AI Update: This Could Change Everything

Keith Fitz-Gerald Dec 06, 2019
26 

I never thought in a million years that I’d be writing to you about artificial intelligence.

The truth is, I’m just not that kind of guy… or at least, I’ve never thought about myself that way.

My columns and the recommendations that go with ’em usually involve compelling stories, great analysis, and huge profit potential. Normally I thrive on discovering opportunities most investors can’t see, let alone imagine.

Only, in this case, it’s my imagination that IS the story.

The work I’m doing could literally change everything, at least when it comes to identifying big profit potential.

Here’s the latest.

Before we go any farther, I owe you a huge THANK YOU.

As you know from prior updates, I’ve been pursuing the use of artificial intelligence to predict the stock markets for more than 30 years now and, frankly, it’s been one heckuva ride.

Commonly held wisdom is that it can’t be done.

I beg to differ.

In fact, saying that something is “impossible” or “has never been done” is like handing me an open invitation to go try it… a personality quirk that drove my Mom right up the proverbial wall when I was younger.

Today, my wife Noriko has taken over that responsibility with aplomb. She just smiles when I get a brain cramp and, on more than one occasion, has handed me a pen and paper at the dinner table, or at the theater, or when we’re out skiing.

She is also unquestionably supportive when I bolt out of bed for the office on an hour’s sleep to get something out of my head, which admittedly happens all too regularly around here!

Most people are stunned by the hours that I keep and the joke around the office is very accurately that if, “Keith’s up, everybody’s up.” It took years, for example, for my publisher, Mike Ward, to believe I actually sleep at all.

Turns out that’s not as unusual as you might think, though.

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Scientists now know that many people – including yours truly – tend to do their best and most creative work when they’re dog-tired and at odd hours because their brains aren’t functioning as efficiently as when they’re rested.

Case in point, I’m actually writing this column at 2:30 a.m., with Led Zeppelin, Jimi Hendrix, and AC/DC cascading through the office sound system and a big pot of my favorite Italian coffee on full brew. That’s a story for another time, though, musical inclinations aside.

Anyway, people a whole lot smarter than me have determined that our brains are apparently less capable of filtering distractions and less able to remember existing connections between data we know well when – you have to read this twice – we can’t think clearly. It’s a pretty cool body of research, pun absolutely intended!

By the way, there’s a great article in Scientific American called “The Inspiration Paradox: Your Best Creative Time Is Not When You Think” if you’d like to read up on how the brain works, why this makes sense and why our brains are such an area of intense research at the moment.

My take is that being tired simply forces us to make new neural connections which, in turn, allows us to see existing data differently and to consider alternative possibilities. Both skills are critical when it comes to lining up huge profits.

That’s why I’ve spent more than a few early morning hours since my last update with my team refining the predictive math we’re using. Effectively, I want to make the computers as tired as I am so that they, too, can think clearly.

The results have been terrific, not to mention surprising.

For example, here’s a data run on the S&P 500 from Monday, November 25th for December 2nd, 2019 as well as the actual close recorded on December 2nd.

You’re not imagining things.

The formulas I’m using to do all this predicted a close of 3,116.55 and the actual close was 3,113.87… a mere 2.68 point difference on where my research suggested the markets would close a week in advance.

I couldn’t help but sit at my desk with my jaw on the floor. Truth be told I came into Monday’s open fully expecting to have to rework the math and figure out how the projections could have been so far off.

Keep in mind that this projection – for a 0.20% change – was made at a time when the markets were in rally mode and the headlines reflected new highs. Traders were looking for the runup to continue.

What they got instead was a gut-wrenching 27.11 point sell-off into the close that brought the S&P 500 within 2.68 points of the projection I’d laid out a week earlier. Why there was a massive selloff doesn’t really matter; that the math “worked” does.

Close enough “for government work” as the old saying goes, eh!

The other thing that stands out is something I call “% accuracy of predicted trend.” That’s an internal statistic we developed to let us know how the model is behaving over longer periods of time including the specific “end” point projection for any given date we run it.

