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Week 20 of 2024- W202024

May 20, 2024 - theaiunderwriter.substack.com
The blog post discusses various topics related to artificial intelligence (AI), machine learning (ML), and financial analysis. The author shares his views on how AI is changing management and its potential in predicting stock prices. A study is mentioned where an AI model outperformed human analysts in predicting 12-month-ahead stock prices. The model was trained using financial statement data and historical stock prices. However, the author also emphasizes that human intuition and qualitative analysis still play a crucial role as AI lacks critical thinking and nuanced understanding.

The post also includes a reading list from the Hugging Face co-founder and shares news about various topics such as the exploitation of the ETH blockchain bug by MIT students, the use of drones by NYPD as first responders, and the growth of Waymo robotaxis. The author also shares his favorite AI and ML books and adds a new book by Chip Huyen to his reading list.

Key takeaways:

  • The AI model developed for predicting 12-month-ahead stock prices outperformed human analysts, demonstrating the potential of AI in financial forecasting.
  • The AI model was particularly aligned with human analysts for firms with higher levels of cash, capital expenditures, and stock price volatility on the day of the forecast.
  • Despite the AI model's efficiency and accuracy, human intuition and qualitative analysis still play a crucial role in financial forecasting as AI lacks critical thinking and nuanced understanding.
  • The author shared an AI and ML reading list, including a new book by Chip Huyen and another book by Raschka.
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