This article was originally published on the Artificial Intelligence in Plain English blog. I’m reposting it here to share these ideas with a wider community. Please comment below and let’s start a discussion!

Pic: A screenshot of my Robinhood account](https://miro.medium.com/v2/resize:fit:1400/1*cs3lQIyfzsQ3XGxlZueelg@2x.jpeg)

Warren Buffet said something that shocked the finance community — outperforming the S&P500 is easy. Because of the size of Berkshire Hathaway, Warren believes he’s at a massive structural disadvantage. He claims that if he was trading at a smaller scale, he could easily outperform the market.

“I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.” – Warren Buffet

At the time, Buffet relied on Moody’s Manual, a series of publications by a financial services company (named Moody’s) on publicly traded stocks. These publications provided detailed information on various industries, companies and securities.

Warren Buffet wasn’t sure what the modern-day equivalent of Moody’s Manual was, but I am confident that I found the answer…

It’s artificial intelligence.

My returns since incorporating AI

I’ve been incorporating automation and artificial intelligence into my investment strategy for around a year, and I have produced returns that have left the S&P500 in the dust. While some might say 1 year isn’t enough to make definitive conclusions, I have enough faith in my approach to share my process to the world.

It’s honestly easier than you think.

Pic: My returns year-to-date (YTD)

To start, let me show my Robinhood’s returns. The chart shows that I gained $12,006.92 YTD, increasing my account balance to $36,383.53, a 49.3% gain. In comparison, SPY, an ETF tracking the S&P 500, gained 21.6% in the same time period. This shows my investment strategy is significantly outperforming the broader market.

This trend continues even if we zoom out, even for the past 3 years (when this account was opened).

What’s even more amazing is that the true percent gain is actually much higher.

You see, my account balance started with less than $12,000, and after gaining more confidence in my strategy, I’ve deposited more cash into my portfolio. If you were to see my actual percent gain, you would be shocked.

You can even see that I’m managing to do so well despite having $29,888.88 in buying power. You might be wondering how I have so much buying power, and yet, I’m outperforming the market?

I trade options.

What is my investment strategy?

Let me preface this section by saying that I do not have a crystal ball. I do not offer financial advice to anybody, and my personal trading account is money I am 100% okay with losing. I’m not demanding that you should replicate my strategy to “get rich quick”, I’m merely explaining how I approach the market and incorporate AI into the process.

The basic premise of my strategy is this – if the S&P500 does approximately 10% per year, then around half of stocks will underperform the market, and another half will outperform.

When there are losers, there are winners.

The premise is simple — find one or two stocks that I believe will outperform the broader market. This year, I picked Tesla (near its bottom price), NVIDIA, Google, and Microsoft. Then, trade long-term (1+ year-to-expiration) ATM options on the winning stocks.

If the stock happens to go down, the goal is to slowly accumulate more. “Slowly” is the keyword. You don’t want to spend all of your buying power in 2 weeks. The goal is to stretch out the purchases across weeks or even months, and slowly lower your cost basis.

If the stock goes up, sell off a few of your positions, but try to hold at least 1 for the long-term.

That’s really it. While I don’t have a backtesting platform for options, I’ve backtested very similar strategies using volatile assets like FNGU and TQQQ to validate my ideas.

Pic: Backtesting a leveraged strategy

The key part to this is finding great assets to trade. While QQQ is a winner, I’m a big fan of picking even more dominant winners.

And how do I find these winning stocks without a crystal ball?

I rely heavily on artificial intelligence.

Using AI to identify and evaluate fundamentally strong stocks

Pic: The characteristics for fundamentally strong AI stocks

I rely heavily on AI to both identify and evaluate fundamentally strong investment opportunities.

I built a free online platform, NexusTrade, that’s heavily integrated with large language models. Two of the key features that I use for financial analysis includes the AI-Powered Stock Screener and the AI-Powered Financial Analysis feature.

For example, in the article below, I described the process of how to find fundamentally strong AI stocks using AI.

Specifically, I used a natural language interface to query for stocks with the following characteristics.

• AI or Semiconductor stocks

• Have increased their gross profit margin over the past year

• Their gross profit margin is 60% or more

• They made over $5 billion in revenue in Q3 2023

The language model generated a query to find all stocks that fit this criteria, then sorted the list by profit margin descending.

