How AI Can Be Used to Pick Stocks

Across the world, AI is quickly changing the way people and businesses operate. Now the hedge fund world is finding out if AI can be used to select stocks that will perform well.

Alpesh Patel, CEO of Praefinium, has been using Chat GPT to refine his method for stock selection. Patel conducted several experiments to test whether artificial intelligence could be beneficial in the hedge fund industry. And while he discovered that AI can’t predict which stocks will do well in the future, as reported by Business Insider, Patel did find that AI could “confirm your homework, and tell you something you might otherwise have missed based on the data you imputed…  (and) that getting the prompt right was one of the most critical steps.” 

While basic questions to Chat GBT elicited simple answers, further refining the questions helped the AI to generate more insightful answers. Unfortunately, AI is not the crystal ball we have all been waiting for, but Patel maintains that, “If you are willing to get the data, ask the questions and put it into something like this: you’ve got the stock picks, you’ve got the answers. You can basically replace a fund manager if you want”.

Published by James Heinsman

James has worked as a hedge fund manager for years. As someone who has always enjoyed multi-tasking, James brings his vast financial experience and his hedge fund background to his position as writer and editor for Hedge Crunch. Editor James Heinsman can be contacted at james(at)hedgecrunch.com.