FT News Briefing Introducing Tech Tonic: You Can’t Always Get What you Quant
Jul 23, 2021
Robin Wigglesworth, the Global Financial Correspondent for the Financial Times, dives into the transformative role of AI in finance. He discusses how AI is reshaping stock selection and earnings call analysis. The conversation highlights the risks and rewards of these technologies, as well as their limitations in unpredictable market conditions. Wigglesworth also draws fascinating parallels between children's learning processes and AI capabilities, suggesting that insights from how kids learn could enhance the development of smarter financial algorithms.
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The "But" Detector
- Luke Ellis's team developed NLP software to analyze CEO earnings calls.
- The AI surprisingly flagged the word "but" as a negative indicator, revealing CEO hedging.
AI-Proof Your Speech
- CEOs must adapt communication strategies in response to AI analysis of earnings calls.
- Analyze your speech for AI-flagged terms to avoid misinterpretation by automated systems.
The Hunt for an Edge
- Hedge funds constantly seek legal edges, similar to Venetian merchants using spyglasses.
- AI helps find subtle market signals, like French traders' weather-influenced buying patterns.