Artificial Intelligence Investment Management | AFIRI ™
What led to AFIRI, Artificial Intelligence Investment Management?
We were skeptical about if and how AI can help fundamental investment.
It works best as a short term trading tool. Trading is relatively simple, and it has a substantial price orientation. However, fundamental investing is more complicated.
Meanwhile, we developed a machine learning test program as part of hands-on technology research to get more in-depth insight into investment. It was minimal at the start and evolved gradually. Our extensive experience in fundamental analysis has helped.
An artificial intelligence investment management tool is not a generalized tool. AFIRI ™ is a personalized & custom fundamental research candidate shortlisting tool. It narrows down the list of companies according to a manager’s specific style.
There are a couple of challenges for fundamental investors. One is the availability of time and resources. It is limited, making it necessary to apply a smart shortcut. However, since decades ago, it has not evolved much at the fundamental buy-side due to a siloed functional organizational structure.
Second is the variability of research quality. It increases as the number of points of research input increases. Familiarity and experience help reduce it, but it does not diminish the structual nature. When scaling or turnover is needed, the issue emerges.
Moreover, these two elements are in inverse relationships.
It is fair to think that sourcing coherent shortlisted ideas has a structual challenge. AFIRI ™ is the first data-driven, but a personalized approach to raising research productivity for an investment manager. The benefit is to increase efficiency and to maintain consistency between the manager’s process and the shortlist. AFIRI ™ is a small step forward, but we believe this is the right direction.