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Financial Statement Analysis with Large Language Models

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Re: Financial Statement Analysis with Large Language Models

#131

Post by flourpower471 »

worik wrote: post #126

I am disturbed to see so much enthusiasm here for "trading" Markets matter, and some speculation is useful, but the purpose of markets is not speculation. Obviously. If you want to make some money get trained and get a good salary. Save your money in safe assets if you want to get supper rich be super creative, ensure going broke will only effect you (i.e. do not do this while supporting a family), and found a firm.…

>>> If you want to make some money get trained and get a good salary. Save your money in safe assets.

You mean like the good salary you get working for a trading firm?

I'm not sure what this comment you made is meant to be, but it reads like a blend of somebody who's high and a tik tok wellness influencer.

Trading is not a zero sum game in the sense you intend to suggest it is. It is 0 sum only if all participants have the same trading horizon.

The pool grows in the same way because it is linked to the economy. The markets are a variety of players with different requirements.

Most transactions occur between parties who have different horizons. Yes the hft makes money over 5s and the pension fund loses it. But the pension fund is looking at the return over the next year, so the small loss to the hft is just a cost of acquisition.

Re: Financial Statement Analysis with Large Language Models

#132

Post by richrichie »

chollida1 wrote: post #91
posting_mess wrote: post #73

Earlier quoted context omitted.

Quantitative trading is simply the act of trading on data, fast or slowly, but I'll grant you for the more sophisticated audience there is a nuance between "HFT" and "Quant" trading. To be "super right" you just have to make money over a timeline, you set, according to your own models. If I choose a 5 year timeline for a portfolio, I just have to show my portfolio outperforming "your preferred index here" over that t…

> the way to calculate the price of an Option/Derivative hasn't changed in my understanding for 20/30 years That’s not true. It is true that the black scholes model was found in the 70s but since then you have - stochastic vol models - jump diffusion -local vol or Dupire models - levy process - binomial pricing models all came well After the initial model was derived. Also a lot of work in how to calculate vols or pr…

Very few of the fancy models are actually used. Dupire's non parametric model has been the industrial work horse for a long time. Heston like SV's and Jump diffusions promised a lot and did not work in practice (calibration, stability issues). Some form of local stochastic models get used for certain products. In general, it is safe to say that Black-Scholes and its deterministic extension local vol have held up well.

Re: Financial Statement Analysis with Large Language Models

#133

Post by staunton »

flourpower471 wrote: post #107
posting_mess wrote: post #94

Earlier quoted context omitted.

They hire people who know that maths doesn't "top out here", so they can point to them and say "look at that mathematicians/physicists/engineers/PHD's we employ - your $20Bn is safe here". Hedge funds aren't run by idiots, just a different kind of "smart" to an engineer. The engineers are are incredibly smart people, and so the bots are "incredibly smart" but "finance" is criticised by "true academics" because financ…

It is just a different (applied) discipline. It's like math v engineering - you can come up with some beautiful pde theory to describe this column in a building will bend under dynamic load and use it to figure out exactly the proportions. But engineering is about figuring out "just make its ratio of width to height greater than x" Because the goal is different - it's not about coming up with the most pleasing descri…

> The three body problem is also harder than running experiments in the LHC or analysing Hubble data or treating sick kids or building roads or running a business

Not that it's particularly relevant to this discussion but the three body problem is easy. You can solve it numerically on a laptop with insane precision (much more precisely than would be useful for anything) or also write down an analytic solution (which is ugly and useless because it converge s extremely slowly, but still. See wikipedia.org/wiki/Three-body_problem).

Re: Financial Statement Analysis with Large Language Models

#134

Post by famouswaffles »

ecjhdnc2025 wrote: post #48
foota wrote: post #37

Earlier quoted context omitted.

We come up with all sorts of things that are initially a step backwards, but that lead to eventual improvement. The first cars were slower than horses. That's not to suggest that Renaissance is going to start using Chat GPT tomorrow, but maybe in a few years they'll be using fine tuned versions of LLMs in addition to whatever they're doing today. Even if it's not going to compete with the state of the art models for…

Far too much in the way of "maybe in a few years" LLM prediction relies on the unspoken assumption that there will not be any gains in the state of the art in the existing, non-LLM tools. "In a few years" you'd have the benefit of the current, bespoke tools, plus all the work you've put into improving them in the meantime. And the LLM would still be behind, unless you believe that at some point in the future, a radic…

Specialists exist because the human generalist can no longer possibly learn and perfect all there is to learn in the world not because the specialist has magic powers the generalist does.

If there were some super generalist that could then the specialist would have no power.

