Posted on 07/04/2023 11:26:23 AM PDT by nickcarraway
ChatGPT and other intelligent language tools are bad at picking stocks – but that doesn't mean there's not a role for AI in the world of investing, according to Bridgewater's co-CIO.
Greg Jensen said Monday that while large language models like OpenAI's chatbot are "awful" at reading the market, the world's largest hedge fund is using them to produce hypotheses that are then tested through rigorous statistical analysis.
"If somebody's going to use large language models to pick stocks, I think that's hopeless – that is a hopeless path," he told Bloomberg's "Odd Lots" podcast.
Bridgewater is instead "combining large language models that are bad at precision with statistical models that are good at being precise about the past but terrible about the future," he added. "Combining those together you start to build an ecosystem that I believe can achieve the types of things that… Bridgewater can do – but it can do it at so much more scale."
Jensen's comments seem to chime with what people love – and hate – about large language models like ChatGPT.
The AI-powered tools often make minor mistakes, sometimes "hallucinate" entirely new answers, and can't use up-to-date macroeconomic data when they make predictions.
But the bots are capable of rapidly producing huge amounts of text – and that's what Bridgewater plans to harness, according to Jensen.
(Excerpt) Read more at markets.businessinsider.com ...
Blackrock disagrees with this, or they wouldn’t be using them already.
Where do you see that the use them, and do you believe everything they say?
It might be useful to create a prompt for ChatGPT to write a prospectus of a given public company, with both pros and cons, based on open source data and reviews. However, I think the latest data might be from 2021.
Just buy BOTZ ...
They admit it.
We only know about the public version of AI, not what they have in the labs. My understanding is the lab version is much more capable than what they released to the public.
https://www.blackrock.com/ca/institutional/en/insights/investment-actions/ai-investing
I tested ChatGPT on its real estate knowledge and where best to buy properties for rental based on growth of the area and the 1% rule. It nailed that!
All the big boys are including AI in their investment making decisions.
https://www.cbinsights.com/research/blackrock-citigroup-jp-morgan-esg-investing-ai-strategy/
That’s because they were programmed by libtards
Like Cramer
Oh those AIs are actually very good at investing, they just give bad advice to people to put us on the losing side of their trades ;-)
Even small margins can lead to big gains over the long term.
I trust Blackrock and Vanguard and JP to not over rely upon it for their investment decisions, but they are including it as a tool to help make decisions.
Umm... you don't need a statistical model to predict the past. LOL.
I get it. They are trying to find correlating factors from past stock runs and find similar situational set-ups with current stocks hoping that history will repeat itself. It's can't be that easy.
The people who are making the really big money in the markets are the ones who take commissions from stock trades, investment banking, and those super fast computers that can front run buy and sell orders faster than the day traders can get executed. They take fractions of penny out of the system a billion times a day.
Blackrock acts as a market maker. They front run order flow. They move the market just a few pennies if they have to. At least as far as that aspect of their business goes it isn’t very complicated. They just step in front of other people’s orders and take a penny or two. They have visibility deep into the bids and offers and help move the stock up and down to execute those bids/offers. It’s just math. Not predictive modeling.
Not sure if ai is good today but it will be spectacular soon
They can help investors who don’t listen to them. There is no such thing as artificial intelligence. It is artificial but it is not intelligent. What is called AI a shitload of nested algorithms. The decision tree is so big that the millions of branches are written by tens of thousands of different people. I suspect most of them are H1B visa workers. They have a different way of looking at reality. You can expect your algorithms to be like the people who write them. You get enough data storage space and RAM and enough processors running in parallel and you can get a system that works fast enough to appear as actual thought.
And that is the thing about artificial intelligence. When we talk about it, do we consider it to be thinking? Is it conscious? Admittedly from looking at people around us we might have an impression that AI bots have to be smarter than some of the people we run into every day. But even the stupidest of people is smarter than the best AI system going. Even a dog is smarter than AI, it just doesn’t have a means to make its thoughts known.
I would trust any large investment fund to want to move the market in the direction they want it to go. Unlike us small fry they can raise the price by buying or lower it by shorting (excepting instances of small fry banding together as the game stop thing). If the big funds say that XYZ will got up to current price + 10, be sure that they will be saying that because they want to go long themselves and hope others will follow in the herd so they can get out with a profit as something like price + 5—and they may well be ready to short at price + 7 ....
I think what you are referring to is frontrunning. That’s what a lot of people suspected Bernie Madoff was doing for years.
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