AI is already reshaping the way investors research companies, and Michael Taylor believes those who learn to use it effectively can gain a meaningful edge. He looks at how AI can act as a force multiplier for analysing stocks, tracking data and speeding up the research process, particularly in the less efficient corners of the UK market.
Whether you like it or not, we’ve entered a period where things will never be the same. The period before the pandemic, when rates were low, volatility was low, and once-in-a-lifetime events didn’t seem to happen every few years, is over. Since the pandemic, we’ve had:
- Russia’s invasion of Ukraine
- Conflict in the Middle East
- Another Iran war
No doubt there will be something else soon on the horizon: AI, or artificial intelligence, or super intelligence, as we now have to call it, as ordered by President Donald Trump (I will refer to AI as super intelligence for the rest of this article, as I don’t want to be the “enemy”). It’s going to, and already has, changed the world beyond recognition. You don’t have to like it, but you do have to accept it.
I believe that within a few years, deepfakes will be so good, and video will be able to be faked so easily, that we won’t be able to rely on video as proof of anything any more. Already, we are seeing signs of people sending AI pictures and videos to insurance companies to defraud them. That will only get easier and more common.
Only recently, a friend told me his mum had been scammed by Martin Lewis. Obviously, she wasn’t scammed by Martin Lewis. She was scammed by someone pretending to be Martin Lewis. This is something I know only too well because, at one point, I had over 1,000 fake accounts on TikTok, all messaging people every day: trying to get them to invest in some dodgy coin, or to copy my “trades”, or to just lure them into sending money.
In fact, I was on James Smith’s podcast recently and posted a video of this, and someone commented that I was a crypto scammer. This is despite me never having promoted or even talked about crypto, as it’s something I believe should only be a single-digit percentage in anyone’s well-diversified portfolio, if even at all. I don’t hold any crypto myself and find it very irritating to be labelled a crypto scammer, but this is the work of all the fake accounts.
But super intelligence is a force multiplier. It allows me to cover more ground more effectively and far more reliably than anyone not using super intelligence.
For example, spend a few hours with AI and prompt it to ask you questions about your investing style. Go deep here. Tell it all of the things that you look at, all of the things that are important, and all of the little new nuances that you check when reading RNSs. Keep asking it to ask you more questions to complete the task more effectively. If there is a process, it can be cloned, and you can turn this into a skill to run a new stock through.
Yes, you shouldn’t rely on super intelligence, but it will give you an idea of the narrative of the stock, whether the stock met, beat, or failed to meet guidance, look at what management said and what actually happened, as well as significant balance sheet events, and a rundown of earnings.
Essentially, I’m using it to get me up to speed on a stock that I have never looked at in detail or not looked at recently, and then allowing the information provided to give me a view on whether I should spend more time researching the stock.
The UK market is inefficient and illiquid, and that’s unlikely to change any time soon. There aren’t many fund managers who will look at stocks sub-£100 million market cap because they are simply too small to be included. I’ve always believed that this provides the opportunity for those who do the work and take it seriously to get ahead.
Most people who buy small-cap stocks are not hugely sophisticated, nor are they treating it as a business. For the diligent trader and investor, there is now a blue-sky opportunity to use super intelligence as a force multiplier in order to get massively ahead.
Do not sleep on this. Download an AI app onto the desktop and spend a few hours playing with it. You’ll be surprised once you go down the rabbit hole, and for the markets, I’m only just scratching the surface.
For example, one way I’m using it is to collect publicly available data on websites and having AI log it onto a Notion board with a chart so I can see the progression of this data. Most people won’t do this. I’ve gained a slight informational edge.
History has shown that those who change with it reap the rewards. So don’t be a Luddite.
As an aside, I’ve also been nominated for an award, Best Investment Analysis Finfluencer. I’m not really a fan of the word influencer, as it conjures up images of selling suntan lotion and Love Island, but it would be great to win this.
Voting closes Saturday at 23:59!
Michael Taylor
Get Michael’s trade ideas: https://newsletter.buythebullmarket.com/
Free educational content: @shiftingshares
This article is for educational purposes only. It is not a recommendation to buy or sell shares or other investments. Do your own research before buying or selling any investment or seek professional financial advice.
This article is for educational purposes only. It is not a recommendation to buy or sell shares or other investments. Do your own research before buying or selling any investment or seek professional financial advice.
