In the world of US stocks, the past two years have been quite focused on AI. The excitement around this has been epitomized by the outsized success of NVDIA, which has seen its share price increase eight-fold over this period. During that time, we have seen NVDIA’s market capitalization increase to over $3.3 trillion as it jostles with Apple for the title of largest company in the US by market capitalization. November saw its inclusion in the Dow Jones Industrial Average. Somewhat ironically, it replaced rival chip maker Intel in the index, surely something that should foretell a tale of caution!
The Long View Beyond the US Election
With less than a week to go to the US Presidential elections the race remains a dead heat. The broader US stock markets do not appear, at least on a surface level, too perturbed by the high degree of uncertainty in the electoral outcome. At time of writing, October 29, 2024, the NASDAQ is up +2.88%, the S&P 500 up +1.22% and the DJI trailing at -0.23% month to date.
AI Brings A New Approach for Managed Futures Investors
Artificial intelligence having captured the investment world’s imagination is facing a crunch moment to prove its worth. Does it do what it claims it does, faster, better, more accurately etc. This is not an unfamiliar issue for us at Plotinus. It is one thing to innovate and create a different way of gaining trading insights by using AI, but ultimately the only relevant question is, does it work. To this end we will look Plotinus’ area of focus, short-term directionality in the futures market and compare it with some established short-term Managed Futures programs.
How to Deal With Asset Management’s Data Future-Proofing Problem
As Investors become more aware of the potential that artificial intelligence has to offer the field of active asset management, they are also coming to recognize the problems that its use can bring.
Seeing the Trees from the Forest — Why Good Investment Decisions Depend on Understanding the Subjectivity of Data
The term “Data Science” can convey a certain glow of empirical purity, distilling understanding from observed facts. This is in many cases, unfortunately not the case. “Data Alchemy” on the other hand would sound much less convincing and would imply that those involved in such wizardry were potentially cooking up their results. The reality of data science though is that even when rigorous scientific analytic methods are applied to data, the data itself for the much part is much more subjective than it is assumed to be — not the objective recording of information one might initially think. From an investment perspective this issue poses a problem for all data-based decisions for the sophisticated investor.
Oh Lá Lá! The French Stock Market Feels the Sting of a Snap Election and What this Reveals About the Complexity of Data.
President Macron certainly put the ‘snap’ in the snap election with his announcement on June 9 of French parliamentary elections, following his centrist party’s hammering in the recent European Parliamentary elections. That snapping sound seemed to reverberate the loudest beyond the political realm, in the French stock market. It is somewhat rare to see such a direct impact of politics on a financial market. The CAC 40 (France’s leading market index), at time of writing, has lost -5% since the president’s announcement. There is a traditional cliché that stock markets do not like uncertainty—traders, however, know that with the injection of uncertainty comes opportunity and error depending on one’s reading of the data at hand.
The Unwitting Revolutionary?
The rain-drenched start outside number 10 Downing Street as Rishi Sunak announced a general election in the UK on July 4th seemed to fittingly parallel the dull prospects for Sunak as he seeks re-election. His Conservative Party is trailing the opposition Labour Party by a gapping 22% according to a voting intention poll conducted by You Gov, the first since the general election announcement on May 22nd.
Troubling Times, Non-Normal Distributions, and Dangerous Assumptions
The recent flaring of tensions in the Middle East, with the escalation to the exchange of direct strikes between Iran and Israel, has provoked the general awareness of geopolitical uncertainty and its potential impact on global markets. This creates an occasion therefore, perhaps, to reflect on the effect of shock-factors on stock markets and the general difficulty when grappling with the analysis of the unexpected.
The Elephant in the Index—Addressing the Allure and Dangers of Over-Concentration
As the S&P 500 finishes its best first quarter performance since 2019, the concentration of the performance of the whole index in just a few stocks has been much noted. In particular its top performing stock, NVDIA with its +82% YTD, has contributed in excess of 5% to the index YTD.
How European Pensions Could Manage Added Risk in Portfolio Exposures in Pursuit of Higher Returns
In our previous commentary. we explored the detrimental impact of the profound change in the underlying population demographics on European pensions. As we observed, the financial engineering error European pension funds made was that they did not properly account for the shrinking population of pension contributors and the growing population of longer living pension recipients. This has left pension funds grappling with the prospect of potential future collapse unless some very serious financial re-engineering is engaged in to fix the problem. And we left off with a suggestion that a solution could come through the addition of AI-driven strategies within the asset allocation mix.
- 1
- 2
- 3
- …
- 8
- Next Page »