There's a question Raoul Pal asked during a recent interview that made me pause the video and think for several minutes. It's a question that, as a computer scientist who works with technology every day, resonates deeply with me: "What's the point of being a trader when you have a general artificial intelligence that can do it better than you? What competitive advantage do you possibly have?" It's an uncomfortable question, one we'd rather not ask ourselves. But ignoring it could cost us dearly.

The greatest change in human history

Pal doesn't mince words when describing what lies ahead. And it's not the usual clickbait scaremongering we're used to reading on social media. We're talking about a professional who predicted the 2008 crisis, who manages research for billion-dollar hedge funds, who predicted Bitcoin's price at $100,000 when it was actually $100. When someone like that talks about the future, maybe it's worth listening.

Let's pause for a moment to digest this concept. For thousands of years, humans have been at the pinnacle of the intellectual chain. We've built civilizations, invented the wheel, conquered space. And now, for the first time, we're creating something that could surpass us. Not in a specific task like playing chess or recognizing images, but in everything. A general artificial intelligence, capable of reasoning, creating, and adapting better than any human mind.

Is trading as we know it on its last legs?

This is where Pal's reflection becomes particularly relevant for those of us who, like many of our readers, operate in the financial markets. If general artificial intelligence becomes a reality, what room is left for human traders?

Think about it for a moment. Trading is fundamentally based on two elements: access to information and the ability to process it better or faster than others. A general artificial intelligence would have instant access to all available data on the planet, could analyze patterns invisible to the human eye, would not suffer from cognitive biases, would not panic during a flash crash, and would not need sleep.

As a computer scientist, I work every day with systems that automate complex processes. I've seen what machine learning can already do in areas that until a few years ago seemed the exclusive domain of human intelligence. The idea that AGI could make discretionary trading obsolete doesn't strike me as science fiction. It seems like a reasonable projection of where we're going.

But then, what should we do?

This is where Pal offers an interesting perspective. Instead of fighting the inevitable, he suggests riding the wave. If artificial intelligence represents the greatest transformation in human history, why not position ourselves to benefit from it rather than be overwhelmed by it?

His thesis is simple: we're facing mega secular trends, long-term trends so powerful that trying to beat them with short-term trading is almost always a losing proposition. Technology, and AI in particular, isn't cyclical like other sectors. It doesn't follow the traditional business cycle. It's a secular trend because, as Pal says, "tomorrow will be more digital than today." Always. Without exception.

AI as a superpower accessible to all

There's a passage from the interview that particularly struck me, perhaps because it speaks directly to those, like me, who work in the tech world. Pal suggests a simple experiment that anyone can do today, right now, with the tools already available.

I tried. I took some charts of stocks I've been following for a while, uploaded them to ChatGPT, and asked for an analysis. The results were surprising. Not so much for the accuracy of the forecasts (which is always an unknown), but for the depth of the contextual analysis. The AI was able to identify patterns, connect price movements to macroeconomic events, and suggest relevant technical levels, all in a matter of seconds.

The paradox of the exponential era

Pal often talks about the "exponential age" we've entered. It's a concept anyone in the tech industry knows well: Moore's Law, the doubling of computing power every 18-24 months, the constant acceleration of technological progress. But applied to artificial intelligence, this concept takes on proportions difficult for the human mind to comprehend.

Our brains are programmed to think linearly. If I walk for an hour at 5 km/h, I travel 5 km. Simple, intuitive. But exponential growth doesn't work like that. If I double something 30 times starting from 1, I don't get 30. I get over a billion. This is why we struggle to imagine where AI will be in 5 or 10 years: our minds aren't equipped for these kinds of projections.

How to position yourself for the future

If we accept the premise that AGI will arrive and radically change the world of investing (and beyond), the question becomes: how do we prepare? Pal suggests a two-step approach.

The first is conceptual: stop thinking of trading as the main path to building wealth. Not because trading is bad per se, but because in a world where AI can do it better than us, our competitive advantage is eliminated. It's like deciding to compete with Usain Bolt in a running race: technically, you can try, but the outcome is a foregone conclusion.

The second is practical: positioning yourself on the megatrends that will benefit most from this revolution. Technology, of course. But not only that. Everything that enables, supports, or benefits from artificial intelligence: cloud infrastructure, semiconductors, energy, robotics, AI-enhanced biotechnologies.

The Human Side That AI Can't Replicate (Yet)

There's one aspect that Pal doesn't explore in the interview, but which I think deserves reflection. Even in the age of AGI, there will likely be niches where the human element will retain its value. Not in quantitative trading or data analysis, where AI will undoubtedly dominate. But perhaps in relationships, trust, and understanding the social and political dynamics that move markets in unpredictable ways.

I'm thinking, for example, of venture capital, where the ability to evaluate a founder goes beyond numbers. Or financial consulting, where empathy and understanding the client's fears and aspirations remain crucial. These are areas where the human element could remain relevant even in a world dominated by artificial intelligence.

That said, it would be naive to think that these niches will remain protected forever. AI is already making enormous progress in understanding language, emotions, and human behavior. It's a race against time, and time is on the machines' side.

My personal reflection

I write these lines with mixed feelings. On the one hand, the enthusiasm of those who work in technology and see things coming to fruition that seemed like science fiction just a few years ago. On the other, a subtle anxiety for a future that seems to be arriving faster than we're ready to welcome it.

As an investor, Pal's words have convinced me to reassess my allocation. I'm not stopping trading, but I'm increasingly recognizing its limitations in a world changing exponentially. Most of my capital is now dedicated to capturing the megatrends he talks about: technology, AI, and everything that revolves around this revolution.

As an IT professional, I realize that my work will also change radically. The systems administrators of the future will likely work alongside AI that will manage infrastructure with an efficiency we can't even imagine today. The question isn't if this will happen, but when and how prepared we will be.

Pal's answer is simple yet profound: capture megatrends, use AI as a tool instead of fighting it, and stop fooling yourself into thinking that discretionary trading will give you a sustainable long-term advantage. It's not an answer everyone wants to hear, but it might be the right one.