I Know First Weekly Review Algorithmic Performance: June 10, 2019

I Know First Weekly Newsletter
Investment Selection Using AI Predictive Algorithm
June 10, 2019

This Week’s Top Article:
Keep Calm & Trust Your Data:
AI And Stock Market Irrationality

Read More | Related News

This Week’s Top Stock Prediction:
Stunning Returns By Best Dividend Paying Stocks Based on AI 
24.09% Return | 3 Days

This Week’s Highlights







Keep Calm & Trust Your Data: AI And Stock Market Irrationality
One of the most common themes you find in many mythologies across the globe is that of order and chaos. The world as we know it, in all its orderly (or at least more orderly than not) glory, is emerging from the state of complete and utter entropy. This can be seen as a metaphor for many things, from organic life coming into existence in the primordial broth to the way the first humans explored their environment, rationalizing their experiences in ways that made sense in the existing system of knowledge. Rationalizing is the keyword here: it does not take a stretch of the imagination to view this post-chaos world as being the rational one, the one that makes sense, while its pre-chaos version would be absolutely irrational.

Interestingly, a similar theme of rationality versus irrationality can be noted in the modern debate on what makes the stock markets behave the way they do. Here, rationality is one of the assumptions at the core of the Efficient Market Hypothesis (EMH). In the irrational corner, in the meantime, is the discipline of behavioral finance. So what does this debate mean for investors themselves? We will take on this question, but first, let us take a quick step back and look at what is implied in rationality and the lack thereof, just for the sake of more clarity in the discussion.
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IAC/InterActiveCorp Stock Predictions: Swipe Right
IAC is a holding company that owns more than 20 operating businesses comprising over 150 brands – this includes Match Group which owns Tinder, the world’s largest online dating platform. For Match Group as of March 31, 2019, IAC’s economic interest was 80.4% and IAC’s voting interest was 97.5%. Tinder and other dating platforms are benefiting from tailwinds and have a massive runway of growth ahead. All of IAC’s other brands, many of which also have exciting upside, provide optionality at a reasonable price. IAC’s stake in Tinder is starting to look a lot like Nasper’s legendary bet on Tencent.

The elegant simplicity and outstanding economics of Match Group’s business is reflected in not only impressive revenue growth, but also earnings and free cash flow growth – much like Facebook. But unlike Facebook, most revenue is more stable as it flows from subscriptions rather than ads. Tinder and all other mobile-based dating platforms are benefiting from secular tailwinds thanks to the proliferation of smart phones and cheaper and unlimited mobile data.
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AI In Finance Industry: The Future Is Today
Today’s AIs fundamentally deal with two tasks: prediction and classification. In the former case, we are talking about trying to predict something (normally, a numeric value), be it a price of a house or a sports team’s total points at the end of the season, based on the data that we already have. In the latter scenario, the AI is trying to allocate an object to a certain category based on its known properties. An AI that is well versed in telling cats from anything that is not a cat, for example, would be happy to go through all the pictures on your phone and find all those that have cats in it.

Now, these two basic tasks may not sound like too much, but the opportunities they are opening for scores and scores of ambitious FinTech initiatives are indeed almost limitless. Read more to find out how AI can be used for finance fraud prevention, to calculate credit risk, to optimize wealth management, and to predict stock markets. 
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Stock Forecast Evaluation Report For US Stock Market – Significantly Beating S&P 500 Index
In this stock forecast evaluation report, we will examine the performance of the forecasts generated by the I Know First AI Algorithm for the US stock market and sent to our customers on a daily basis. Our analysis covers time period from January 1, 2019 to May 23, 2019. We will start with an introduction to our stock picking and bench-marking methods and then apply it to the stock universe of the S&P 500 index as well as all of the stocks covered by us in the “S&P 500 Companies” Package. This stock forecast evaluation is part of our continuous studies of live I Know First’s AI predictive algorithm performance. 

We found that the Top 5 signals provided the most predictable stocks with a return of 10.42% in a 3-month investment horizon, beating the benchmark by 1.61%. There was also a clear correlation between increasing time horizons and investment return. Overall, the benchmark was over-performed in the top 10 and 5 signal classes.
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Will Artificial Intelligence Technology Steal Your Job?
Despite predictions of growth spurred by AI technology, many people are wary. For instance, a survey by Pew Research found that Americans are twice as likely to express worry (72%) than enthusiasm (33%) about a future in which robots and computers are capable of doing many jobs currently done by humans. The Financial Services Industry has already begun to undergo a revolutionary transformation due to AI, exemplifying how AI will affect the labor force as a whole. 

Within finance, the quantity of information is vast, so decision making is difficult. Fund managers and financial advisers must make crucial qualitative conclusions by sifting through an abundance quantitative data. AI reduces the cost of this prediction by helping with forecasting and planning. For example, Accenture’s patented ZB x AI platform uses AI and machine learning to categorize financial transactions for instant spend analysis. Consequently, analysts can spend less time gathering information, and more studying and assessing the implications of various decisions.
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Dear Readers,

Here at I Know First we put a lot into the content we provide to our subscribers to keep you guys up to date on everything happening in the markets and demonstrate the accuracy of our Daily Market Forecasts. Thus, whenever our hard work is recognized and one of our articles or our company is featured in an article, we are always very proud of our analysts and the company as a whole. 

This has been a phenomenal week in terms of features with shoutouts from multiple media outlets. I Know First was featured in a Finance Magnates article about how algorithmic trading will dominate the industry within 10 years. Additionally, our currency forecasts were highlighted by Daily Forex an an article about how AI is shaping ForEx trading. On top of that, I Know First was featured in a Forbes article. In the article, the integration of artificial intelligence in hedge funds strategy is analyzed, using as an example the Aidyia case. I Know First’s article was featured as a reference of what are hedge funds, their strategy and why AI is useful for them. 

Warmest Regards
Yaron Golgher, Co-Founder and CEO



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