made money for its own account.

    Breaking the law appears to be quite lucrative for Citadel.

    Citadel Securities posted record revenues of $7.5 billion last year. Citadel’s hedge fund made even more, approximately $28 billion.

    I think Citadel is using these illegal flash orders all over the world. They may also be using other illicit tactics we don’t know about yet.

    After all, if you go to the trouble to create a program that can make you money, why not use it in as many places as possible?

    The reality is that these speeding tickets will never stop Citadel. Fines in the millions are a cost of doing business for a multi-billion dollar operation.

    Securities regulators worldwide should find out what exactly Citadel is doing in their markets. If they find more wrongdoing, they should simply ban the firm from trading for a period of years.

    Nothing but a severe penalty will stop them.

    Who says crime doesn’t pay?

    What do you think is the future for Citadel? Leave a comment at the bottom and let me know!

    More on markets:

    Major Hedge Fund Down 54% — Survival in Doubt

    Tiger Global Losing $185 Million a Day

    As Fed Rates Peak, Are Markets Ready to Take Off?

    Get the blog before anyone else…subscribe!

    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: Citadel CEO Ken Griffin

  • Major Hedge Fund Down 54% — Survival in Doubt

    In a brutal year for hedge funds, few have suffered more than Light Street Capital. The fund lost 54% in 2022, over $1 billion.

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    From a report out last night in Bloomberg:

    Light Street Capital Management’s hedge fund tumbled 54% in 2022, according to a person familiar with the matter, one of the industry’s worst performances last year. 

    That drop rivals the 56% decline for Tiger Global Management, and is steeper than Lone Pine Capital’s 36% loss and Whale Rock Capital Management’s 45% slide.  

    Light Street was the classic crossover hedge fund. It made big bets on technology companies, both public and private.

    Many of those bets were at eyewatering valuations. Tech was crushed in 2022, pushing many such funds to the brink.

    What strikes me is how simple Light Street’s strategy was. Its biggest holdings were a who’s who of growth stocks:

    Anyone could’ve bought Tesla and hoped for the best. Why should investors pay Light Street 2% of assets and 20% of gains to do what they could do themselves?

    Light Street’s 54% loss is abysmal even compared to benchmarks. The S&P 500 lost 18% last year, while the NASDAQ lost 33%.

    Investors could’ve bought index funds and avoided hundreds of millions in losses, not to mention outrageous fees.

    No wonder the California Public Employees Retirement System (Calpers), one of the most astute investors in the market, hasn’t invested in hedge funds since 2014.

    The future for Light Street is bleak. It cannot charge a performance fee again until it more than doubles its fund.

    That’s extremely hard to do. And without those juicy performance fees, the best traders will leave.

    This is the kind of spiral that took down Melvin Capital. Light Street could be next.

    I’m a huge bull on technology. But no stock is a good buy at any price.

    What do you think the future holds for hedge funds? Leave a comment at the bottom and let me know!

    More on markets:

    Tiger Global Losing $185 Million a Day

    As Fed Rates Peak, Are Markets Ready to Take Off?

    Is SBF Laundering Money As We Speak?

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    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    Photo: Glen Kacher, Founder of Light Street Capital

  • Google is Losing the AI Race

    Today, Google is the king of search. But is it about to be dethroned?

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    The search giant seems to face a new competitor every day. ChatGPT launched on November 30, with Perplexity and Allsearch coming shortly thereafter.

    The “page of links” is starting to look antiquated.

    Meanwhile, with nearly 200,000 employees, Google has released nothing in response. But new reports indicate Google may finally release a competitor this spring:

    In addition to an ethical AI chatbot such as LaMDA, Google is now planning to reveal 20 more AI-based products at its I/O conference scheduled for May 2023. ChatGPT has sparked worry about the use and viability of conventional search engines, as the chatbot aims to provide answers to searches instead of just giving relevant links to users.

