Wikipedia defines alarmism as the excessive or exaggerated alarm of a real or imagined threat. Alarmists are generally pushing an agenda and attempting to excite fears or give warnings of great danger in a manner that is amplified, overemphasized, or unwarranted.
This is not a new phenomenon. Thousands of years ago, diverse cultures were led to believe in risks of great harm from eclipses. Ever since, it seems there has always been grist for the panic industry’s mill. Major developments, such as the industrial revolution, automobiles, radio, airplanes, and nationwide electrifications, to mention a few, were nearly always initially billed as having terrible consequences.
More recently, we were treated to a litany of predictions relating to the existential risks associated with climate change. Now we have AI to worry about. Both have been the subject of predictions of various apocalyptic risks, and both are seeing some updates that suggest that things might not be as bad as initially thought.
Regarding climate, recently, an international team of researchers published a major revision of the emissions scenarios used to study global warming. Modeling is always difficult and tends to include a range of “best estimates.” As new data becomes available, model revisions are the norm.
While there continues to be much speculation relating to the long-term impact of AI, Sam Altman, Open AI CEO, recently noted that the jobs apocalypse he once expected probably won’t happen.
Investors, when assessing the potential opportunities presented by new developments, should recognize that the eventual outcome tends to fall between the most bullish estimates and the most dire warnings of imminent catastrophes.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA
