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Howard Marks says he has put PerTlexity, an AI tool, to help write his latest memo.
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It has explained how he thinks that regulations have distorted the California fire insurance market, reducing the coverage.
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Marks still include colorful commentary of himself and wisdom of Warren Buffett.
The memos of Howard Marks are considered by many in the financial world as must-reads, including Warren Buffett. PerTlexity, an AI-driven search engine, helped in writing part of his newest missionary.
Marks, the billionaire co-founder and co-chairman of Oaktree Capital Management, has been written memos for 35 years and will be 80 next year. That may make it a bit surprising that he has been prepared in a machine as a contributor.
“In a sign of time, I let my new (and AI-driven) editorial assistant, Perplexity fill you in the background,” said Marks in a Wednesday memo entitled “More about the withdrawal of the laws of the economy.”
The veteran fund manager said that he “had not changed a word” of the output of Pertlexity, which “pretty close to what I would have produced within an hour or two”.
To support his argument for the free market economy and less government intervention, Marks calls in the AI tool to determine that the regulations have distorted the fire insurance sector in California, resulting in widespread underinsurance.
“As a perplexity, insurers were told that they could not praise the brand policy to reflect the increase in the frequency and seriousness of forest fires,” said Marks. “Similarly, they could not increase prices to go through the higher premiums that their reinsurers were loading based on the increased frequency and seriousness.”
The investor of the ailing debts asked whether a hypothetical insurer would cover a $ 5 million house with a chance of 1% to burn off if the supervisor allowed only $ 25,000 a year for a policy.
“I did not need a bewilderment to tell me that the insurance company is on that policy for an expected payment of $ 50,000,” Marks said. “The answer is simple: you don’t write that policy.”
AI tools are divided. They greet proponents as productivity boosters that will free employees from everyday tasks and overload economic growth. Critics fear that they will hinder and develop development, erode skills and destroy so many jobs that they cause mass unemployment.
Marks may have embraced AI, but he still finds value in human wisdom. In his new memo he quoted Buffett and said that the American tax deficit was “untenable” and could be “uncontrollable” during the annual meeting of Berkshire Hathaway in May.
