Your core thesis seems to be that AI can outsmart the market, while Bogle's thesis was just the opposite: since you can't outsmart it ... buy the whole market. He found a way to execute on that thesis.
But in principle - could it be possible to find a system to outsmart the market? Perhaps. But then in the long run the market would either break or adapt to that system so that its advantage would tend towards zero.
So is the market a random walk on Wall Street? Probably not. It's perhaps rather a distribution machine that directs funds where they are best used to create innovation. Otherwise, how would you explain that the market always goes up. Does this help to select certain stocks, strategies, factors etc.? A good but undecidable question. Because of its over-complexity, the market may still be like a random walk to us.
If you could give us evidence that AI necessarily eliminates its over-complexity and makes the market predictable, then you would have something similar to Bezos' unique selling proposition, since nobody would come up and say "Doug, I love Intelligent Alpha; I just wish the market were a little more complex and less predictable".
When I've been reading your articles and considering the "proper prompts" for the myriad of variables that are out there to consider in creating a smart investment scheme, I am overwhelmed. I admire you tackling this daunting task and wish you well in your journey. I think you are also correct in moving forward in this area as I can't see the established brands disrupting what they already have. They will wait for it to gain traction before buying in themselves. But when you're ready to market it, let us know! Don't sell your work, but market it for yourself. Keep up the good fight.
Your core thesis seems to be that AI can outsmart the market, while Bogle's thesis was just the opposite: since you can't outsmart it ... buy the whole market. He found a way to execute on that thesis.
But in principle - could it be possible to find a system to outsmart the market? Perhaps. But then in the long run the market would either break or adapt to that system so that its advantage would tend towards zero.
So is the market a random walk on Wall Street? Probably not. It's perhaps rather a distribution machine that directs funds where they are best used to create innovation. Otherwise, how would you explain that the market always goes up. Does this help to select certain stocks, strategies, factors etc.? A good but undecidable question. Because of its over-complexity, the market may still be like a random walk to us.
If you could give us evidence that AI necessarily eliminates its over-complexity and makes the market predictable, then you would have something similar to Bezos' unique selling proposition, since nobody would come up and say "Doug, I love Intelligent Alpha; I just wish the market were a little more complex and less predictable".
Enjoyed the read Doug. You are not one to be sitting still that's for sure. Best to you.
When I've been reading your articles and considering the "proper prompts" for the myriad of variables that are out there to consider in creating a smart investment scheme, I am overwhelmed. I admire you tackling this daunting task and wish you well in your journey. I think you are also correct in moving forward in this area as I can't see the established brands disrupting what they already have. They will wait for it to gain traction before buying in themselves. But when you're ready to market it, let us know! Don't sell your work, but market it for yourself. Keep up the good fight.
It’s a fun and brave new world. Thanks as as always for the support John. More to come soon…