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Ever wondered if artificial intelligence (AI) can outperform human experts in stock picking?
In this fascinating exercise, we put "Google (AI) Gemini" head-to-head with seasoned fund manager Dr. Don Hamson from Plato Investment Management. Both were tasked with providing their "top five growth and income stocks" for the next 12 months on the ASX. As we reach the end of the fourth week of this "AI vs Humans" experiment, let's take a quick update on the progress to determine the superior stock picker.

First Place - $4,589
# Google Gemini (AI) - RED line on the equity chart

Second Place - $4,170
# Dr. Don Hamson (Expert) - BLUE line on the equity chart

Third Place - $2,556
# Skate - BROWN line on the equity chart






Skate.
 
I'd be interested to know if the AI will provide sell signals?

Say, if one company selected by the AI reports "accounting irregularities" will the AI issue a sell signal?
I'm assuming that the "humans" would apply some commonsense and sell to protect their capital.
 
Skate said:
Experiment Details
Objective: Compare the annual return of five income stocks chosen by each participant.
Rules: Each participant chooses their stocks. Trades cannot be adjusted throughout the year.
Click to expand...



@peter2, the objective of this experiment is to compare the annual return of five income stocks chosen by each participant. The rules relating to "Stock Selection" were laid out in one of my previous posts. To reiterate, each participant is responsible for choosing their own five stocks. Once the five stocks are selected, "trades cannot be adjusted throughout the year".

This means that participants must carefully consider their choices and make informed decisions at the beginning of the experiment since they "will not be able to modify their portfolio composition later on".

By implementing these rules, the experiment aims to assess the performance of participants' income stock selections over a fixed time period, without the ability to make adjustments based on changing market conditions or news events.

Skate.
 
Good morning Skate. Pardon me if you had explained much earlier on how you decided to chose the above stocks for passive div earnings ( maybe from the PE), due to spare time constraints, I am only reading fr this screen currently. Noted that you are trying to test whether
A1, Expert n yourself in which is the expert in this competition.
I noticed that you have 2 financial stocks n the rest is materials. No Retail/Consumers, Why?
 
Rabbithop said:
Good morning Skate. Pardon me if you had explained much earlier on how you decided to chose the above stocks for passive div earnings
Click to expand...

@Rabbithop, my reason for selecting these particular companies was straightforward. I wanted to invest in businesses that I understood and that had a strong presence in the Australian and New Zealand markets. ANZ and CBA are the two largest banks in their respective countries, and BHP and FMG are leaders in the mining industry. WDS an energy company that I believe offers significant value going forward with the potential for strong capital gains.

Rabbithop said:
Noted that you are trying to test whether
A1, Expert n yourself in which is the expert in this competition.
Click to expand...

I recently read a thought-provoking article about an experiment to decide who is the better stock picker. The experiment was about pitting Google's AI, "Gemini", against seasoned fund manager Dr. Don Hamson (the expert) from Plato Investment Management to determine who is the better stock picker.

Both Google Gemini (AI) and Dr. Don Hamson (the expert) were asked, for their top five growth and income stocks for the next 12 months on the ASX200. Total investment value $100k split equally.

As I already had started on my 5-position investment project I decided to throw my hat in the ring too as I'm curious to see how my picks fare against these heavyweights. I used the same 5-positions I had already selected, adhering to the same rules and starting date to have an involvement in the experiment. Originally the experiment was AI vs Human - now it's AI vs Humans and I changed the logo to reflect the change.

Rabbithop said:
I noticed that you have 2 financial stocks n the rest is materials. No Retail/Consumers, Why?
Click to expand...

For the simple reason, retailers and most other half-decent companies have low "Market Capitalisation" compared to the heavyweights of the market. I settled on five companies that met my criteria: ANZ, BHP, CBA, FMG, and WDS. These companies may not be the most exciting, but they are solid, reliable, and have a proven track record of delivering for shareholders.

Skate.
 

Generating a sustainable income from a real investment strategy
From the get-go, this is a genuine investment strategy with real dollars on the line. The objective of this 12-month experiment is to explore the feasibility of deriving a sustainable income from a portfolio of five investments, based on three key principles: (1) Dividends, (2) Franking Credits, and long-term (3) Capital Gains.

2 Unkind positions since being purchased
# BHP = (-$27,375)
# WDS = (-4,989)

After 11 weeks down
# Net Profit = $100,419
# Weekly Average = $9,129









Skate.
 
Last edited:


# Disclaimer - This is a theoretical investment exercise
In this exercise, we put "Google (AI) Gemini" head-to-head with seasoned fund manager Dr. Don Hamson from Plato Investment Management. Both were tasked with providing their "top five growth and income stocks" for the next 12 months on the ASX. As we have reached the end of the fifth week, let's take a quick update on the progress to determine the superior stock picker.

First Place - $3,125
# Google Gemini (AI) - RED line on the equity chart

Second Place - $2,853
# Dr. Don Hamson (Expert) - BLUE line on the equity chart

Third Place - $1,448
# Skate - BROWN line on the equity chart






Skate.
 
i would argue 12 months isn't long enough , but then this is an experiment , and lessons learned ,say,over 5 years wouldn't be implemented quickly enough to harvest any cyclic trends .

it will be interesting to watch the ' resource stocks'( RIO , FMG , BHP and WDS ) and see if the 'resources boom ' is starting to deflate
 
divs4ever said:
i would argue 12 months isn't long enough , but then this is an experiment , and lessons learned ,say,over 5 years wouldn't be implemented quickly enough to harvest any cyclic trends .
Click to expand...

