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Reason I posted was I something I came across on another site where somebody wondered if retail investors using AI might be helping stoke the overheated market. Dunno. Lots of other factors. Managed futures etfs are hot now. The ones I’m familiar with seem to chase momentum across many different assets (stocks, currencies, bonds, commodities, etc.) Supposedly they protect to some extent in down markets by running in reverse! AI would seem tailor made for these types of strategies. I’d imagine it’s used a lot by those managers.
Overall Accuracy: Studies indicate that AI search engines provide incorrect answers over 60% of the time.
Best Performing Model: The most accurate AI model, Perplexity AI, still has a 37% error rate.
Worst Performing Model: Elon Musk's Grok 3 chatbot has been reported to be wrong 94% of the time.
Specific Findings
AI Overviews: A survey found that 75% of users experienced significant issues with AI-generated summaries, with 42.1% reporting inaccuracies.
Trust Levels: Only 8.5% of users always trust AI-generated content, while 21% never trust it.
Implications
Bias and Misinformation: AI systems can perpetuate biases and misinformation, leading to potentially harmful consequences in critical areas like healthcare and legal judgments.
Need for Verification: Users are encouraged to verify AI-generated information due to the high likelihood of inaccuracies.
Thank you very much for that, @Derf. Looks like we wont have to worry about 100% accuracy in my lifetime.
How much of that error stems from poor questioning input, however? There is a direct impact in the outcome based on the quality of the input questioning. Apparently, the simple expedient of asking AI to verify its own answers can catch a lot of the errors.
How much of that error stems from poor questioning input, however? There is a direct impact in the outcome based on the quality of the input questioning. Apparently, the simple expedient of asking AI to verify its own answers can catch a lot of the errors.
"Poor questioning input" was the problem even before AI. lol
That's pretty interesting. Looking ahead, let's propose that the bugs get worked out of AI, and a basically reliable information source becomes widely available to almost anyone. What sort of impact would that have on financial markets?
OJ, I always thought that once the average person had access to the WWW, they would become more formidable intellectually.
If you think too much about this it can drive you nuts. OK, so above I asked about the accuracy of AI answers, and the response, from some type of AI, was "not so good".
The thing is, how do we know what the accuracy is of the answer that I received? What if that answer has only a 50/50 chance of being right?
I think you could probably do it either way; it is, after all, a discussion you're engaging in, but I have no first-hand knowledge to back that up. Clearly, the more efficient way would be to include all the required clarifications prior to making the initial inquiry in order to elicit a more reliable response. The key point is that there is an element of skill involved in generating the inquiries optimally.
If you think too much about this it can drive you nuts. OK, so above I asked about the accuracy of AI answers, and the response, from some type of AI, was "not so good".
The thing is, how do we know what the accuracy is of the answer that I received? What if that answer has only a 50/50 chance of being right?
OTOH, if all you’re trying to do (in momentum investing) is buy what’s going up and sell (or go short) whatever is falling, AI wouldn’t really need to be very intelligent. Just able to comprehend more market components, digest it all and recommend (or place) buy & sell orders a lot faster than humans can. That’s not asking a lot.
@hank- Which sort of takes us back to my original question- if a great number of gamblers investors are all doing that at the same time, won't that have a significant distortion effect on the markets?
As another means of generating ideas, it can be useful. After all, that is what all inquiries should be about, generating ideas. And perhaps generating more questions.
If one is looking for "answers" that solve problems or end discussions, maybe people are expecting too much. Most of the ideas that I get, and pursue, are frequently triggered from marginally related topics/discussions.
@hank- Which sort of takes us back to my original question- if a great number of gamblers investors are all doing that at the same time, won't that have a significant distortion effect on the markets?
That is a great question. Maybe what AI is currently doing is accelerating that effect? Speeding up something that has always been occurring? Artificially removing a component of doubt?
@hank- Which sort of takes us back to my original question- if a great number of gamblers investors are all doing that at the same time, won't that have a significant distortion effect on the markets?
Yes. That’s my concern. Unless there are multiple AI’s with different intelligence levels and different investment preferences then everybody following AI would be buying and selling the same things around the same time. I fear we are moving closer to that situation. What % of market trades are now computer generated? Must be a significant percentage.
Another question. What % of market trades are now computer generated? Must be a significant percentage.
