“AI That Picks Stocks Better Than the Pros” – and then what?

June 15, 2010

Chi squareOut there at Technology Review I found this article about an “AI” (you may raise your eyebrows here) which is supposed to better in stock-market speculations than actual humans. For a brief introduction let me quote TR:

It’s called the Arizona Financial Text system, or AZFinText, and it works by ingesting large quantities of financial news stories (in initial tests, from Yahoo Finance) along with minute-by-minute stock price data, and then using the former to figure out how to predict the latter. Then it buys, or shorts, every stock it believes will move more than 1% of its current price in the next 20 minutes – and it never holds a stock for longer.

TR points out, that analyses similar to the described algorithm exists since the 90ies. However, the new systems doesn’t actually parse all the data, but concentrates on some keywords which seem to be of relevance.

I see two very odd flaws there.

  1. A good AI predicting the stock-market based on human-written text – which could be technically used by *anyone* who could afford it – would lead to a situation where stocks keep heating up. Speculation will grow rapidly and positive feedback loops will possibly run into an overdrive situation. I wouldn’t opt in for a ban on such a software but on full disclosure if this software was used on a certain bid. This could help in debugging situations and to give legislators something to think off when the shit already hit the fan.
  2. If the algorithm actually concentrates on keywords in context rather than in the whole analysis of the text, I bet a fiver that it wouldn’t even take a few weeks until some clever consulting company analyzed the algorithm and makes up a process how to tweak your fiscal reports so that AZFinText favours this text. Think of the stock-market equivalent of a Google bomb.

Nobody in Technology Review’s forum seems to be worried about the real-life implications… I think I’m just pointing out the obvious and that the stock-market professionals already made up their own ideas.


U.S. Bankruptcy Court approves SGI’s reorganization-plans

September 19, 2006

SGI LogoVia #sgi@ircnet:

“SGI today announced that its Plan of Reorganization has received judicial confirmation, setting the stage for the company’s emergence from Chapter 11 in October 2006.

At today’s hearing, Judge Burton Lifland ruled that all the necessary requirements have been met for SGI to implement its Plan of Reorganization. Every voting class of creditors voted overwhelmingly in favor of the plan.”

More corporate blabla in SGI’s newsroom.

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Cray Inc. Reports 2006 Second Quarter Financial Results

August 8, 2006

Cray Inc.Cray Inc.’s quarterly financial results are finally available on their homepage.

News in short:

“Total revenue for the quarter was $38.5 million compared to $53.4 million in the same period of the prior year. Net loss for the quarter improved year-over-year to ($7.2 million) or ($0.32) per share compared to ($23.8 million) or ($1.08) per share in the second quarter of 2005. Cray reported total gross margin of 32.5 percent for the second quarter of 2006, a significant improvement compared to 8.8 percent in the prior year period. Product margin, which improved to 26.6 percent, was the principal driver. Service gross margin of 43.0 percent for the quarter was in line with the prior year.”

The New York Stock-Exchange doesn’t seem to like Cray very much although Cray was able to narrow their losses and decrease expenses; at the time of this writing (15:31 GMT) CRAY was down by 4.08%.

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Q2 2006 Cray Earnings Conference Call

August 6, 2006

Cray Inc.Cray will present their quarterly earnings in a web-cast tomorrow at 5:00 p.m. ET / 2:00 p.m. PT / 21:00 UTC.

Could be interesting ’cause i really like to know how SGI’s chapter-11 bankruptcy affects their business.

Link to web-cast: Q2 2006 Cray Earnings Conference Call

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SGI: Chapter 11 disclosure statement approved by US Bankruptcy Court

August 1, 2006

SGI LogoVia Supercomputing Online:

The US Bankruptcy Court approved SGI’s Disclosure statement, paving the way for a Chapter 11 reorganization of the company.

The way is now open for a fresh and clean financial start. Let’s see how SGI will manage it; sharp tongues comment SGI’s effort with “heh, suvived again, did it; they must be getting good at it. uh, oh… woops, saved!”.

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