Re: Financial Statement Analysis with Large Language Models

#135

Post by latency-guy2 »

flourpower471 wrote: post #131
worik wrote: post #126

I am disturbed to see so much enthusiasm here for "trading" Markets matter, and some speculation is useful, but the purpose of markets is not speculation. Obviously. If you want to make some money get trained and get a good salary. Save your money in safe assets if you want to get supper rich be super creative, ensure going broke will only effect you (i.e. do not do this while supporting a family), and found a firm.…

>>> If you want to make some money get trained and get a good salary. Save your money in safe assets. You mean like the good salary you get working for a trading firm? I'm not sure what this comment you made is meant to be, but it reads like a blend of somebody who's high and a tik tok wellness influencer. Trading is not a zero sum game in the sense you intend to suggest it is. It is 0 sum only if all participants ha…

It's a long winded insult assuaged by a meme phrase at the end to not appear as one, I wouldn't treat it as anything more, what you've said is pretty apt though.

Re: Financial Statement Analysis with Large Language Models

#136

Post by NicoJuicy »

worik wrote: post #126

I am disturbed to see so much enthusiasm here for "trading" Markets matter, and some speculation is useful, but the purpose of markets is not speculation. Obviously. If you want to make some money get trained and get a good salary. Save your money in safe assets if you want to get supper rich be super creative, ensure going broke will only effect you (i.e. do not do this while supporting a family), and found a firm.…

The S&P 500 is obviously not a zero sum game, proof me wrong over the last decades.

Additionally, a wage is the same amount increase per month, while stock is in percentages.

Can't beat percentages depending on your wage/buy-in.

Re: Financial Statement Analysis with Large Language Models

#137

Post by DonsDiscountGas »

> A key research design choice that we make is to not provide any textual information (e.g., Management Discussion and Analysis) that typically accompanies financial statements. While textual information is easy to integrate, our primary interest lies in understanding the LLMs’ ability to analyze and synthesize purely financial numbers. We use this setup to examine several research questions

Seems like an odd test for a large language model. There are tabular models out there

Re: Financial Statement Analysis with Large Language Models

#138

Post by makestuff »

flourpower471 wrote: post #103
posting_mess wrote: post #60

Earlier quoted context omitted.

No hedge fund registered before the last 2 weeks will use Llama3 for their "prod work" beyond "experiments". Quant trading is about "going fast" or "being super right", so either you'd need to be sitting on some huge llama.cpp/transformer improvement (possible but unlikely) or its more likely just some boring math applied faster than others. Even if they are using a "LLM", they wont tell you or even hint at it - "eff…

Well I work in prop trading and have only ever worked for prop firms- our firm trades it's own capital and distributes it to the owners and us under profit share agreements - so we have no incentive to sell ourselves as any smarter than the reality. Saying it's all high school math is a bit of a loaded phrase. "High school math" incorporates basically all practical computer science and machine learning and statistics…

Would you ever go off on your own to trade solo or is that something that just does not work without a ton (like 9 figures) of capital and a pretty large team?

Re: Financial Statement Analysis with Large Language Models

#139

Post by staunton »

jasonfarnon wrote: post #123
flourpower471 wrote: post #112

Earlier quoted context omitted.

Drs rediscover integration is about people stepping far outside their field of expertise. It is neither deception or ignorance. It's the same reason some of the best physics students get PhD studentships where they are basically doing linear regression on some data. Being very good at most disciplines is about having the fundamentals absolutely nailed. In chess for example, you will probably need to get to a reasonab…

write bubble sort backward in assembly you mean backporting a high-level implementation to assembly? Or is writing code "backward" some crazy challenge interviewees have to do now?

Spell the assembly backwards out loud with no prior notes while juggling knives (shows boldness in the way you approach problems!) and standing on a gymnastics ball (shows flexibility and well-roundedness)...

Re: Financial Statement Analysis with Large Language Models

#140

Post by next_xibalba »

Izkata wrote: post #89
posting_mess wrote: post #60

Earlier quoted context omitted.

No hedge fund registered before the last 2 weeks will use Llama3 for their "prod work" beyond "experiments". Quant trading is about "going fast" or "being super right", so either you'd need to be sitting on some huge llama.cpp/transformer improvement (possible but unlikely) or its more likely just some boring math applied faster than others. Even if they are using a "LLM", they wont tell you or even hint at it - "eff…

> but most "trading" isn't as complex as they'd like you/us to believe I know nothing about this world, but with things like "doctor rediscovers integration" I can't help but wonder if it's not deception but ignorance - that they think it really is where math complexity tops out at.

Please cite your references, lest you run afoul of the lulgodz:

https://diabetesjournals.org/care/article/17/2/152/17985/A-M...

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