David Booth: AI may change the world. It just won’t change how you invest

David Booth’s argument is simple, and a little unfashionable: artificial intelligence may be a major step forward, but it won’t turn stock-picking into a superpower. He compares AI to the leap from hauling frozen river blocks into town to having a refrigerator at home. Big improvement. Not a new law of economics.

Booth says AI already makes ordinary tasks easier, from building a workout plan to mapping out a vacation. He also thinks it could help in health care, transportation, and work itself. But when it comes to public markets, he sees a wall. Stocks and bonds are priced through millions of buyers and sellers agreeing on what’s fair, and that process, in his view, is already a giant information machine.

That belief comes straight from the market-efficiency thinking he saw take shape during his graduate school days at the University of Chicago. He points to a century of U.S. stock data showing about 10% average annual returns, and says there is no solid evidence that professional money managers can reliably pick winners over time. If a human can’t know what’s mispriced, an AI model can’t magically know either. Even if AI helps gather information faster, he argues, everyone else gets that same advantage too.

Booth is just as skeptical about piling into “AI stocks” as a shortcut to wealth. He expects many companies to use AI to cut costs and boost productivity, but history says the obvious winners are often not the real winners. He reaches for the dot-com era, when telecom firms built out internet infrastructure and names like Lucent Technologies and Nextel Comms were once near the top. Twenty-five years later, only 1 of the top 20 stocks from 1999 had survived in its corporate form.

His conclusion is blunt without sounding anti-tech: don’t try to guess which company will own the future. He points to more than $1.2 trillion in expected capital spending in 2027 on data centers, chips, and related infrastructure, but says that money could still flow somewhere else entirely. The safer bet, in his view, is to own a broad portfolio and let public markets do the sorting.