Epíode 3 AI, Capital Markets, And The Future Of Investing

Hello folks, welcome to the AI and the personal finance workshop. This is the second season of this particular masterclass and up till now today we've talked about many different aspects of AI and how you utilize them or leverage them rather in making a personal finance portfolio work for you and the question we always ask for you either you're working for your money or are you making your money work for you. Today in this particular episode we talk about AI, capital markets and the future of investing. Let's start with how AI is transforming markets. The most critical element here, the biggest disruptor is algorithmic trading. Now for you, many of you don't know about algorithmic trading, what exactly it is. It is a simplistic way of trading which is guided with an informed and a credible AI platform that's called algorithmic trading. If you understand AI, you understand that it works on algorithms. Of course, there's aspects of machine learning and deep learning as well but apart from that it's basically working on algorithms. Algorithm training means analyzing all the different aspects whether they are the micro or the macroeconomic factors or whether if we talk about it the current trends and the volatility analysis as well. Apart from that, we have something called a quant system that also works for you as an investment compounder. Then you have institutionalized AI. As I said earlier, there are custom AI's which are credible, coming from credible sources which you can be comfortable sharing your financial data with. And finally, AI is fantastic in predictive analytics and it does that factually not emotionally. You might think a market is going to boomerang, it's going to go up like mad. It might not but the AI knows better because it's analyzing throughout history. And then of course, it is kind of judging the predictive analysis and it's taking into account the social, political, economic, financial and many other aspects as well. We have a holistic picture there and there is a genuine prediction which is coming forward. This is called predictive analytics. To go on further, AI will help retail investors gain advantage. Advantages in terms of long-term thinking, in terms of behavioral advantages, in terms of patience. It will give you and create a mission and a vision. In terms of behavior, each objective will give you a roadmap there. And finally, it will give you an understanding when to invest and when to quit. Let us now understand how to evaluate the right AI companies and go with the right AI here. First of all, credibility. If that particular company is not credible, do not go with that AI model. Number two, infrastructure versus applications. What is the infrastructure they have? What are the applications they have? Moving on further, the defensibility. If something goes wrong, what is the accountability angle of it? Then the data mode and finally, the compute advantage and then the monetization angle. Many of us are thinking about investing in AIs like perplexity, in clawing. But whenever you are making an investment in an AI company, remember the Bitcoin bubble. Remember the dot-com bubble. Remember the IT bubble. Remember the software bubble. Remember that because volatility is part of the investment game. Now, let us talk about the bubble psychology, which is quite critical here. Let us be in terms of investing in terms of personal finance, getting the best output. We understand there was the dot-com bubble. We understand there was the railroad boom and then we understand there was a telecom expansion bubble. If you follow history, recorded history says the biggest bubble ever was the tulip bubble. Europe, they said that tulips are going to, the price is going to skyrocket like anything. There was some time it did and then the market just busted and collapsed. The biggest question you should ask yourself is, am I going with the bubble psychology? Maybe things, what I am thinking about investing in might go down. This is called the bubble psychology. Because this is how volatility affects markets. This is how volatility affects industries. Now, let us understand what is a long-term investment thinking. The predictability angle of AI, the goal here is not just predicting the future perfectly. The goal is positioning yourself so that multiple futures still work in your favor. Let us take an example of China. If you follow the real estate markets of China, you will find there that they have ghost cities and ghost towns. That means all the buildings are there, lots and lots of apartments, but there is no takers. It is a ghost town. If you understand how these ATM kiosks transformed, today you do not need ATM kiosks, everything is UPI. That faltered. If you talk about the mall culture, I am giving examples here which are realistic, if you are thinking. If you talk about the mall culture, look at that. Again, the same thing. Today, most shops are either empty or not working. Mostly, you have these big players there like Reliance and Adani Group. But apart from that, smaller shops, no profit generation. With the online retail industry, everything has gone online. Now, everything is going to go AI as well. Even your shopping, mind you, and we will talk about that in the coming episodes. Thing to understand here, it is not about being the first mover advantage. It is always about understanding volatility broadly. It is understanding in a holistic perspective, which gives you the reaps and bounds you are looking forward towards. In the next episode, we will talk about building an AI powered personal brand. How do you go about doing that? We will talk about that in detail there as well. Because at the end of the day, all communication, all business is always about a personal brand, that repetition, repetition you have about yourself. And how you can use that to maximize your investments in terms of personal finance, and also the return of investing you are looking forward towards in that particular investment as well. See you in the next episode. Thank you so much for watching.