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My thanks go out to @DaveTrade, @bettamania, and @dyna for showing interest in a discussion between friends on how to invest $100k over 12 months.

Trading vs. Term Deposit
While some view trading and investing as gambling, I believe in the potential of trading a limited number of large companies. To achieve this, I have chosen to use my “WEEKLY Machine Learning SuperTrend Strategy.”

SuperTrend Overview
My weekly "Machine Learning SuperTrend Strategy" combines traditional technical analysis with machine learning techniques to create a dynamic and adaptive trading system. It utilises moving averages, dynamic zones, and adaptive volatility levels to provide buy and sell signals.

Skate.
 

The Evolution of (AI) and Machine Learning in Trading
In the world of trading, technology has always played a crucial role. Initially, technical analysis was the primary tool for traders. Then, Machine Learning (ML) emerged as a game-changer, and now, artificial intelligence (AI) is taking the lead.

Machine Learning in Trading
Machine learning models analyse vast amounts of data to identify patterns and predict market trends. By categorising market volatility into levels such as high, medium, and low using metrics like Average True Range (ATR), Machine learning models continuously refine their predictions to adapt to changing market conditions. This allows traders to make more informed decisions based on data-driven insights.

Skate.
 

Understanding Volatility in Trading
Volatility refers to how much and how quickly prices move. By using machine learning, we can group periods of market activity into categories based on their volatility. This helps the trading strategy adjust its approach depending on whether the market is very volatile, moderately volatile, or calm. For example, in a highly volatile market, the strategy might become more cautious, while in a low volatility market, it might take more aggressive positions. This adaptability can improve the accuracy and effectiveness of trading decisions.

Using Machine Learning to Make Sense of Market Volatility
Imagine you have a bunch of different-sized balls, and you want to sort them into small, medium, and large groups. Machine learning is like a smart sorting machine that helps you do this. In trading, instead of balls, we have market volatility, which is how much prices go up and down. Machine learning sorts this volatility into categories like high, medium, and low. This helps the trading strategy adapt better to different market conditions, just like how sorting balls by size helps you find the right one for a game.

Skate.
 

Sorry Skate I forgot to mention, I was replying Nick's formula that reminded me on TASC article by Markos Katsanos ( this reply happen at this dumpy section that is under yours). As I mentioned to you earlier, I got too many systems already and one of the system that I play right now that might be similar to the existing super trend in the market is my own semi counter trend. Some of the works can be seen from the stock that I posted inside this forum. So I won't be put my focus on this thing at present

 

The article by Chris Conway of Livewire Markets, which inspired this exercise, highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in the field of finance.

Explanation - Fundie vs AI: The best ASX "Income" stocks for the next 12 months
This is a theoretical investment exercise pitting Google's (AI) Gemini against Dr Don Hamson from Plato Investment Management in selecting five "Income" stocks for the next 12 months.

Fundie vs AI: Who is the better stock picker? (and 10 ASX stock ideas for your trouble)

AI is getting better, faster, & stronger. Will it ever be able to pick stocks like a human? We take a step towards answering that question.
www.livewiremarkets.com

Results after 39 weeks
We recognise that this is nothing more than a fun, but nonetheless important, thought experiment. Ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.






Skate.
 

Weekly Performance Report: Trading vs. Term Deposit
After discussing with a family friend who opted for a 12-month term deposit at 4.75% due to market turmoil, I decided to take a different approach. While he viewed trading and investing as gambling, I believe in the potential of trading investment-grade stocks.

Exercise Start Date: 7th of October 2024
On the 7th of October, I carefully selected 10 investment-grade stocks. I will track their performance to determine which strategy yields better results.

Machine Learning SuperTrend Strategy
The "Machine Learning SuperTrend Trading Strategy" aims to maximise returns by leveraging machine learning to identify and trade trending positions. The initial investment is $100,000, divided into 10 positions of $10,000 each.

Companies in This Exercise
1. ALL.AX (Aristocrat Leisure Limited)
2. COH.AX (Cochlear Limited) - Excluded from the portfolio as it is not currently trending
3. CPU.AX (Computershare Limited)
4. CSL.AX (CSL Limited)
5. FMG.AX (Fortescue Ltd) - Excluded from the portfolio as it is not currently trending
6. GMG.AX (Goodman Group)
7. MQG.AX (Macquarie Group Limited)
8. REA.AX (REA Group Limited)
9. REH.AX (Reece Limited)
10. SHL.AX (Sonic Healthcare Limited) - Excluded from the portfolio as it is not currently trending






Skate.
 

Fund Manager vs AI: Who is the better stock picker?
Yesterday's post focused on "income" stocks. Today's post examines "growth" stocks.

The Article by Chris Conway of Livewire Markets
The article, (hyperlinked below) inspired this exercise, which highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in finance. This is a theoretical investment exercise pitting Google's (AI) Gemini against Tobias Yao from Wilson Asset Management in selecting five "Growth" stocks for the next 12 months.