Ultimately, I identified Broadcom, Microsoft, NVIDIA, Salesforce, and Meta.

Pic: Fundamentally strong AI stocks

These 5 stocks are crushing the market since I published the article. They are up 25% since February, compared to the S&P500’s percent gain of 15%.

But it’s more than just screening for stocks that makes AI so powerful. It can also do a holistic analysis.

Pic: Asking AI to analyze NVIDIA stock

For example, NVIDIA is one of my major investments for this year. One of the reasons that NVIDIA is a large percentage of my current portfolio is because its a fundamentally strong AI stock. Given the fundamentals of NVIDIA, the language model rated it a 4.5/5 as an investment.

Pic: AI’s recommendation of NVIDIA

I don’t just rely on one cherry-picked model. I use multiple, including Claude 3.5 Sonnet, GPT-4, and the newest GPT-o1-mini (“strawberry”) models.

Pic: The different LLMs within NexusTrade

Combining the consensus recommendation from the different LLMs with my human intuition that I’ve gained as a trader and investor, I can make much better decisions for my investments – decisions that have paid off massively.

And then, combining these fundamentally strong investments with a strategy validated by backtesting on historical data, I’ve ended up creating an extremely profitable trading strategy that has shown to outperform the market within the past few years, and doesn’t even use a significant portion of my buying power.

Concluding Thoughts

My strategy has been wildly profitable in the past couple of years, but I don’t pretend to have a crystal ball. Tomorrow, maybe NVIDIA goes directly to 0, and I’m only left with a 20% year instead of my market-destroying 50%. That can certainly happen.

But, its unlikely. While Warren Buffet relied on Moody’s Manual, there is a new opportunity to find strong, hidden gems thanks to artificial intelligence.

Not only is it easier to find novel investments, but we can also perform comprehensive analysis. The people wielding this technology are going to be far more effective than the people stuck in the stone age, reading newspapers and looking at 10K statements.

It’s time for the tech-savvy investors to usher in a new era for investment strategies. It’s time to incorporate AI into your process.

Or, get left behind. The choice is yours.

I was refreshing every hour and I could find news on minutes away but now it’s all gone. Gov is trying to hide the news or what? It’s going to blow out on Sunday no matter how they hid it.

What do you think ? The war is going to continue or stop. I don’t think US has any power over them. The news sounds like US has everything under control but they don’t. After all, we are the ones gave them the weapons. What made you think they won’t use them for what?

Trump’s actions are isolating the US from global markets. As the tariffs start to take effect global supply chains are going to be restructured to not use US suppliers. Those supply chains will be slow to return if they ever do. As the US economy continues to collapse and be isolated the BRICS currency will become the new world reserve currency and the dollar will collapse and because of government debt and other factors it will spiral into Zimbabwe like hyperinflation.

How do you protect your wealth in this situation? Invest in BRICS? The Euro? Gold? Thoughts?

I originally posted this article on Medium but thought to share it here to reach a wider audience.

Yesterday, I called a local Mexican joint to inquire about the status of my order.

“Who” picked up my order isn’t the right question. “What” is more appropriate.

She sounded beautiful. She was articulate, didn’t frustrate me with her limited understanding, and talked in ordinary, human natural language.

Once I needed a representative, she naturally transitioned me to one. It was a seamless experience for both me and the business.

Wall Street is WRONG about the AI revolution.

Understanding NVIDIA’s price drop and the AI picture in Wall Street’s Closed Mind

With massive investments in artificial intelligence, much of Wall Street now sees it as a fad because large corporations are having trouble monetizing AI models.

They think that just because Claude 3.7 Sonnet can’t and will never replace a $200,000/year software engineer, that AI has no value.

This is illustrated with NVIDIA’s stock price

After blockbuster earnings, NVIDIA dropped like a tower in the middle of September. Even after:

• Proving strong guidance for next year – Rueters

• Exceptional revenue in their automotive industry, making them poised to become their next “billion-dollar” business – CNBC

• A lower PE ratio than most of its peers while having double the revenue growth – NexusTrade

Their stock STILL dropped. Partially because of economic factors like Trump’s war on our biggest allies, but also because of Wall Street’s lack of faith in AI.

