Articles of Interest

As big-name wealth management firms race to invest in and adopt artificial intelligence technology, financial advisors will become fast friends with the robots, according to experts.

“There’s something called the Efficient Market Theory which says there’s nothing in the data which will indicate anything about the future. But that’s just not true.” – James Simons, Ph.D.

Artificial intelligence (AI) is the simulation of human intelligence by machines. This is accomplished by software that attempts to replicate a human process. Hedge funds and other trading operations utilize artificial intelligence at a very high level to, as an example, gain the slightest advantages in fast-moving markets.

Almost overnight, ChatGPT, the runaway, conversational, large language model (LLM) AI hit created by OpenAI has found itself yet another role to play within American society -- that of stock market guru.

Ken Griffin is riding high, after posting the most profitable year of any hedge fund in history. He’s worth an estimated $35 billion. Citadel’s flagship Wellington fund gained 38% in 2022, while the S&P 500 fell nearly 20%. Griffin is the planet’s wealthiest hedge fund billionaire.

The Medallion Fund, managed by Renaissance Technologies, is one of the most successful and mysterious hedge funds in the world. Founded in 1988 by mathematician Jim Simons, the Medallion Fund has produced impressive returns for its investors and has become synonymous with the idea of using mathematical models and algorithms to trade in financial markets.

One of the most important benefits of this technology is the ability to quickly identify potential investments and make decisions based on data-driven insights. These systems are also able to generate trading signals that can be used to enter and exit positions with greater precision and accuracy, reducing the risk of losses.

Jim Simons is arguably the world’s best investor. Certainly, Renaissance Technologies’ – the firm he founded – track record is enviable: 66% gross annual returns (before fees) since 1988 (and trading gains in excess of $100 billion).

Forbes interviewed Raymond Mullaney on May 27, 2020 and asked him to identify a very favorably-rated stock and a very poorly-rated stock using ERS’s technology. Below are quotes from that interview and a summary of the results.