‘Why ChatGPT will never beat the stockmarket’
This was the title of a quick opinion piece from the AFR yesterday. I’’ll spare you the need to read it yourself, as the conclusion is exactly as the title suggests.
The author, Tom Richardson, believes AI simply isn’t able to deal with the complexities of modern markets. And to his credit, he is right. ChatGPT will even tell you that itself.
Just look at the response it gave my colleague Ryan Dinse:
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But that is simply its limitation right now…
Trying to claim that AI will never be able to beat the market, well that’s a far different matter. In fact, I even decided to ask ChatGPT what it thought about this for the fun of it. Here is what it told me:
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According to the bot itself, AI is already deeply linked to investing efforts. So, who are we to believe?
Well, fortunately, I can tell you that I’d certainly be siding with ChatGPT on this one. Because while it isn’t quite up to the task of picking stocks (it is just a chatbot after all), other software is…
Our little secret
You see, when it comes to AI stock picking, we’re actually pretty familiar with the idea.
One of my colleagues, Callum Newman, actually decided to implement an AI system into his stock-picking strategy. Fortunately, he had some help from software developers to bring the concept to life, but it’s his financial experience and investing knowledge that is at the core of the system.
In fact, he’s been using it as part of his Small-Cap Systems publication for a while now. It’s the secret ingredient to his trading strategy. Because as the past 12 months have demonstrated, in these choppy markets, Cal’s AI has been the difference maker.
Just listen to Cal explain it to you himself:
The point is, like it or not, AI investing is already here…
Whether people want to argue about its rates of success or failure is perhaps the more poignant topic. It’s obvious that most AI critics are happy to dismiss the technology simply because it isn’t 100% perfect.
No piece of AI software can pick a stock with a guaranteed profit.
But neither can a human being.
So what’s the difference between the two?
The advantage that AI will have over all of us in market matters is because it can learn far more and far faster than we can. Sure, it will likely be a long time before AI has the same amount of intuition or curiosity that our minds do, but that isn’t enough to give us the edge. The raw data-crunching power and constant learning is simply going to lead to an exponential rate of development that will supersede our abilities.
And that’s exactly what Cal’s system is tapping into.
It is designed with the same learning principles that will inevitably see AI overtake people at picking stocks…
Don’t get caught up in fear
Now, with all of this in mind, it is reasonable to have questions and concerns.
If you’ve been following this AI story, then you’ve probably seen plenty of fearmongering. Like most new technologies, the threat of change stirs up angst amongst society. And there is perhaps no scarier concept of change than that of a machine outsmarting us all.
I wouldn’t worry too much about the threat of a terminator anytime soon. Because as impressive as AI is getting, it still has a long way to go. Even a lot of the experts will tell you that much. We’ve simply reached a point where AI can seem smarter than it actually is.
Think of ChatGPT like a bird that has learned to mimic what we say. Only this bird knows how to associate words that we give it with other words that are commonly related to it.
It is, in many ways, a typical parlour trick.
But that doesn’t mean you should dismiss it either…
The reason so many are scared is because development in AI is moving fast. So, while I urge you not to get caught up in the fear surrounding the technology, you absolutely cannot afford to be dismissive of it.
All of us are going to have to learn to adapt to this new tool at our disposal. Just like we’ve all had to adapt to computers, the internet, and smartphones.
As investors, don’t be surprised if we all end up having to use AI if you want to turn a profit.
Which is why the best way to get ahead is to embrace it now.
Check out Cal’s system and his service, because it just might be the future of investing for all of us…
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
