The Massive Economic Benefit of A.I. that No One Talks About
Humans are bad at predictions. We’re emotional, we have biases, and we often shortchange research and analytics to go with our ‘gut feeling’ instead. There’s an old saying in economics, coined by former Federal Reserve Chairman Alan Greenspan, that the Federal Reserve has “accurately predicted nine of the last five recessions.”
Predictions are not our strong suit, yet business and investment decision-making often rely heavily on them. A CEO’s forecast for sales in a given quarter can impact everything from inventory to new hires, to the earnings forecasts made by analysts on Wall Street. For investors, our decision on how to invest, what types of securities to purchase, and how to allocate our portfolio – all of these decisions rely in great part on our predictions for what will happen in the future.
In short, in business and investment, we place a lot of emphasis on our ability to predict the future, which ultimately means we critically rely on one of our greatest weaknesses.
A.I.’s Economic Benefit: Lower the Cost – and Boost the Accuracy – of Prediction
Professor Ajay Agrawal, who teaches at the University of Toronto’s Rotman School of Management and founded a company called the Creative Destruction Lab, argues that A.I.’s single most transformative and important economic function is its ability to lower the cost of prediction.
Here’s an example Professor Agrawal offers to provide context. Consider Amazon’s recommendation engine, which in and of itself is a prediction application of A.I. Professor Agrawal’s team found Amazon’s tool to be about 5% accurate, meaning that out of every 20 items it recommends you buy, you buy one of them but not the other 19. While that sounds like a pretty low level of accuracy, one must also consider that Amazon picked those 20 items out of the millions upon millions of items in its vast catalog. On that basis, the tool is pretty darned good.
Every day, engineers and data scientists in Amazon’s machine-learning group are working to get those numbers higher, better. As the prediction tool becomes more accurate, perhaps we’ll end up buying 3 or 4 of the items in the recommended list of 20, increasing the economic value of the A.I. and also the revenue and profit model of the business.
The same logic and value-add apply to the investment world. Humans all too often let our emotions and biases play an outsized role in our forecasts for the markets, and that in turn affects our investment decision-making. Artificial Intelligence can remove the emotion completely from the equation, and it can also process more data in seconds than a human could in a year. With research, analytics, back-testing, and statistics, the A.I. can make a market prediction based on data. Humans simply cannot compete.
If You’re Wondering When A.I. Will Start Making Market Predictions…
Guess what – it already is. Hedge funds and large institutional investors have been using Artificial Intelligence to analyze large data sets for investment opportunities, and they have also unleashed A.I. on charts to discover patterns and trends. Not only can the A.I. scan thousands of individual securities and cryptocurrencies for patterns and trends, and it generates trade ideas based on what it finds. Hedge funds have had a leg-up on the retail investor for some time now.
Not anymore. Tickeron has launched a new investment platform, and it is designed to give retail investors access to sophisticated AI for a multitude of functions:
- Finding stock patterns in the market
- Finding trends in the stock market
- Testing portfolios to see if they are well-diversified
- Back-testing statistics to see how different stock patterns generated trading results
- Making Predictions for price movements in the future, with “A.I. Rank” and level of confidence in the trade.
And much more. No longer is AI just confined to the biggest hedge funds in the world. It can now be accessed by everyday investors. Learn how on Tickeron.com.
Momentum Indicator for AMZN turns positive, indicating new upward trend
AMZN saw its Momentum Indicator move above the 0 level on December 24, 2024. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 76 similar instances where the indicator turned positive. In of the 76 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 59 cases where AMZN's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AMZN advanced for three days, in of 338 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 308 cases where AMZN Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for AMZN moved out of overbought territory on December 18, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 48 similar instances where the indicator moved out of overbought territory. In of the 48 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Moving Average Convergence Divergence Histogram (MACD) for AMZN turned negative on December 19, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AMZN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
AMZN broke above its upper Bollinger Band on December 04, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. AMZN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 89, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (9.294) is normal, around the industry mean (4.875). P/E Ratio (48.942) is within average values for comparable stocks, (60.817). Projected Growth (PEG Ratio) (1.878) is also within normal values, averaging (2.753). Dividend Yield (0.000) settles around the average of (0.028) among similar stocks. P/S Ratio (3.945) is also within normal values, averaging (5.823).
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a provider of on-line retail shopping services
Industry InternetRetail