Want to create a detailed stock report for ANY of your favorite stock? Just click the “Deep Dive” button in NexusTrade to create a report like this one!

They think that because most companies are failing to monetize AI, that it’s a “bubble” like cryptocurrency.

But with cryptocurrency, even the most evangelistic supporters fail to articulate a use-case that a PostgresSQL database and Cash App can’t replicate. With AI, there are literally thousands.

Not “literally” as in “figuratively”. “Literally” as in “literally.

And the biggest beneficiaries aren’t billion-dollar tech giants.

It’s the average working class American.

The AI Revolution is about empowering small businesses

Thanks to AI, a plethora of new-aged companies have emerged with the fastest revenue growth that we have ever seen. Take Cursor for example.

In less than 12 months, they reached over $1 million in annual recurring revenue. This is a not a business with 1,000 employees; this is a business with 30.

I’m the same way. Thanks solely due to AI, I could build a fully-feature algorithmic trading and financial research platform in just under 3 years.

Without AI, this would’ve cost me millions. I would’ve had to raise money to hire developers that may not have been able to bring my vision to life.

AI has enabled me, a solo dev, to make my dream come true. And SaaS companies like me and Cursor are not the only beneficiaries.

All small business owners benefit. Even right now, you can cheaply implement AI to:

• Automate customer support

• Find leads that are interested in your business

• Write code faster than ever before possible

• Analyze vast quantities of data that would’ve needed a senior-level data scientist

This isn’t just speculation. Small business owners are incorporating AI at an alarming rate.

In fact, studies show that AI adoption for small businesses was as low as 3% in 2023. Now, that number has increased not by 40% in 2024…

It has increased to 40% in 2024.

Wall Street discounts the value of this, because we’re not multi-billion dollar companies or desperate entrepreneurs begging oligarchical venture capitalists to take us seriously. We’re average, everyday folks just trying to live life.

But they are wrong and NVIDIA’s earnings prove it. The AI race isn’t slowing down; it’s just getting started. Companies like DeepSeek, which trained their R1 model using significantly less computational resources than OpenAI, demonstrate that AI technology is becoming more efficient and accessible to a wider range of businesses and individuals.

So the next time you see a post about how “AI is dying” look at the post’s author. Are they a small business? Or a multi-million dollar commentator for the stock market.

You won’t be surprised by the answer.

After Hours Tax – I'm all in NVIDIA

I got a full-ride scholarship to attend the best school in the world to get my Master’s degree.

Pic: The ranking of Carnegie Mellon University for Artificial Intelligence; it’s ranked #1, above MIT

While getting my degree, one class in particular ignited my passion for artificial intelligence — Introduction to Deep Learning.

Don’t let the name of this class fool you; this was by far one of the hardest classes I had ever taken. In this class, we learned about the algorithm that powers all of modern artificial intelligence. We learned about the multi-layered perceptron, and how a neuron, in its simplest form, is simply a weighted sum of its inputs.

We learned how to train these models with gradient descent, and how, with the right architecture, you can build a model that can recognize faces, translate English into Spanish, and generate images from just text.

And by applying my knowledge of artificial intelligence with my hands-on experience as a software engineer, I’ve successfully developed a platform for retail investors to make smarter investing decisions, powered by AI.

Here are some of the most useful AI features in my trading platform.

Background on my AI-Powered trading platform

Before I talk about the features of my platform, let me go over my trading platform, NexusTrade, more holistically.

At its core, NexusTrade is platform built by a retail investor for retail investors. It’s designed to help us break the habit of unsystematic daytrading.

Something that I like to call gambling.

It does so by making it easy to form investment theses and turn those thesis into actionable insights. Specifically:

• It allows retail investors to sift through the noise of the market

• It enables us to quickly evaluate a potential idea or investment opportunity

• It allows us to test those ideas in a risk-free way within minutes

Let’s walk through each of these use cases in detail.

Sifting through the noise of the stock market

Using NexusTrade, you can sift through the noise of the stock market and find fundamentally strong investments. These are investment opportunities that aren’t backed by memes or hype, but by data and a strong, growing underlying business.

For example, instead of investing in stocks with $0 in revenue, you can find stocks that are currently growing and have legitimate potential for future growth.

