Today Elon Musk, our lord and savior, made a surprise announcement during Tesla‘s earnings call – they’re actually turning a profit! In fact, with $1.86 earnings per share (beating analysts and everyone else’s expectations, really), Tesla’s stock price is up over 20% today in after-hours trading to a whopping $304-ish per share price, which is nice because Mr Musk basically just paid for my next Tesla. Or my kid’s stupidly expensive college tuition, more likely.
Or did he? I love that Tesla is turning a profit. I love Tesla and Elon. But I’m torn – is the new stock price of $300-ish going to fall, stay stagnant, or rise? Of course this is THE most basic question in stock market trading – is my stock gonna go up, go down, or stay pretty flat?
Stock performances predicted by machine learning – if you’re rich.
But here’s the thing: several large hedge funds have AI systems that are getting really good at predicting stock performances. In fact, funds like Renaissance Technologies and D.E. Shaw Group are managed by a bunch of math nerds who live and breathe machine learning and artificial intelligence. And that’s why they are one of the highest performing funds in the world as of the time of this writing (do your own research on this before you invest in anything, please!). Go read up on these guys, it’s pretty amazing stuff.
I imagine not just these hedge funds have the AI advantage. My bet is that virtually all the big traders offer their prime customers ($$$$$) data insights and predictions that nobody else gets. I don’t know for sure because I don’t qualify for the Million Dollar club yet.
So that’s awesome for the rich who can cozy up to the big wigs at those fancy firms and throw millions at each other. They got data that really helps everyone’s bottom line.
Stock predictions for the Middle Class?
But what about you and me? If you have a few million bucks to qualify for being a high value investor with these guys, maybe you can share some of the secrets you’re paying to get from these guys. If you’re NOT a rich person, but have substantial investments in stocks in hopes of paying for your kid’s tuition or your retirement, then welcome to the club.
So for you and me and our kids then – how can WE get information like this? Let’s take Tesla. Its stock saw about a 20% boost today. Depending on how many Tesla stocks you own, you may have turned quite a profit today – on paper. Now, are you gonna sell and cash in? Or are you gonna wait and see if Tesla’s $300-per share turns into $800-per-share in the next 10 years. I personally want to believe Tesla can – but that’s my believe. And what I want to happen is not necessarily what’s statistically likely to happen.
But beyond statistics, and using simple comparative data from other companies, Renaissance’s AI goes much, much deeper. It can check the general industry a stock is in, how it’s doing, what tertiary factors might influence the stock price, and all sorts of crazy stuff that the nerd overlords of these types of AI-driven funds can come up with.
But how can you and I get this kind of data? Is it fair that only the rich get a leg up like that? I’d love to know if not selling my Tesla stock today means I’ll be able to pay for my kid’s tuition in 15 years with it, or if we’re gonna lose it all and he gets to work a shitty minimum wage job while still in High School because we bet on the wrong stock market horses over the long term. See what I mean?
If you DO know of a way to access AI-driven information to mortals who don’t make 7 figures a year and play golf with the elite, chime in here. Like, today.