Combining machines and humans in investing- An analyst from the (near?) future

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Neil Dwane (Allianz) |  The Machine will be better at seeing patterns:

  • Seeing a pattern in the combination of stock prices and commodity prices, and recommending trades to exploit this.
  • Monitoring satellite imagery of tankers and finding a pattern between oil prices in different regions reflective of local supply and demand.
  • Monitoring all company filing documents and earnings transcripts to pick up cautious tones, new risk disclosures and inconsistencies in management teams’ messages.
  • Following all the commentary and estimates of Street analysts to pick up contradiction in sentiment to better understand how companies are doing.

The human will be better at understanding change:

  • Evaluating the impact of a new drilling technology on the industry.
  • Understanding changing geopolitics and implications for oil cartels’ policies and pricing.
  • Evaluating a change in a company’s strategy or a proposed merger.
  • Understanding changes in the industry structure or changes in the relationships between energy companies and their suppliers or customers.
  • Accepting what machines are better at and refocusing skill set and investment focus!

*Photo by kjetikor on / CC BY-NC

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.