Fundie vs AI: The best ASX growth stocks for the next 12 months

We've seen the income stocks, now we're looking at growth stocks in this edition of "Fundie vs AI: Who is the better stock picker?"
www.livewiremarkets.com

Results after 39 weeks
We recognise this is nothing more than a fun, but important, "thought experiment" as ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.



Skate.
 

Yikes, AI has definitely got the travel theme wrong, so far. Maybe timing just wrong.
 
Sean K said:
Yikes, AI has definitely got the travel theme wrong, so far. Maybe timing just wrong.
Click to expand...

@Sean K, you make a valid point. In (AI’s) defence, when asked to provide information about ASX growth stocks, (AI) pulls data from reputable financial news sources, analyst reports, and investment websites that regularly publish insights and recommendations on stocks.

It should be noted
Every free (AI) model is essentially an advanced search engine.

(AI’s) Performance in Predicting Stock Prices Over Time
The stock market is influenced by numerous factors, making it challenging for (AI) to account for sudden, unforeseen events that impact stock prices. However, any approach using past data doesn’t accurately predict future movements, especially in a volatile market.

In summary
While (AI) provides valuable insights, it’s important to remember that the stock market’s inherent unpredictability and the limitations of historical data can affect its accuracy. At the moment, (AI) should be regarded as nothing more than a fun tool.

Skate.
 
Richard Dale said:
I built my own multi-server GPU cluster (28 GPUs) for ML/LLM tasks.
Click to expand...

Not too distant into the future
Free (AI) models will be able to analyse market trends and risk factors, reshaping decision-making, and risk management. Emerging trends in "AI-based" stock market prediction will still carry some degree of human bias from the programmers. Despite this, there is substantial interest in exploring (AI) and machine learning’s potential in forecasting stock trends and prices.

(AI) and ML Trends
Machine learning models offer investors a potential edge in predicting stock prices and trends by swiftly processing extensive data over a trained lookback period as my “Machine Learning Supertrend Trading Strategy” aims to achieve. Adding (AI) to that mix could significantly enhance the profit potential of any strategy. Getting (AI) and machine learning (ML) to work harmoniously is another topic for discussion.

Judging by the comments made by @Richard Dale, it appears that (AI) trading is already being implemented on a commercial scale.

Skate.
 

Fund Manager vs. Two (AI) Models
Yesterday, we explored a one-on-one scenario between Google's Gemini (AI) and a Fund Manager. Today, we introduce Microsoft’s (AI) model, Copilot, to compare and contrast it with Google’s (AI).

Results after 39 Weeks
While this is a fun and insightful “thought experiment,” it underscores an important point: (AI) is poised to become a crucial tool for making more informed decisions across a wide range of topics.

AI Model Variability
With numerous (AI) models to choose from, I’ve selected Google and Microsoft for a direct comparison. Although trained on different datasets, both models operate under the same instructions. Microsoft Copilot and Google Gemini offer unique strengths that can complement the skills of a human fund manager.



Skate.
 

Simplified Weekly Performance Report: Trading vs. Term Deposit
After discussing with a family friend who opted for a 12-month term deposit at 4.75% due to market turmoil, I decided to take a different approach. While he viewed trading and investing as gambling, I believe in the potential of trading investment-grade stocks.

Exercise Start Date: 7th of October 2024
On the 7th of October, I carefully selected 10 investment-grade stocks. I will track their performance to determine which strategy yields better results.

Machine Learning SuperTrend Strategy
The "Machine Learning SuperTrend Trading Strategy" aims to maximise returns by leveraging machine learning to identify and trade trending positions. The initial investment is $100,000, divided into 10 positions of $10,000 each.

Companies in This Exercise
1. ALL.AX (Aristocrat Leisure Limited)
2. COH.AX (Cochlear Limited) - Excluded from the portfolio as it is not currently trending
3. CPU.AX (Computershare Limited)
4. CSL.AX (CSL Limited)
5. FMG.AX (Fortescue Ltd) - Excluded from the portfolio as it is not currently trending
6. GMG.AX (Goodman Group)
7. MQG.AX (Macquarie Group Limited)
8. REA.AX (REA Group Limited)
9. REH.AX (Reece Limited)
10. SHL.AX (Sonic Healthcare Limited) - Excluded from the portfolio as it is not currently trending





Skate.
 

The article by Chris Conway of Livewire Markets, which inspired this exercise, highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in finance.

Explanation - Fundie vs AI: The best ASX "Income" stocks for the next 12 months
This is a theoretical investment exercise pitting Google's (AI) Gemini against Dr Don Hamson from Plato Investment Management in selecting five "Income" stocks for the next 12 months.

Fundie vs AI: Who is the better stock picker? (and 10 ASX stock ideas for your trouble)

AI is getting better, faster, & stronger. Will it ever be able to pick stocks like a human? We take a step towards answering that question.
www.livewiremarkets.com

Results after 40 weeks
We recognise that this is nothing more than a fun, but nonetheless important, thought experiment. Ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.





Skate.
 

Fund Manager vs AI: Who is the better stock picker?
Yesterday's post focused on "income" stocks. Today's post examines "growth" stocks.

