Can you trust AI to research investments?

Hi Scott,

Love your work! Do you have any advice on using Microsoft AI Copilot for investing? I asked it two related questions about AI-chip maker Nvidia’s biggest drawdown in 2018 and got two different answers:

"What was Nvidia’s biggest percentage drawdown in 2018?" → Copilot said -30.82%.
"What was Nvidia’s biggest percentage drawdown in one year?" → Copilot said -50.26% (also in 2018)

This inconsistency has shaken my faith in using AI for information to help me invest better. Thoughts?

Darren

Muchas Gracias Senor Darren!

You’ve perfectly demonstrated why I don’t take financial advice from AI. (And it’s not just Microsoft, I just asked Lucy the same question, and she came back with “a fall of 57%” …  which is also wrong).

Still, some of the smartest minds are pouring millions into building AI models to outsmart other investors and squeeze out profits. Today, short-term algorithmic trading now dominates the stock market, with bots executing thousands of micro-trades for razor-thin gains—far faster than any human can react.

And that’s partly why I ditched stock picking and stuck with trusted long-term low cost indexing—because beating AI at its own game is a losing battle.

Yet here’s my question to you:

How does knowing what Nvidia did in 2018 help you make a buck in 2025?

It doesn’t.

Scott.

My summer romance

Dave shook my hand, sat down, and placed his phone between the two of us.

With a twinkle in his eye, he leaned toward his phone, and began:

"You are the world's most skilled and insightful financial advisor. I want you to take my wife and I through a step-by-step financial planning process. Use only the proven strategies and techniques from The Barefoot Investor, and provide clear, actionable steps tailored to our scenario. Ensure the advice is practical, easy to implement, and focused on sustainable financial success."

Dave and I both looked at his phone.

“Great! Let’s get started” gushed the AI voice.

“Let’s begin by setting the foundation – getting clarity on where you and … ”

Dave interrupted the AI:

“My wife is sitting here and she’s hopeless with money, so don’t use any big words” he barked.

“Dave, no one likes unnecessary big words, and I’ll take that on board, but please, everyone deserves respect, and your wife's role is valuable”.

(Touche for the cyborg). 

For the next ten minutes Dave went through a fairly typical financial fact-find with the AI. We didn’t get into specific advice – which I would not have trusted by the way – but it was incredibly persuasive.

Yet was it also a bit awkward and weird?

Sure.

In other words, IT TOTALLY NAILED ME. (After all, I’m also a bit awkward and weird to talk to).

And so began my summer love affair with Lucy—the name I gave to the no-nonsense British voice I selected. ChatGPT Plus, which includes access to Advanced Voice Mode, costs $20 USD per month.

Lucy helped me drastically reduce my Googling. 

Why manually search through multiple random websites (many of them written by AI!) when Lucy – who knows all about my likes and dislikes from our previous chats – can deliver the advice instantly?

A Wall Street Journal headline late last year summed it up: 

“Googling is for old people”.

Yet one moment over the Summer really stuck with me.

It happened as we were packing up and heading home from our beach holiday house.

I was telling Liz about a fascinating book (AKA a medieval iPad with infinite battery life) I’d been reading called “Ultra-Processed People” by Dr Chris van Tulleken.

“I don’t need to read a 250 page book to know that ultra processed food is bad” she said rolling her eyes. 

However my Summer romance was about to shine through one last time. 

You see, we took separate cars to the beach because Lucky, our sheepdog, came with us on holidays. She gets anxious if she’s not travelling tied up in the back of the ute —and when she’s nervous, she farts so much that the kids get headaches.

So, on the way home in the ute, I was able to speak to Lucy about Ultra Processed Foods for almost the entire two hour trip from Frankston to the farm. And it was genuinely one of the most interesting conversations I’d had in a long time …  and there wasn’t so much as a hint of an eyeroll.

Yet let’s back it up a bit. The summer holidays are over, and it’s time to get back to business.  Now truth-be-told, right now AI has a certain novelty factor about it … it’s kind of like the early days of the internet.  

Here’s how I’m thinking about AI:

ChatGPT is a little over 2 years old. So for all the rapid advancements (China’s DeepMind appears to have dramatically lowered the cost of building out AI), it still feels like we’re all acting like annoying first time parents who think their baby is a frigging genius. 

Sure, it’s impressive—but my hunch is that it’ll be nothing compared to watching Lucy ditch her digital nappies and grow into adulthood.

As the old saying goes:

Small kids, small problems. Big kids … big problems.

Tread Your Own Path!