    Taking over 5 months to respond to a mortal threat to your business is unacceptable. Google should’ve worked day and night to produce a ChatGPT competitor within 90 days.

    So what’s the holdup?

    Google has shown wariness in revealing AI products and services, especially with the raging debate on the ethics of using AI, with the potential for bolstering biases present in training data. All current AI offerings by Google are heavily restricted in terms of what they can be used for.

    Large companies are obsessed with risk. Meanwhile, startups have to release something or they’re dead in the water.

    By the time Google does release a competitor, it may already be outdated. OpenAI’s GPT-4 may come out in the first half of this year.

    I don’t know what GPT-4 will be capable of. But seeing the massive improvement between GPT-3 and ChatGPT, I expect it to be very impressive.

    How fast you launch and iterate is especially important in AI because AI tools can improve at incredible speed. From a recent column by economist Tyler Cowen:

    ChatGPT, the model released late last year, received a grade of D on an undergraduate labor economics exam given by my colleague Bryan Caplan. Anthropic, a new LLM available in beta form and expected to be released this year, passed our graduate-level law and economics exam with nice, clear answers.

    If that wasn’t impressive enough, ChatGPT and another chatbot just passed the United States Medical Licensing Examination. I certainly couldn’t do that!

    Maybe Google will release a ChatGPT killer and blow us all away. But I expect to see it fall further and further behind, mired in complacency and risk aversion.

    What do you think the future holds for Google? Leave a comment at the bottom and let me know!

    More on tech:

    Me vs. ChatGPT: Who’s a Better Blogger?

    GPT-Powered Search with Perplexity AI

    They Passed on Apple, Google and Facebook…Here’s Why

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    If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog! 

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • GPT-Powered Search with Perplexity AI

    For all its powers, ChatGPT has a fatal flaw: its training data only goes through 2021. Ask about anything recent, and it’s stumped.

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    But a new tool lets you use the power of AI to find up-to-the-minute information. It’s called Perplexity AI, and it might be the best search engine ever.

    Just a month old, Perplexity AI looks like a traditional search engine. But it uses AI to answer your question, instead of just providing links.

    Its answers are pithier than ChatGPT’s — usually about a paragraph. And unlike ChatGPT, Perplexity cites its sources.

    This helps us confirm the results are accurate. The lack of sources is a serious problem on ChatGPT, since it occasionally produces incorrect answers.

    Let’s give this baby a test drive!

    So Perplexity, how’s the market doing so far this year?

    The answer isn’t perfect — it’s leaving off today’s return. But it’s accurate enough to be useful.

    Meanwhile, ChatGPT is stumped:

    Google doesn’t even seem to understand the question. It returns today’s performance only:

    Let’s try something a little less time sensitive: what are the best selling albums ever?

    Perplexity nails it, giving us a complete answer with excellent citations.

    ChatGPT’s answer is restricted to US sales. It’s a decent response, but not as complete an answer as Perplexity’s.

    In all, Perplexity seems better at answering questions than ChatGPT. But if you want to generate content, like a blog post or a screenplay, ChatGPT is the right choice.

    Where does this leave search giant Google?

    Microsoft plans to integrate ChatGPT into its search engine, Bing. Perplexity has already produced something similar, and there will surely be many more.

    Meanwhile, nearly two months after ChatGPT’s release, Google has shipped….nothing.

    If Google continues to stand still, its competitors will pass it by. And if people lose the habit of Googling, they won’t be back.

    I remember the first time I used Google. It was so clearly better than other search engines.

    Perplexity feels that way now. The results trounce Google, giving me a direct answer to my questions instead of a page of links.

    Search meaning “a page of links” is dead. The question is, will Google die along with it?

    What do you think of AI search? Leave a comment at the bottom and let me know!

    I’m off tomorrow, so there will be no blog. See you on Wednesday!

    More on tech:

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    Me vs. ChatGPT: Who’s a Better Blogger?

    VC Funding Down 67% in December

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