How Will Artificial Intelligence Change Your Investing?
Does FireEye (FEYE) have what it takes to be a top stock pick for momentum investors? Let's find out. ·Zacks
Kevin Cook
Updated
(0:20) - qplum: Deep learning & AI Based Trading Strategy
(3:30) - AI Disruption On Asset Management Industry
(7:00) - Customized Portfolios: How AI Is Useful To Investors
(11:00) - Adjustment and Rebalancing Strategies of qplum
(15:30) - Tax Efficiency & qplum Integration With Brokers
(18:00) - qplum's Assets Under Management & Performance
(21:10) - How Will qplum Survive The Next Bear Market?
(25:00) - Episode Roundup: Podcast@Zacks.com
Welcome back to Mind Over Money. I'm Kevin Cook, your field guide and story teller for the fascinating arena of behavioral economics.
Fintech innovations are changing investing tools and behavior in powerful ways that you must begin to explore if you are an investor of any age. In fact, even if you think you are too young or too old to invest, you should listen to this, especially if you know anyone employed in the financial industry.
Because that job market is about to go through some drastic changes at the hands of AI. And today I have an expert on both investing and AI who is going to help us understand the changes that are coming.
Gaurav Chakravorty is the co-founder and CIO of qplum, an asset management firm that offers deep learning and AI-based trading strategies.
You may recall on my November 1st episode titled Deep Learning Goes to Wall Street, I talked about qplum as a new disruptor on the investing block. We'll meet the man behind the machine in a moment after I give you some background and some resources.
First the resources. I talk a lot about behavioral biases and blindspots on Mind Over Money, and one place to get a quick primer on these is in the article I wrote for the very first episode. You can always find the link pinned at the top of my Twitter feed @KevinBCook and here on this Medium page...
Mental Models of Financial Sabotage
And here is the archive page for all Mind Over Money episodes.
Why Would I Want a Robo-Adviser?
qplum's motto is “Investing can now be a science and not a game.”
And to achieve this goal, they are using “dynamic AI strategies and protecting against downturns.”
In describing their core investment philosophy on the company website, the qplum team says “We believe in the mathematics of data-driven decision-making, the science of behavioral economics, and the art of effective communication.”
qplum (yes, the name is spelled all lowercase) emphasizes that they are offering investing strategies, not products. And those strategies are coming from a data scientist and computer engineer, Gaurav Chakravorty, who spent the start of his career building machine learning models before he took finance classes at Wharton that inspired him to bring the two worlds together.
Contrary to Wall Street hedge funds that hire quantitative PhDs to build complex investing and trading algorithms, qplum “taught” their AI to learn on decades of market and economic data what works best in the long-term, if given the chance to re-balance a portfolio as frequently as necessary.
From my discussions with Gaurav Chakravorty, I can see that this type of technology will enable many strategies and approaches to investment management that transform Wall Street.
Besides many of the unique attributes of the qplum offering, one that stands out is being able to connect their strategies right to the investor's current broker or custodian via an API.
This alleviates the need to sell holdings and move your accounts from institutions like TD Ameritrade AMTD and Interactive Brokers IBKR.
Podcast Interview Intro
I forgot to mention on the episode that Mr. Chakravorty and his wife just welcomed a healthy baby boy into the world. Congrats and best wishes to their growing family, including a very happy 4-year old big sister!
Gaurav, welcome to Mind Over Money.
I told you that I have a love/hate relationship with the algos on Wall Street. I was a HFT currency trader who was eventually replaced by a computer that could do FX arbitrage better, bigger, and faster than I could.
I wasn't depressed about that because it drove me into the world of equities, which are a richer universe of investing themes and challenges.
But now -- as much as I love the potential of AI and I'm an investor in NVIDIA (NVDA) -- I'm reading an article by you from October titled "Artificial Intelligence is disrupting asset management jobs now. Don't get left behind."
Gaurav, are you telling me my career as a stock-picker is in jeopardy and I should be looking to expand my knowledge/skill set?
To hear the full interview with Mr. Chakravorty, just click the podcast player at the top of this article, or go to the Mind Over Money page. He also explains why the qplum AI models are not curve-fitted to past data, but rather use the modern statistical method of testing known as "walk-forward" optimization.
And don't forget that some of my favorite AI investments are also companies that will be part of the "fintech" revolution on Wall Street like Microsoft MSFT, Alphabet GOOGL, IBM, andNVIDIA NVDA.
Disclosure: At publication, I owned shares of NVDA for the Zacks TAZR Trader portfolio.
Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the TAZR Trader and Healthcare Innovators services.
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