To Investors,
Two months ago I shared with this group a simple analysis from Perplexity, where I asked the AI model to give me the three South African stocks that it thought were the most attractive to buy at the time.
One of the stocks that the model picked was TFG (The Foschini Group).
Well, TFG announced their earnings towards the end of last week and highlighted some key points that showed that the company crushed it.
Standout points included the fact that revenue went up 4.1% to “a record R62.6 billion”; Gross Profit reached a record R28.8 billion; the company posted a gross margin at almost 50% (those are software business numbers); and their popular e-commerce platform, Bash, reached breakeven 2 years ahead of schedule, after the platform was launched only in February of 2023. All of these are key statistics that show that TFG is a dominant market player.
TFG stock is up 10% since I made that query with Perplexity.
Is it shocking that an AI model was able to pick this stock and accurately predict how well the company would perform?
Maybe, but perhaps not, because remember that Perplexity is a search engine first, meaning all that Perplexity did with regards to my query was analyse information that was already out there, and make a call. So this isn’t necessarily damning for career analysts because they still had to do the work to put out the original information that Perplexity drew from, and it's no secret that TFG is one of the largest clothing retailers in South Africa with 39 brands over both South Africa and the UK, therefore the company is poised to outperform over the long term. What is damning is how quickly the model synthesised information, and for free – noting I used a free version of Perplexity search.
So, do you see the trend here?... We will all be able to do more, for less, and companies may be able to save costs by allocating tasks to AI agents, but humans won’t necessarily be replaced at the rate that a lot of the fear mongers out there suggest. Instead, your role will change, and you may be expected to be able to do more with less, but that should be the goal right? Because higher productivity produces higher gains. Don’t fear the technology, lean into it and use it to make yourself better.
How are you using AI in your day-to-day work?
On my journey to becoming a master capital allocator, one lesson down, a billion more to go.
I hope you all have a great day
-Mansa
🚨READER NOTE: I launched the Self-Taught MBA podcast this week, where I’ll document my conversations with the most interesting people in the world, on my journey to becoming a master capital allocator. Follow the show on Spotify…
… I’ll add content to more platforms very soon! Here’s my first episode with Warren Wheatley:
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