Practical Applications of Artificial Intelligence and Value Investing

Practical Applications Summary

In Artificial Intelligence and Value Investing, from the Spring 2018 issue of The Journal of Investing, author Korok Ray (an associate professor of accounting at Texas A&M) explores the possibilities of utilizing artificial intelligence (AI) as both the primary theoretical apparatus for data processing and as a reasoning agent for value investing. He describes the particular kinds of advancements needed in the AI field to perform classic value-style investing and briefly considers the long-term consequences of its use on the efficiency of capital markets. Ray explores the application of AI to value investing first by defining how AI functions, then by examining AI through three domains: searching, learning, and reasoning. Ray also advocates for cooperation between the fields of finance and computer science and urges the investing community to embrace, rather than resist, the application of AI.

TOPICS: Big data/machine learning, fundamental equity analysis