Artificial Intelligence Imitates Graham & Dodd

Composer's Just Making It Publicly Available

I like all new fangled gadgets, better ways to do anything different and ideas that seem to come “out of nowhere”. The basis behind “Artificial Intelligence” might not exactly fit your definition perfectly but if there’s a word I’d leave out it is “artificial”. There is nothing artificial about what’s springing up left and right, something new just about every day and the last thing I’d call it is “artificial”; I’d call it “real”.

Now the word “intelligence” fits but you don’t have to be a “genius” to either identify or develop it. Like any other productivity advancement, the “intelligence or genius” is based in its actual use. What qualifies something to be considered as a true and actual “AI” enhancement? For me there’s a few questions that need to be answered yes or no. Is the “process” I want to “replicate” beneficial, does it save me time and energy? Can the process be “programmed” in a universally user friendly manner; in other words its product or end result can be used by anyone. Finally, like any business proposition can I make money either using it or selling it. Once you address these questions, just like me you’ll discover that “AI” is really just a fancy name for creating what someone uses or needs, making the process better, quicker and more affordable than it was before.

There’s A New Sheriff In Town

AI, or at least what some call it has made its way into the algorithmic trading world. I have been aware of a Toronto, Ontario company behind the website “Composer” for a couple years now. It was founded in 2020 to produce an “automated trading platform” that’s now on the market. Its software lets retail investors automatically manage their portfolios to look like the returns made by a few major hedge funds and professional asset managers.

Composer is the website of a “portfolio management software company”, that allows fund managers and investors to automate investing, even their trading activities, at a “click” of a mouse. Users can now create these trading and investment strategies. The software features a user friendly “no-code” visual interface that allows you to initiate and modify strategies with ease. You can even backtest your strategies and compare returns to a benchmark or another strategy. But first you have to open up a brokerage account with Alpaca Securities, where Composer leverages its highly flexible suite of broker APIs, helping you build end-to-end embedded trading and investing products. OK, that’s the sales pitch but what’s really behind the curtain?

So essentially it’s a sophisticated Robinhood or ThinkorSwim platform giving insights into investing or trading the right way. That’s a good thing and assuming their choice of investments are primarily the best-of-breed" in the ETF world, fewer investors will become victims of the “meme” world of herd mentality trading. But ask yourself, what if a large enough percentage of investors use Composer through Alpaca and decide to take the same action at the same time? It’s bound to happen if indeed this form of AI catches on and I think it will. I’d use it if for nothing more than to see what it selects. It’s probably going to be so smart that shortly after everything it’s recommended will become overvalued and sold, right? That’s the way it should work. So what’s the true “underlying” basis for its existence; making the clearinghouses richer.

After you cut through enough of the layers what originally looked and seemed to be a “ wonderful idea”, if properly used. becomes a tool for creating excesses for but a few. That is not good but the basic concept of Composer is; I even hear that Beethoven and Mozart have set up accounts, or at least their likenesses have. Graham and Dodd trade there now but let’s face it, we’ve been copying and improving upon their methodology for years. Now there’s an AI-based entity that can do it better but for how long?

The Tools I Use

To be “always learning” is a good thing. Having all of the sources at your fingertips is even better. Here’s another extract from “The Ticker’s Bible” for you to use until the book becomes available next month on Amazon.

Regardless of how you got here you’re here. It’s time to reveal to you just what tools I use. The “informational” tools I use, analytic, technical and deciding what to read and write about follows what John Naisbitt illustrated in his 1981 book “Megatrends”. Buy it; better yet read it; the advice provided still works today.

The following list of resources provide me much more than knowledge. They give me a matrix-like template of what’s “trending”. Think about just how important that word is to every social media site you use or visit. I identify what’s “trending” then research and investigate the trend. The resources I chose are the most “looked at” by the flock, considered to be “active” traders and investors. This means these “resources” get the most “eyeballs”. So going about things the way I do, my “work” product sorts for the best trends that get the most eyeballs. In addition, while many of these sites do cost money, several, or at least parts of others, are free. Free is good especially to those of you just getting started. Just “click” on a few and decide for yourself.

Resources

Barchart - http://www.barchart.com/ - Barchart is a leading provider of financial market data and technical analysis to the global financial, media and commodity industries. Barchart is one of my “go-to source for charts.

Bloomberg – http://www.bloomberg.com/ - Bloomberg, a major media conglomerate, is a provider of news and information, research and financial data. Founded in 1981 by Michael Bloomberg it’s a major source of financial analytics and information.

CNBC – http://www.cnbc.com/ - CNBC is a well-known and followed cable business news channel and website. It provides “business” news programing weekdays from 5:00 AM to 7:00 PM, Eastern Time. It is highly followed and a source I use.

Finbold – https://finbold.com/guide/chart-patterns/ - Finbold is my “go-to” source to teach you technical analysis. When an entity possesses the tools and innate ability to concisely and accurately present information better that I can it’s recommended.

