Value investors are often very curious people. We at valueDACH are also curious about what happens on the stock exchange outside “our universe”. Because we all fish at the same pond – the market. In order to come home from there with attractive prey, it can be helpful to fish in the right places. In order to find these, it is important to understand which strategies others use to fish. In other words, it is worth understanding which strategies other players in the market use to make money. This is also the way to understand the mechanisms by which they influence the market. So, you learn and perhaps even find particularly attractive hunting grounds.
It becomes particularly exciting for us when value investors begin to use other methods for themselves and also to improve their value investing methodology. In concrete terms, this is the case with the Frankfurt Value Investors of ACATIS. ACATIS has been working for quite some time on making artificial intelligence usable for themselves. How exactly does ACATIS use artificial intelligence?
The ACATIS AI BUZZ US Equities – Artificial Intelligence for Sentiment Investment
An example that has nothing to do with “value at all” is the ACATIS AI BUZZ US Equities. This fund evaluates data from various online sources and makes it usable with the help of artificial intelligence: A sentiment – i.e. a mood picture – is formed from the data for several hundred individual stocks. The shares with the best mood are bought from the pool of individual stocks.
The fund is mainly restricted to the North American market. This market provides the most productive data basis. Data sources for the analysis include forums, twitter, Seeking Alpha, blogs and publications with a wide reach, such as the Wall Street Journal, Bloomberg and the New York Times.
StockTwits and twitter in particular make an important contribution to creating the sentiment (if you only use twitter a little, you can get an impression of how the discourse works there with our lists). In this video, Stefan Riße from ACATIS gives us further insight into the fund and how it works:
Report from the Workshop: 4th NextGen AI Aware Event
This recording of the 4th NextGen AI Aware Event provides an even deeper insight into the use of artificial intelligence at ACATIS. From 13:25 Jamie Wise from Periscope Capital talks about the AI BUZZ Fund. Before that, Dr. Hendrik Leber discusses the use of artificial intelligence in more detail:
Here it becomes clear in which way ACATIS uses artificial intelligence: It helps analysts to select individual stocks from a large amounts of stock market data. It is also used autonomously in some funds, such as the ACATIS AI BUZZ US Equities. There AI creates a portfolio itself. In the video from 11:16 on, you can find out which funds are already active alongside the BUZZ Fund and how these funds have performed.
We were also impressed by the explosion of data volumes on twitter and StockTwits, which favored the creation of the BUZZ Fund. Due to the rapid growth, the number of companies for which a sentiment can be formed has increased from 50 to 350. This trend is likely to continue.
Which aspect of the use of artificial intelligence has left a particularly strong impression on you? Let us know in the comments.
Please also note our disclaimer for this article. The author of this article has no interest in ACATIS AI BUZZ US Equities.