This data point is routinely between 86% and 92% so the reading of 93% in this example is a new record and something I’m watching very closely as you might imagine. I’ve still got to understand why the accuracy jumped like it did because I can’t explain it just yet.

At the same time, we’ve been working “how” to trade information like this most effectively and profitably. I’m exploring longer term investment strategies and shorter term trading tactics alike.

You’d think those things are one and the same but both terms – “effective and profitably” – mean entirely different things from a financial perspective.

I don’t have any specific answers to this conundrum just yet either, but that’s only a matter of time. Much to my wife’s chagrin, it’s also probably quite a bit more coffee, too.

As always, I’m game!

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I suspect you are, too.

Speaking of which, please take a moment to let me know how I’m doing by leaving a comment below.

  • Are updates like this helpful?
  • Interesting?
  • What information would you like to see from me going forward?

As always, thanks for reading along and for your continued encouragement.

Your support means the world to me because it lets me know that I’m no longer doing this on my own. Rather, that I’m operating in the company of like-minded and very savvy investors who want an edge.

A true Total Wealth Family.

Of course, unlocking millions in profit potential isn’t so bad either!

Until next time,

Keith

26 Responses to AI Update: This Could Change Everything

  1. Glenn D Reynolds says:

    Keith, please accept my encouragement to continue your research with your AI system. I look forward to hearing more about it and to joining with you to trade with it. Thank you for sharing with us. Merry Christmas to all of you! Glenn Reynolds

    • Keith says:

      Thank you very much for the kind words, Glenn.

      It’s been a wild ride to date and, honestly, very humbling. Every time I’d think Ihad a breakthough, something would “break.” Now, though, it’s a different story in that we are able to concentrate on what’s working.

      Merry Christmas to you and your family as well.

      Best regards and thnks for being part of the Total Wealth Family, Keith πŸ™‚

  2. Ed Stigall says:

    Yes, you just calibrated your model. Confirm by doing it again in a new time frame and your in business. Keep me posted.

    • Keith says:

      Roger that, Ed.

      Interestingly enough, we’ve also been experimenting on various stocks and Apple was a mere $0.90 off in this week’s run with a 94% rating!! I still can’t explain why but I’m working on that.

      Best regard and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  3. Ira Rigger says:

    Interesting for someone like myself who never accepts the status quo.

    • Keith says:

      I also share a healthy skepticism for the status quo! Thanks for reading along and for the much appreciated feedback, Ira.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  4. robert richardson says:

    I enjoy listening to your ideas. ur dedicated to your work. not many people are. best of luck,please continue to think outloud

    • Keith says:

      Hello Robert and thank you for the kind words. Everybody here places great trust in me and that’s not something I take lightly. My Great-Grandfather, a fighter pilot in WWI, has something to do with that having instilled in me a very simple drive to do one’s best at all times.

      And, will do on the thinking aout loud part!

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  5. Kevin Beck says:

    Keith: You’re doing excellent, as far as I’m concerned. I like that people can think in different ways, and seeing what their conclusions are. I am more interested in the behind-the-scenes stuff that leads to the results than I am in the results themselves. Because by being able to see how things work, I can evaluate the results and see what DOES work.

    • Keith says:

      Hello Kevin and thanks for sharing. I agree, especially when it comes to seeing behind the scenes! To me differences are the similarities that make us all human if that makes sense.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  6. Martin says:

    Dear Keith,

    It’s Martin, remember? The Illy or Lavazza coffee fiend (though I sleep longer than you – and you should work on that to help keep mental acuity in your old age, seriously…).

    I am thrilled to be on board your newsletters, love it. If you could get around to respond to more of our comments (not necessarily this one), that would be great,

    Best regards,

    Martin

    • Keith says:

      Hello Martin! Yes, I recall that we are both coffee fiends and will take your advice on the sleep component. It’s a goal of mine to be sure!