Finviz – http://www.finviz.com/ - Finviz is a comprehensive “toolbox” for all investors and traders with a focus on US markets. Finviz’s stock market “portal” offers stock screeners, news feeds, portfolio management, stock charts and more. Its mission is providing solid financial research, analysis and visualization to its users. I’ve been using it for years.

Fox Business – http://www.foxbusiness.com/ - Fox Business, is a “business” news channel and website publication owned by the Fox Corporation. Despite being a bit biased, its contributors are highly qualified experts in their fields, followed by many investors and traders.

FXStreet – http://www.fxstreet.com/ - FXStreet is a “meeting place”, the crossroads where traders and investors find unbiased, high quality and free information needed to make the best decisions in the currency markets from Monday to Friday.

IBD – http://www.investors.com/ - Investor's Business Daily, a mostly conservative newspaper and website, covers the stock market, international business, finance and economics. It provides general news and analysis on all investments, stocks, mutual funds, ETFs, commodities, indices other instruments targeting individual investors, traders and financial professionals.

Investing.com – http://www.investing.com/ - Investing.com, is a “financial platform” and “news website”; one of the top three global financial websites in the world that offers market quotes, general information and analysis on stocks, futures, options and commodities along with a real time economic calendar.

Investopedia - https://www.investopedia.com/ - Investopedia is a “financial media” website and provides investment dictionaries, advice, reviews, ratings and the direct comparison of financial products. With more than “44 million” monthly viewers it’s a go-to source I recommend and personally use as I “can’t be everywhere” all of time.

Motley Fool – http://www.fool.com/ - The Motley Fool, a “paid-for”, “private” financial advice driven investing service, based in Alexandria, Virginia is one I have personally used for 30 years. If you purchase all of their different segments, without question it’s the best I’ve found, anywhere. Their advice more than makes up for their costs.

NinjaTrader – https://ninjatrader.com/ - NinjaTrader, together with all its subsidiaries, provide “award-winning trading software” and brokerage services for active traders. I have used and successfully developed trading platforms on NinjaTrader for years.

TheStreet.com – http://www.thestreet.com/ - TheStreet is a solid financial news and literacy website. The company provides both free content and subscription services such as Action Alerts Plus, a stock recommendation portfolio.

ThinkorSwim – http://www.thinkorswim.com/ - It is mostly positioned to “self-directed” stock, options and futures traders providing financial services for most investors and traders including trading tools and analytics. It is used in conjunction with the trading of equities, fixed income, index products, options, futures and foreign exchange.

TradeStation – http://www.tradestation.com/ - TradeStation, is an online securities, futures brokerage firm, best known for its technical analysis software and electronic trading platform. It provides a “start-to-finish” platform for all investors and traders.

TradingView – http://www.tradingview.com/ - Tradingview is a charting platform and social network used by over “50 million” traders and investors to spot “opportunities” across global markets. Watching the most “popular” sites provides instant, real-time information about what others are currently looking at; that’s very important.

Tradovate – https://www.tradovate.com/ - Designed for its speed and ease of use, Tradovate’s depth of market “DOM” module, and add-ons, allows traders to quickly analyze price information in the exchange’s limit order book, place orders rapidly, and managing positions easily. I use it; you should to.

ValueLine – http://www.valueline.com/ - Value Line, is an “independent” investment research and financial publishing firm based in New York and was founded in 1931. Value Line is best known for the “The Value Line Investment Survey”, a solid stock analysis newsletter that tracks approximately 1,700 publicly traded stocks. I’ve used Value Line throughout my career.

Zacks – http://www.zacks.com/ - Zacks, a long-time research and analysis firm, has a commitment to independent research and shares its profitable discoveries with all investors. Their years of dedication providing investors a better “trading advantage” led to their “Zacks Rank” stock-rating system. Over a quarter century, it’s more than doubled the S&P 500 with an average gain of +24.26% per year. It worth subscribing to just like I do.

Not bad, eh? Just being true to what my objectives are, helping you be the best damn investor or trader you can be. Who knows, the whole book might even get done while I still have hair. Everyone will learn at their own pace. If you pick it up the first time, great if not email me at david@thetickeredu.com so I can further help. Let me know what you think about the excerpt, I’m all ears.

Kind of in a Billy Joel mode today. “The Entertainer” was always one of my favorites. I first saw him in a piano bar; if that doesn’t date me perhaps seeing Bruce Springsteen in a corn field will suffice. Anyhow enjoy the tune and the one that follows.

No folks, “We Didn’t Start The Fire” or did we. What happened in Maui? I can’t begin to take in all of what I’m hearing. It’s beginning to look like environmental protection decisions created then made the situation worse. Enough already, so it’s hot. Back in the 1960s and 1970s, it was cold and these same lunatics were predicting the next “ice age”. I’m finishing my 1st book, “The Ticker’s Bible - Book One: In The Beginning”. I hear there’s another one out there with five books that’s a must read written by God. I think it’s time more people out there read that one and stopped imitating its author. It is time for our politicians to “stop playing” God and start abiding with what the Bible teaches us or at least tries to; read it.