A Real Human Investor's Perspective on ChatGPT's Bombardier Investment Advice
The AI chatbot ChatGPT has become a popular tool for investment recommendations, but as with any tool, it has its limitations. In this article, we will take a closer look at ChatGPT's investment advice for Bombardier (TSX:BBD.B) and evaluate its effectiveness.
ChatGPT's Investment Advice for Bombardier
In an effort to test ChatGPT's investment recommendations, a team member at Stock Advisor Canada asked the chatbot to evaluate Bombardier's suitability as a five-year investment. The chatbot provided three reasons why Bombardier could be a good investment:
- Market Position and Diversification
- Growth in Aerospace and Rail Sectors
- Innovation and Technological Advancements
While these do qualify as reasons, there are some issues to consider.
Limitations of ChatGPT's Advice
Firstly, time horizon wasn't factored into ChatGPT's response, which is a crucial variable when it comes to investing. Additionally, the chatbot failed to recognize that Bombardier no longer has a rail division, which renders the first and second reasons it presented irrelevant.
Moreover, ChatGPT's response lacked specificity, which is a crucial factor in establishing an investment thesis. For instance, simply pointing out that Bombardier has a history of innovation without considering the costs associated with it is incomplete.
Finally, there is a lack of consideration for the cyclical nature of the aviation industry, which could impact Bombardier’s performance in the future.
Human Analysis is Crucial for Investments
While ChatGPT can be useful in solving some problems, it misses the mark when it comes to the softer skills required to navigate the stock market. Holding opposing views and evaluating each of them to arrive at a conclusion is a task best left to the human brain.
As such, while ChatGPT's investment advice can be helpful, it is always important to do thorough research and consult with a financial advisor before making any investment decisions.