      I deeply appreciate your kind words on my work and will do my very best to respond to comments sooner. I was travelling yesterday and found an unanticipated technical glitch in our website (that’s now apparently been fixed).

      Sorry for lack of reponsiveness. The buck stops with me and I should have found the problem sooner!

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  7. Ron A. says:

    Interesting. Still being off by one strike price can mean the difference between profit or loss.

    • Keith says:

      Very, very well made and articulated, Ron.

      Your point is well taken; and, in fact, something I’m working on. We’re exploring the right strike parameters as a by product of the accuracy and a few other variables as a way of being “right” even when “wrong.” I’ll have more in the months ahead on th is as our research continues.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  8. Rajesh S. says:

    Great work. Keep up the research. Very interesting.

  9. In βˆ†ooby didily Br. says:

    Darn right, we are. Why wait…let’s get a beta going to incentivize closest target group’s deep feedback loop to prove the test run of custom focus for their attention span to say aloft long enough to show results if whatever they want most to see thru. Tiered cutoffs , nominal member numbers and time. The more data they submit for anonymous tracking of any feedback signal, the more info tier maybe they invite to themselves. Can block their identities off in privacy, independent audit w privacy of their membership intact, tx to next gen crypt allowing for this. The independent audit allows for public example to be spread of the educated participation and Goodwill interest building in the reality facing the present tidal wave of rapids and falls and walls ahead. An idea of the nominal gains allows for publishing facts while akso customizing access to specificty of member preferred interests without real-market dimishment loop. Nominal ramping. Member tiers, tansparant and incentivized portfolio data flow. Allows intrinsic human interest/focus to flow thru to your end points of time/money measures for wider distribution of exciteMint.
    Kicking A(alpha) @ K the X Man.
    The multiPLYr man. ( Who else even thinks about doing it for free? X@Β’+Β£Β₯ ) KxX. Little x’s leading to more X’s. Keith been stopping folks from blowing up their own futures and flows and dream streams for many moons. Let’s support one of the best well rounded realest deals in the field. If we can’t trust this guy, who else. Get in line and go with the flow. Let’s go Keith. We ready to GO.

    • Keith says:

      Good afternoon.

      That’s a great and much appreciated idea. As a matter of fact, we have a strategy session with my extended team Wednesday morning and I will be raising this issue.

      Best regards and thanks for being a part of the Total Wealth Family, Keith πŸ™‚

  10. Si Hung says:

    Great Information, great news, the out come very promising.
    I’m very interest.

    • Keith says:

      Thank you, Si!

      I appreciate the trust you place in me as well as the feedback. I will do everything I can to make sure it is well-founded.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  11. Dave De Shon says:

    Keith, I seem always enjoy reading things you have posted. This one really seemed, comfortable relaxed a couple friendly people sitting round talking . I’m still about as dogged by lack if cash to move with as couple years ago but still read an file info I receive thru all these. Would love to get in on your arbitrage works an watched first announcement of it, still have to waite while I guess but will keep placing along till it breaks for me. Thanks for doing what yaare. Dave.

    • Keith says:

      Hello Dave and thanks for continuing to read along. I value your input and your counsel.

      I am trying hard to make sure that Total Wealth is very much a “family” so I am very pleased that you picked up on the tone I used in today’s article!

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  12. Gary Watschke says:

    Hi Keith, As a 70 year old member of the Pass Port Club, I have found your commentary the most helpful in restoring my retirement. If this new adventure works out as well as your past efforts have in helping me, then count me in. My portfolio with you has grown 50% since 12/24/18! Keep up the good work, always travel safely and may you and your family have a Merry Christmas.

    Gary W.

    • Keith says:

      Hello Gary and thanks for the very kind words!

      I am thrilled by what you’ve achieved and honored to play a small part in that. I will do everything I can to ensure your trust in me is well placed and well earned! I’ll keep you posted as my research continues and look forward to your continued feedback as it does.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

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