NVDA: Using AI to beat the market


Outpacing the Market: Quest for Better Investment Returns Leads to AI

This one is an interesting read. It explains how some hedge funds are using machine learning and AI to try and beat the market.

There are also some links to presentations given at the NVDA GTC:



Outpacing the Market: Quest for Better Investment Returns Leads to AI

Should some fund improve its returns with AI some other investors will pay the price because the distributions of returns won’t change, still 75% of players will underperform the market, what will change is only the relative position of the players. Stuart Kaufmann calls it an “adaptive fitness landscape” – as players learn they change the shape of the landscape.

NVIDIA Corporation, of course, is in a different position, they are the weapons suppliers to the arms race. They are the suppliers of picks and shovels to the gold miners. The Levi of Denim.

Building factor models is often the easy part. The hard part is determining which direction the factors will move before the market does. That is, in the examples above, where are the prices of fuel and steel headed? To sift for clues, firms are using deep learning at massive scale on big data.

I don’t call this investing but speculating, not that there is anything wrong with speculating. In the above example they are not betting on companies but on commodity markets which I have found to be highly risky to the point that I don’t do it anymore. I prefer to look for solid companies with less volatile markets. You don’t need the huge data feeds to find them, HI (Human Intelligence) is sufficient for the task.

Denny Schlesinger

1 Like