@divs4ever, I believe a 6-month time frame would be sufficient to demonstrate the effectiveness of stock-picking abilities between (AI) and a seasoned fund manager. This short duration would allow for a meaningful trend to emerge, providing a clear picture of who is the better stock picker.

divs4ever said:
it will be interesting to watch the ' resource stocks'( RIO , FMG , BHP and WDS ) and see if the 'resources boom ' is starting to deflate
Click to expand...

@divs4ever, the four resource stocks you mentioned, RIO, FMG, BHP, and WDS, are all major players in the Australian mining industry and all but one (RIO) have been included in my investment portfolio. However, as with any market, they are subject to fluctuations in demand, which can cause prices to expand and contract regularly.

Skate.
 
Why I believe long-term Investing will pay off
I'm convinced that investors can achieve remarkable success by adopting a patient approach and prioritising stability over market timing. By refraining from reacting to short-term price movements, long-term investors can focus on the bigger picture and recognise that consistent growth occurs over extended periods.

When I reflect on the past, it's hard to dispute the effectiveness of this approach, as the market has consistently rewarded those who stayed invested over the long term. Long-term investing isn't about constantly tinkering with your portfolio, but rather striking a balance between staying the course and making necessary adjustments.

For me, investing has involved a significant mindset shift towards valuing dividends and franking credits as a means of generating a sustainable income stream. By maintaining a hands-off approach and weathering the storms, I'm firmly convinced that this income stream will provide the support I need for my desired lifestyle.

Skate.
 

This is a real Investment Account
The objective of this 12-month experiment is to explore the feasibility of deriving a sustainable income from a portfolio of five investments, based on three key principles: (1) Dividends, (2) Franking Credits, and long-term (3) Capital Gains.

After 12 weeks of this experiment
# Dividends and Franking credits = $0.00
# Capital Gains = $95,625
# Weekly Average = $7,969









Skate.
 
Well, Professor May the money Gods shine upon you in this investment challenge.
 
farmerge said:
Well, Professor May the money Gods shine upon you in this investment challenge.
Click to expand...

@farmerge, I appreciate your kind words.
This investment account is a "real real-life experiment" aimed at exploring the potential of deriving a sustainable income from a portfolio of just five investments.

Footnote: While dividends can offer consistent income, franking credits and capital gains have the potential to significantly enhance the profitability of any investment portfolio.

Skate.
 


# Disclaimer - This is a theoretical investment exercise
In this exercise, we put "Google (AI) Gemini" head-to-head with seasoned fund manager Dr. Don Hamson from Plato Investment Management. Both were tasked with providing their "top five growth and income stocks" for the next 12 months on the ASX.

First Place - $4,419
# Google Gemini (AI) - RED line on the equity chart

Second Place - $1,695
# Dr. Don Hamson (Expert) - BLUE line on the equity chart

Third Place - $1,206
# Skate - BROWN line on the equity chart






Skate.
 


This is a real Investment Account
The objective of this 12-month experiment is to explore the feasibility of deriving a sustainable income from a portfolio of five investments, based on three key principles: (1) Dividends, (2) Franking Credits, and long-term (3) Capital Gains.

After 13 weeks of this experiment
# Dividends and Franking credits = $0.00
# Capital Gains = $101,674
# Weekly Average = $7,821





Skate.
 
suggestions for refinements if you keep this strategy going for more than 12 months

you have managed 12 weeks ( 13 actually ) without any div. income , so how about a 3 monthly payer or a new stock that pays divs out of cycle to the current 5 stocks with any new cash injection ( either by new investment or via reinvested divs , since your 5 current selections are unlikely to be taken over this year )

nice to see you are still in capital gains
 
Any process needs a feedback loop:
For investment a comparison.
I started a brand new self invest super from 20/12 onwards...after the Christmas rally
So after 3 months, I looked what the asx200 did from 20/12/2023 to tonight:
An increase of 4%.
My own selection, not yet fully invested, with staggered entries and comprising O/S exposure and PM ended up 3%+.
Sadly underperformed but performed nevertheless which is not too bad for my inexperienced approach
I am a bit worried with Mr @Skate portfolio, which actually went backward over the same period.
I understand this is just 3 months but still, not a negligible duration, with asx200 reaching ATH.
How do you integrate a feedback loop, to know when to cut losses?
Or revert to one or a couple of index etfs...
Just food for thoughts
 

@divs4ever, this real-life 12-month investment exercise is to assess the feasibility of generating a sustainable, passive income through dividends and franking credits from a portfolio consisting solely of five stocks. Any capital gains realised during this period are merely an added bonus.

I've done some calculations and estimate that the dividends from my 4 positions (BHP, CBA, FMG and WDS) should be $51,378. I plan to reinvest these dividends into WDS, which has a strong track record of paying consistent dividends and has the potential to increase its payouts over time.

I'm excited to see how this exercise will play out and whether it will be possible to achieve my objective of creating a liveable wage through this investment strategy.

Skate.
 

@qldfrog, thank you for your input. The principles guiding my investment strategy are simple and straightforward. The plan is to invest in five companies known for their consistent dividend payouts and franking credits.

Regrettably, selling any position during the 12-month exercise does not align with the strategy. The idea for me is to "lay back", relax, and let the investment portfolio work its magic. It couldn’t be simpler than that. Let’s see how it goes!


Skate.
 
Skate said:
I plan to reinvest these dividends into WDS, which has a strong track record of paying consistent dividends and has the potential to increase its payouts over time.
Click to expand...

that is not the WPL i remember ( i have help WPL/WDS for several years now

add to that it needs to integrate the BHP assets , doubling one's size in a single hit is very hard to do

also as i discovered in 2020 div. returns are not always certain even when a share goes ex-div

but let's see how the first 12 months go , and tweak if needed
 
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