In 1973, Burton Malkiel, a professor at Stanford University in California, stirred controversy by claiming that a blindfolded monkey throwing darts at the pages of a financial newspaper would select a stock portfolio “just as well” as one carefully chosen by experts. The experiment was attempted… and it turned out Malkiel was wrong: The monkeys did even better. 50 years on, the question now is whether or not robots can beat the wolves of Wall Street.
And Stanford has the answer. An article published on Monday, June 9, on the university’s website reported that researchers trained a predictive investment model using market data from 1980 to 1990. They then tasked the model with rebalancing the portfolios of 3,300 US equity mutual funds between 1990 and 2020. The verdict: Artificial intelligence (AI) outperformed 93% of fund managers, delivering results on average six times better.
So it is no surprise that the asset management industry is accelerating its investment in technology. According to Bloomberg, BlackRock revealed on Thursday, June 12, that it had built an AI analyst focused on equities called “Asimov,” after the science fiction writer fascinated by the relationship between humans and robots. “While everyone else is sleeping at night, we have these virtual AI agents that are scanning research notes, company filings, emails, to generate portfolio insights,” explained Rob Goldstein, chief operating officer of the world’s largest asset manager.
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