The Article by Chris Conway of Livewire Markets
The article, (hyperlinked below) inspired this exercise, which highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in finance. This is a theoretical investment exercise pitting Google's (AI) Gemini against Tobias Yao from Wilson Asset Management in selecting five "Growth" stocks for the next 12 months.

Fundie vs AI: The best ASX growth stocks for the next 12 months

We've seen the income stocks, now we're looking at growth stocks in this edition of "Fundie vs AI: Who is the better stock picker?"
www.livewiremarkets.com

Results after 40 weeks
We recognise this is nothing more than a fun, but important, "thought experiment" as ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.



Skate.
 

Time in the Market, Not Timing the Market
After reading Shane Oliver’s post today, I’ve gained a new perspective on how to invest $100,000 rather than locking the funds up in a 12-month term deposit as my friend has done. While I still believe in the potential of trading investment-grade stocks, I’m also impressed by how (AI) and top money managers have had the conviction to forecast positions they would invest in for the next 12 months. Inspired by this, I’ve decided to change my approach and do the same.

The 10 companies I’ve selected will remain the same, and I will buy the remaining 3 positions even though they aren’t currently trending on Monday’s open. This approach allows me to take the good with the bad, letting diversification do its job. When investing over a long period, the entry point becomes less relevant but still important. This means staying invested over the long term rather than attempting to predict short-term market movements, which I initially intended to do using my “Machine Learning” SuperTrend Trading Strategy.

Shane highlights that historical data consistently shows a buy-and-hold strategy often outperforms attempts to time the market. It’s more about staying the course and allowing investments to grow over time, rather than getting caught up in the volatility of short-term market fluctuations

Skate.
 

Simplifying Stock Picking - Focus on Long-Term Growth
When it comes to picking stocks, the process doesn’t have to be overly complicated. It can be as straightforward as identifying companies with strong businesses that have a solid track record of performance. It’s also crucial to ensure that the companies you invest in make decisions that are in the best long-term interest of both the company and its shareholders, as both @qldfrog and @divs4ever have reiterated over the years.

Focusing on the long-term rather than short-term fluctuations not only reduces stress but also aligns with the principle of time in the market. Diversification is key to managing risk. By spreading your investments across various positions, you can mitigate the impact of any single underperforming investment. This way, if one area underperforms, others may compensate.

Skate.
 

Building Long-Term Wealth
Building long-term wealth involves three critical elements: research, resolve, and remembering your goals.

How is it done?
Start by conducting thorough research to understand the companies you are investing in. This helps avoid impulsive decisions based on short-term market movements. Stay committed to your investment strategy, even during market downturns. It’s easy to panic and make rash decisions when you see your portfolio fluctuate, but maintaining your resolve can be the key to weathering the storm.

Finally
Remember that it’s not just about the money but rather about creating a secure financial future for yourself and your loved ones. Many have faced market downturns, but those who remain steadfast often reap the rewards when the market rebounds. By following these logical steps and maintaining a long-term perspective, you can build a robust investment portfolio that stands the test of time.

Skate.
 
Investing Lessons from Big AL
In August 2016, I was a year into my trading journey and doing quite well. One day, I found myself conversing with a man named Big AL, who stood 5 feet tall but had a towering presence. He was part of a wealthy family, and his three brothers were all big investors. As we talked, Big AL recounted how during the Global Financial Crisis (GFC), his brothers had all sold their investments at the bottom of the market, unable to stomach the losses. But Big AL had taken a different approach. Despite the pain and pressure to sell, he held his nerve and refused to give up on his investments.

Big AL’s family regarded him as a genius for his ability to weather the storm, but what he said next surprised me even more. “I didn’t need the money,” he said with a shrug. Those words have stayed with me ever since. It was a moment of realisation that sometimes, the best investment strategy is not about making a quick profit, but about having the courage and conviction to hold onto your beliefs, even when everyone else is running for the hills.

Big AL’s story taught me that the most important thing in investing is not the money, but the mindset. It’s about having the strength to stick to your guns, even when the market is screaming at you to do otherwise. It’s a lesson I’ve carried with me ever since, and I hope to pass it on to others.

Skate.
 
Stepping Off My Soapbox
Sharing Big AL’s words of wisdom is a perfect way to end today’s series of posts. Over time, I’ve noticed that the “Dump it here” thread is an opinion thread, mostly mine. Not all opinions resonate, but hearing a variety of differing perspectives helps in some small way. Thinking back, it’s been a delight when others have a different opinion or when they challenge mine. Either way, expressing a range of views is the very heart of this thread.


Skate.
 
one big risk to the long-term strategy is M&A activity

issue one is your nice position wants to morph into a different company ( examples were EML and SIG )

issue two is your company is having a tough time and predator takes advantages and pushes you out the door with a handful if cash

(examples CSR , CCL . CWN )

a third issue is the company strives for growth but can't handle the complexity ( AMP , WOW , NAB , as examples )

sure long term positions on the balance have been good to me , bit isn't as easy as it looks

you still have to watch them , watch them and maybe adjust quickly ( like i dis with EML . and SIG )
 
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