81–90 of 116 posts
LLMs labor savings will only help financial market participants if they manage to do it without hallucinations / can maintain ground truth. Sure its great if your analysts save 10 hours because they don't need to read 10Ks / earnings / management call transcripts .. but not if it spits out incorrect/made up numbers. With code you can run it and see if it works, rinse & repeat. With combing financial documents to then…
If I learned anything from a conference by benoit mandelbrot back in my college days is that gaming financial markets is the only real application of anything scientific but I vaguely remember what he was actually talking about, I never quite made it as a mathematician
> is that gaming financial markets is the only real application of anything scientific medicine (living longer, curing disease, vaccines, etc), cheaper energy, cheaper transportation, cheaper construction, cheaper food, better communication, new forms of entertainment, just off the top of my head.
Is it really fair to say that 177B is not far from 500B?
Generally I don't think there is any alpha in training transformers to predict the next price point just given historical price data, because the price is determined by humans (and algorithms trained on data generated by humans) that react to news. If you can predict the news, you can probably predict stock prices, but if you could predict the future you'd have AGI and not some dingy time series calculator.
Earlier quoted context omitted.
> is that gaming financial markets is the only real application of anything scientific medicine (living longer, curing disease, vaccines, etc), cheaper energy, cheaper transportation, cheaper construction, cheaper food, better communication, new forms of entertainment, just off the top of my head.
I've sort of come around on this. Yes, everything you listed is valuable and good. But the reality is all of it was built with money that came from banks and investors. The only reason to do anything scientific is to get investors to give you money. If you do something scientific that does not make people want to give you money you will impact no lives. In this way gaming financial markets is indeed the only point to…
There are quite a lot of science that's basic research and it's done for scientific curiosity only with no clear way of translating that to marketable applications.
There were some developments using LLMs in the timeseries domain which caught my attention. I toyed with the Chronos forecasting toolkit [1], and the results were predictably off by wild margins [2] What really caught my eye though was the "feel" of the predicted timeseries -- this is the first time I've seen synthetic timeseries that look like the real thing. Stock charts have a certain quality to them, once you've…
I used to work in financial software, and when writing the charting UIs, I'd wire them up to a randomwalk to generate fake time series data. It was a relatively common occurrence for a VP or the company CEO to walk by, look at my screen, and say "What stock is that? Looks interesting." Unpopular opinion backed up by experience: a randomwalk is the most effective model for generating timeseries that have the "feel" of…
Or two series that are dependent, but individually look like random walks.
Earlier quoted context omitted.
I used to work in financial software, and when writing the charting UIs, I'd wire them up to a randomwalk to generate fake time series data. It was a relatively common occurrence for a VP or the company CEO to walk by, look at my screen, and say "What stock is that? Looks interesting." Unpopular opinion backed up by experience: a randomwalk is the most effective model for generating timeseries that have the "feel" of…
This is true, I have tested this with multiple veterans and none could tell them apart
A lot of words for not bringing much new content to the discussion. I think the most interesting application of LLMs in Finance are (1) synthetic data models for data cleansing, (2) journal management, (3) anomaly tracking, (4) critiquing investments All of this should be done by professionals and nothing is "retail" ready.
What the hell is this even for? What the hell are we even doing here? If computers can successfully guess the market, what the hell is it even?
Earlier quoted context omitted.
I've sort of come around on this. Yes, everything you listed is valuable and good. But the reality is all of it was built with money that came from banks and investors. The only reason to do anything scientific is to get investors to give you money. If you do something scientific that does not make people want to give you money you will impact no lives. In this way gaming financial markets is indeed the only point to…
Take particle physics for example, the LHC was incredibly expensive and most people's life won't be better that that we've found the Higgs field. It was also not paid by investors but public money. There are quite a lot of science that's basic research and it's done for scientific curiosity only with no clear way of translating that to marketable applications.
Earlier quoted context omitted.
This is true, I have tested this with multiple veterans and none could tell them apart
I have tested this with multiple veterans and none could tell them apart - but they had a high conviction on which random walks were a good buy and which were compelling shorts.