Alright, let me begin with a disclaimer – This post is not going to talk about how we can use Gen-AI to pick a winning stock for us.
Now that we have it out of the way, let’s start with –
What is Gen-AI
Since we are on this topic, I asked Chat-GPT and below is the response I got –
Generative AI (Gen-AI) is a type of artificial intelligence designed to create new content—such as text, images, music, or even code—based on patterns and examples it has learned from existing data. It doesn’t just replicate what it’s seen but generates entirely new outputs that follow the same style or structure.
For example:
Text: Tools like ChatGPT can write articles, essays, or stories after learning from a vast amount of written material.
Images: AI like DALL-E can create original images by analyzing art styles and objects to generate unique visuals.
Audio/Music: AI models can compose new pieces of music after learning the characteristics of different musical genres.
Gen-AI uses complex models, often based on neural networks like transformers, to understand and replicate patterns in data. These models predict what comes next or how something should be constructed based on their training, enabling the creation of entirely original outputs.
What Next?
That’s a pretty cool! You can basically ask anything and Gen-AI gives you the best answer to it’s ability. But here is the catch – it might get certain things wrong. It may give you not the most accurate answers for everything.
If it’s not perfect then why are we even talking about it?? And that too how can we use this for Investing??
Gen-AI/Conversational AI provides the advantage of using models that are usually trained on publicly available or licensed data from a variety of sources. These may include:
Books: Public-domain or licensed books.
Webpages: Articles, blogs, and other publicly accessible pages.
Scientific Papers: Research articles that are freely available.
News Articles: Publicly available news stories.
Conversations: Public forums or online discussions (if permitted by their terms of service).
How to Use it for Investing?
Gen-AI could give you pretty good results for questions related to publicly available information. If publicly available data can be found by Googling, then why do we need this AI?? Let’s take an example – Let’s say I would like to know all the segments a company makes money from. Say, for NVIDIA. Let’s check with Chat-GPT
That’s a great answer! Instead of me spending few minutes to hours reading through the company’s website or other articles to figure this out, I could ask GPT and it gave me an answer in few seconds. This gives me a good picture of what kind of company I’m looking at.
The point is not to use AI to make decisions for us, but to use it’s intelligence to improve our efficiency in search for some important factual information. We should use this tool to it’s maximum capability for our benefit by not letting it make decisions for us. That’s because Value Investing is about certain principles and philosophies. And as an individual you have your own judgement.
I’ve been asking this tool for all kinds of questions related to investing. For instance, I asked it to give me a table of Revenues for past 5 years and it gave me a table of the revenues!
You could also ask about a companies Moat. It will give you an answer based on some of the existing analysis online. One advantage is, we do not have access to all the data/analysis from analysts but GPT scours the whole web in matter of seconds and gives you the answer. You will get a good head-start and concise data. Based on how you feel, you can start researching and if you don’t like it – you chuck it! Decision taken within few minutes.
It’s not the tool but how you use it
Disclaimer
The following blog posts are provided for informational purposes only and should not be considered as financial or investment advice. The content presented in these blog posts is based on the author’s personal opinions, research, and analysis of the financial markets.
Investing in stocks, bonds, cryptocurrencies, or any other financial instruments involves risks, and past performance is not indicative of future results. The value of investments can fluctuate, and it is possible to lose some or all of your investment. It is essential to conduct thorough research and consult with a qualified financial advisor or professional before making any investment decisions.
The information provided in these blog posts may not be suitable for all investors and should not be relied upon as the sole basis for investment decisions. Each individual’s financial situation, risk tolerance, and investment goals are unique, and it is crucial to consider these factors before making any investment choices.
The author of these blog posts does not guarantee the accuracy, completeness, or timeliness of the information provided. While every effort has been made to ensure the information’s reliability, the author and the blog cannot be held responsible for any errors or omissions. The author may hold positions in the stocks or companies mentioned in the blog posts, which may influence their views and opinions.
By accessing and reading these blog posts, you acknowledge and agree that the author, the blog, and any associated individuals or entities are not liable for any losses, damages, or actions taken based on the information presented. You are solely responsible for your own investment decisions and should seek professional advice if needed.
Remember, the financial markets are inherently unpredictable, and there are no guarantees of investment success. Proceed with caution, do your due diligence, and consider the risks involved before making any investment decisions.
