Marks argues investors must not assume likely outcomes will occur, unlike in physical sciences where determinism applies.
“you should not act as if the things that should happen are the things that will happen. Again, in the world of the physical sciences, you can probably bet that that's true.”
“Even when it's over, you can't tell. Was that a safe investment that it was sure to produce a double? Or was it a risky investment where you got lucky?”
Marks says even when he thinks he is right on market calls he assumes probability is only eighty-twenty.
“But, you know, in the investment business, even when you're even when you think you're right, you shouldn't assume that it's more than $80.20.”
Marks argues the future is a probability distribution of possibilities, not a single predictable outcome.
“It's a probability distribution. It's a range of possibilities in each thing, whether it's GDP growth next year or inflation next year, or who's going to win the next election,”
Marks cites Dimson saying the future is a probability distribution, not a single outcome that can be predicted.
“The future is not a set single thing that if you're smart enough, you can figure it out what it's going to be and it's going to materialize and make you right.”
Marks warns that anyone claiming to know AI's future doesn't understand the situation, comparing it to the first inning.
“if you think you know what's gonna happen, you don't know understand what's going on. We're at the we're in the first inning”
Marks argues anyone claiming to know AI's trajectory doesn't understand the situation; we're in the first inning.
“I would say if you think you know what's gonna happen, you don't know understand what's going on. We're at the we're in the first inning of a very long unpredictable game.”
Marks says if you think you know what will happen with AI, you don't understand what's going on.
“I would say if you think you know what's gonna happen, you don't know understand what's going on.”
Marks says we're in the first inning of a very long unpredictable AI game with unknown rules.
“We're at the we're in the first inning of a very long unpredictable game. We don't know what the rules are or or have any idea how many innings there are in the game.”
Marks questions whether AI models trained on same history can produce different investment outcomes.
“Are some AI models smarter than others? Since they all have super IQs, computing power, and they all are trained on the same history, are some smarter than others?”
Marks states nobody can specify what AI will do, when, for whom, or how much profit it will produce.
“I've never heard anybody tell me exactly what AI will be able to do or when or for whom or how much profit it'll produce and for whom.”
Marks calls AI the hardest thing he has ever seen in investing due to enormous uncertainty.
“This is the hardest thing I think I've ever seen in the investment world because of this enormous degree of uncertainty.”