Stonks There’s no denying that AI hype has been gangbusters for the stock market, even if the whole thing’s a bubble. But how good is AI itself at actually selecting stocks? Two researchers, Gary N. Smith, a professor of Economics at Pomona College, and Sam Wyatt, a student at the college and a project lead at Pomona Consulting, conducted an analysis to find out. Writing in a piece for Scientific American, they argue that “AI-powered investing is particularly interesting because it provides a quantifiable way to assess the abilities of the technology.” And their findings, which are yet to be peer-reviewed, suggest that the abilities are shoddy. Smith and Wyatt looked at every publicly available exchange-traded fund launched since October 2017 that either partly or fully depended on an AI system to make stock decisions — and the vast majority of them performed worse than the S&P 500, an index of 500 of the largest companies listed on the US stock exchange. Tellingly, over half of the funds have since been shuttered. Ill-Fated Investments For some context, the S&P 500 is considered a benchmark of the stock market’s health. If it’s doing well and your fund isn’t, then you’re not cashing in on the gravy train. Thus, you could argue that if out of 43 funds that partly used an AI system to inform stock decisions, only ten managed to do better than the S&P 500, there appear to be some serious shortcomings with the technology. Collectively, the partly AI-driven…AI's Hyped Up Attempts at Picking Stocks Are Completely Faceplanting