I use my PC for info before buying & selling funds, so would that count as PC generated.
Or would logarithms only be considered?
I just asked google what the best MF buy would be at this time considering up & down side, Replied, nobody knows that answer. Funny it didn't mention AI trading taking place daily! Guessing that is stocks mostly.
@Derf, Google AI says that HFT trades are almost 50% of US trading.
HFT trading is algo-trading with hundreds of simultaneous trades and with trade intervals measured in milliseconds. If you can do that on your PC, then you are in the club, but are likely not (-:).
It seems to me that HFT is similar to the fellow who had bank rounding fractions deployed into his own accounts. Siphoning off small amounts of numerous transactions. Except, apparently legal, in the case of HFT.
In a way, less sophisticated traders are being milked a little at a time. It seems like an unfair advantage or trading practice, when viewed in that light. PT Barnum would be impressed.
Thanks @Yogi for the statistic. It’s humbling to know that when I buy a few shares of this or that I’m competing against all those robots ”with trade intervals measured in milliseconds.” I’ll try to work faster.
I think of an AI like Perplexity as a better search engine without so many ads--yet. All it does is scrape the internet.
Ten years ago few would have thought of searching google for the best mutual fund to buy right now, or, what is the cure for cluster headaches?
If I ask Perplexity a question like: What is the success rate of low cost mutual funds? Or, are there any new developments in cluster headache research? I get interesting summaries and good links to follow up.
So I asked Perplexity for good mutual funds to buy during a government shutdown. Am I interested in Perplexitie's answer? Neigh, I click on the sources tab to see which sites it relied on for its answer. This link should take you there.
BTW, I am not really interested in buying a fund for the shutdown; I am curious what other people are saying.
Comments
General Accuracy Rates
Overall Accuracy: Studies indicate that AI search engines provide incorrect answers over 60% of the time.
Best Performing Model: The most accurate AI model, Perplexity AI, still has a 37% error rate.
Worst Performing Model: Elon Musk's Grok 3 chatbot has been reported to be wrong 94% of the time.
Specific Findings
AI Overviews: A survey found that 75% of users experienced significant issues with AI-generated summaries, with 42.1% reporting inaccuracies.
Trust Levels: Only 8.5% of users always trust AI-generated content, while 21% never trust it.
Implications
Bias and Misinformation: AI systems can perpetuate biases and misinformation, leading to potentially harmful consequences in critical areas like healthcare and legal judgments.
Need for Verification: Users are encouraged to verify AI-generated information due to the high likelihood of inaccuracies.
Thank you very much for that, @Derf. Looks like we wont have to worry about 100% accuracy in my lifetime.
Hence the phrase, "Ask a stupid question...".
We have all seen how that turned out.
The thing is, how do we know what the accuracy is of the answer that I received? What if that answer has only a 50/50 chance of being right?
gamblersinvestors are all doing that at the same time, won't that have a significant distortion effect on the markets?If one is looking for "answers" that solve problems or end discussions, maybe people are expecting too much. Most of the ideas that I get, and pursue, are frequently triggered from marginally related topics/discussions.
I use my PC for info before buying & selling funds, so would that count as PC generated.
Or would logarithms only be considered?
I just asked google what the best MF buy would be at this time considering up & down side, Replied, nobody knows that answer. Funny it didn't mention AI trading taking place daily! Guessing that is stocks mostly.
Back to the game!
HFT trading is algo-trading with hundreds of simultaneous trades and with trade intervals measured in milliseconds. If you can do that on your PC, then you are in the club, but are likely not (-:).
In a way, less sophisticated traders are being milked a little at a time. It seems like an unfair advantage or trading practice, when viewed in that light. PT Barnum would be impressed.
Ten years ago few would have thought of searching google for the best mutual fund to buy right now, or, what is the cure for cluster headaches?
If I ask Perplexity a question like: What is the success rate of low cost mutual funds? Or, are there any new developments in cluster headache research? I get interesting summaries and good links to follow up.
So I asked Perplexity for good mutual funds to buy during a government shutdown. Am I interested in Perplexitie's answer? Neigh, I click on the sources tab to see which sites it relied on for its answer. This link should take you there.
BTW, I am not really interested in buying a fund for the shutdown; I am curious what other people are saying.