We are often asked about the origins of our firm’s name. What connection could a philosopher of antiquity have with artificial intelligence decision-based trading?
Economic nationalism worldwide will favor ongoing strength in US-traded stocks, as global investors shift their attention to the most stable economies, argues a new white paper by Plotinus Asset Management. The US is the most sensible opportunity amid geopolitical uncertainty.
From a US financial perspective, the month of July was a tale of two numbers. The S&P 500TR produced the first month-end positive return of the year at 2.48% and GDP growth figures for the second quarter hit an astounding low of -32.9% annualized. This appears to leave the investor with a deep markets/economy dichotomy.
Plotinus has cause for celebration. In June, our firm entered into its third year of using AI decision-based trading. It has been very encouraging to see the power of our technology prove itself in US equities against both the market benchmark and the competition.
The S&P 500 spent the first half of the month in negative territory, followed by a second half rally, which saw it breach the symbolic 3000 mark and eventually leave it behind. The S&P 500 ended the month -10% down from its all-time, pre-coronavirus high on February 19th and +36% up from its March 23rd low.
The residue of the Covid-19 shock to the economies of the world is extreme uncertainty. The US equities market saw a tremendous recovery in April, but this bounce back has done little to allay underlying investor fears going forward.
It may not have been the usual variety but there was March Madness a plenty as world markets heaved, lurched and vomited in anticipation, fear and finally the arrival of the coronavirus. With sanity departed and fear ruling the day, anything verging on logical reasoning must be gently proposed in case it gets dismissed into a looney bin of truly unmentionables. Such toxicity – by mere association (even at a safe social distance of 2m or more) would pollute and taint even the tamest reasonable thought.
February saw stellar heights in US equities get decimated in a highly accelerated plunge that ended up wiping -12.76% off the S&P500, bringing it back down to levels not seen since early October.
The Ancient Mariner would be strangely at home, or rather adrift in our current world of data overfill.
Humans have the potential to allow their foolishness to let them drown in data. It is a little like when confronted with what appears to be sensible logic (at least on the surface) for instance with quantifiable data, humans have an innate desire to meet this with irrational logic.
With the dawn of a new decade there is always speculation as to what influences will define that decade. Some may argue that the 2010s was the decade of data and social media. What will define the socio-cultural zeitgeist of the 2020s that in turn will be measured by its global impact? Will it be AI?