David Booth says AI may change daily life, but it will not change how stock and bond prices are set. The investor argues that even if AI makes people and companies more efficient, that advantage will be shared across the market rather than turned into a lasting edge for any one buyer or seller.
He calls that progress an “ice block to refrigerator” level of advancement, and says AI already helps people finish everyday tasks more efficiently. Booth also says the technology could eventually help with health care, transportation and the nature of work, but he draws a hard line at investing: returns remain uncertain, and no AI agent knows what is coming.
University of Chicago and market efficiency
Before 1960, Booth wrote, no one knew what a market wide portfolio typically returned. During his graduate school days at the University of Chicago, he said he was part of the data revolution that helped the investing world understand that markets were efficient, and that the average return for US stocks over the last century has been about 10% a year.
That history sits at the center of his case against AI stock picking. If the market is the world’s largest information processing machine, as Booth puts it, then any new tool that helps one investor gather information faster should also help everyone else doing the same job.
Millions of trades a day
Millions of times a day, buyers and sellers agree to trades only when both sides think the price is fair, Booth wrote. Repeated at that scale, the process pushes stocks toward a reasonable price and leaves little room for one model to keep finding mispriced names before everyone else.
He said that to believe an AI agent can help you beat the market, you would have to believe it can know which stocks are mispriced and when. Booth said that is unrealistic over the long haul, because most professional stock pickers cannot compete and there is no compelling evidence that money managers can reliably pick winners over time.
Dot Com boom warning
1999 offers Booth a cautionary comparison. He wrote that Lucent Technologies and Nextel Comms led the top telecom stocks during the Dot Com boom, but 25 years later only 1 of the top 20 stocks from that time was able to survive in its corporate structure.
That is why he warns against putting all of a portfolio into AI stocks or assuming the companies tied to an AI revolution will be the only winners. Booth said most companies will likely use AI to improve efficiency and increase productivity, and that gain will be spread across market participants rather than converted into a durable stock-picking shortcut.
AI and portfolio noise
Using AI to buy and sell stocks, Booth wrote, can add anxiety and random noise to individual investors. The cleaner lesson for a portfolio is narrower: AI may improve the way businesses operate, but it does not repeal market pricing, and it does not guarantee that one particular model will systematically outperform the competition.
For investors, that leaves a simple discipline. Treat AI as a tool for research and productivity, not as proof that the next trade will beat the market.
