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Perplexity AI's new tool for researching the stock market

zdnet.com

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Re: Perplexity AI's new tool for researching the stock market

#41

Post by Maxatar »

plaidfuji wrote: post #31
Maxatar wrote: post #30

Earlier quoted context omitted.

As a quant myself, we don't try to predict the market, at least not the way that people normally talk about predicting, and we certainly don't move the market in our favor. At least what my firm does, is we look at the current state of the market at any given time point, and test whether the current state of the market satisfies our model of an efficient market. If it does, then there's no action to take, if it doesn…

So basically, you’re seeking super low-risk arbitrage opportunities of low-moderate complexity, but like, really high throughput and with really low latency trading?

Exactly, over the past 15 years of doing this I can basically recall every single day that my firm had a net loss, with Brexit was the biggest one. Most of the losses were due to technical failures/bugs/networking issues, very few one of them were due to issues with the model.

And yes, high throughput and low latency are critical aspects of our trading and they are factored into the model as well, in that for every deviation we observe from our model need to measure how long such a deviation is likely to last and we only trade on those which are likely to last long enough for the trading algo to complete.

Re: Perplexity AI's new tool for researching the stock market

#42

Post by immibis »

jdhwosnhw wrote: post #22
immibis wrote: post #14

Earlier quoted context omitted.

nothing. There is no way to predict the stock market. Even the way you're probably thinking of. Even the ones in the replies to this comment. Even the really basic ones and the really advanced ones.

The existence and success of the Millenium fund is a (probabilistic, to be fair) disproof of your assertion.

Outlying returns can be produced by pure chance, or also by cheating.

Re: Perplexity AI's new tool for researching the stock market

#43

Post by tim333 »

serjester wrote: post #4
airstrike wrote: post #2

Speaking as a former M&A financial advisor and valuation nerd, historical financial data is very close to worthless for any valuation work, except perhaps for vaguely connecting the dots to your proprietary, forward looking financial model which is based on a deep understanding of a particular company and industry. This reads to me like garbage in, garbage out... just like 99.9999% of current resources on financial d…

I don't touch finance, but I'd be curious to have you elaborate on the data sources that a professional does care about.

Warren Buffett is famous for reading the annual reports, basically all of them and starting from the back where you tend to get the embarrassing stuff in small print.

He also reads mainstream press - wsj, ft etc.

Re: Perplexity AI's new tool for researching the stock market

#44

Post by tim333 »

sirsinsalot wrote: post #13
airstrike wrote: post #2

Speaking as a former M&A financial advisor and valuation nerd, historical financial data is very close to worthless for any valuation work, except perhaps for vaguely connecting the dots to your proprietary, forward looking financial model which is based on a deep understanding of a particular company and industry. This reads to me like garbage in, garbage out... just like 99.9999% of current resources on financial d…

That's a lot of "this won't work" without very much "here's what does work" leading me to conclude this is bluster and ego. I always hear these finance people dick waving about how crap everyone else's methodologies are without examples of their own. This leads me to conclude it's all snake oil anyway. So I'm asking, speaking as a former M&A financial advisor... What _does_ work?

I'm not a former M&A guy but observing people in the market, figuring out the fundamentals better than the other guys and investing to maximise your returns can work and people like Buffett, Watsa, Soros and the late Simmons could do well enough to give billions away to charity. A few gotchas

- It can be a bit of a zero sum game and the Buffett's and Soros make outsized returns because joe public makes lower ones.

- Investing like that is hard - Buffett would basically spend all waking hours studying the stuff when younger. Just reading a How to Invest Like Buffett article doesn't cut it.

- Most "investment professionals" make money on fees from clients and so will recommend what sells to clients - typically the hot thing of the day - rather than what's the best investment which is often cheap because most people think it's dull / doomed / unrespectable.

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