Artificial intelligence is increasingly used by asset managers to help assess risk and make portfolio choices. And there’s at least one institutional investor who believes he’s hit on a model that can routinely beat benchmark indices.
Doug Clinton, managing partner at Deepwater Asset Management, is embracing what the late Charlie Munger called “sit on your ass investing.”
Minneapolis-based Deepwater launched Intelligent Alpha in 2022 using generative AI (GenAI) models to seek long-term investments fueled only by fundamental business performance.
Clinton says this new approach uses a “committee” of generative AI systems. They include ChatGPT, Bard and Claude. Each system avoids “emotional mania buying and panic selling.”
Essentially, the model cuts out all the noise that might drive short-term equity performance, Clinton explains. And, just like Warren Buffett and Munger, it selects good companies and sits on them.
“Instead of trying to harness AI's ...