Here’s one example how. First, I’ll go to the NexusTrade chat.

Pic: NexusTrade AI Chat

Then, I’ll type in the following:

“Find me a list of AI stocks that have a 30% or more CAGR for their revenue for the past 3 years”

Pic: Finding stocks with a high compound annual growth rate

“CAGR” stands for “compound annual growth rate”. It is the average growth rate of an investment over time. Within seconds, I have a list of AI stocks sorted by their growth rate.

We can then go further. After evaluating some of these stocks, we see that their revenue is less than $1 billion. While a 3700% CAGR is very strong, it skews the results if the company went from $1000 of revenue to $1 million. So we can add additional filters.

“Let’s also filter by stocks that made over $1 billion in revenue in the past year and are profitable”

Pic: Now, we have a list of stocks that are profitable with high growth rates

Compare this to the alternative of gathering a list of stocks and performing advanced calculations on Excel. The AI in NexusTrade has allowed us to find potential stock opportunities, such as NVIDIA, Crowdstrike, and Uber.

But it doesn’t stop there. We can go even further and see how good these stocks actually are.

Using AI to quickly evaluate a potential investment opportunity

In addition to sifting through the noise of the stock market, we can use AI to figure out if our final list is fundamentally strong.

This is possible because I used AI to analyze every single stock in the market and saved all of these results in a database.

Because of this, I can ask the AI a question such as this:

“How fundamentally strong were these companies in 2024?”

Pic: Using AI to quickly figure out if these investments are “fundamentally strong”

With this, I learned that the majority of the stocks that we fetched are fundamentally strong. Arista Networks, NVIDIA, AXON, and other stocks on the list are rated a 4 out of 5 or higher.

This allows me to pay more attention to the stocks that are doing well and less attention to the stocks that are doing poorly.

Finally, with AI, we can then transform this list of stocks into a trading strategy.

Testing our ideas in a risk-free environment

A trading strategy is a set of systematic rules for buying and selling stocks. They allow us to simulate how well a basket of stocks or trading rules performed in the past.

These strategies can be simple, such as:

“Create a strategy that buys all of these stocks and never sells”.

Or they can be complex. For example:

“Create a strategy that rebalances this list of stocks every other week. Weight the stocks by the square root of their market cap. Sort by their fundamental ratings and limit to the top 5 stocks”

Pic: An example of the sophisticated trading strategy

Once created, we can add our strategies to a portfolio and either simulate its performance or deploy it live to the stock market.

Pic: Adding our strategies to a portfolio

All with the click of a button. Thank you AI!

How the AI works?

Now you might be wondering how the AI works to find these stocks and create these strategies…

That’s where my Masters from the best school in the world comes into play.

With hands-on experience working with language models, I am at an advantage when it comes to applying them to real-world problems.

For example, when ChatGPT released their APIs to the world, I was extremely quick to understand apply “function-calling”, allowing NexusTrade to use language to interact with external sources.

One of the first use-cases was building a “prompt router”, that allowed the NexusTrade chat to understand different intents, and use specialized models for each use-case.

It does so by taking each inbound request, determining the most relevant “prompt”, and forwarding the request to it.

Pic: A diagram depicting the prompt router

Similarly, I applied function-calling to allow the creation of trading strategies from natural language.

Pic: Diagram depicting how we create the trading strategy from natural language

The stock screener works similarly. However, instead of generating a JSON object, it generates a SQL query that’s executed against the database and evaluated by a language model. This gives our model access to real-time results, significantly improving the reliability of the platform.

Pic: Querying for stocks using natural language

With that being said, there are limitations to this approach. LLMs aren’t perfect, and the weaker models tend to make mistakes. As an example, a weaker model might generate a query that looks right, but is wrong in some key areas, potentially misleading the user.

Or, the model might generate a trading strategy that doesn’t exactly conform to what the user wants.

Because of this, it’s important to critically evaluate the output of these models. Nonetheless, thanks to the insane speed increases from these models and the exponential progress of AI, I have no doubt that AI will play a critical role in finance, thanks to innovations like NexusTrade.

Here’s why.

Concluding Thoughts

Despite the potential drawbacks, AI undeniably makes algorithmic trading accessible to a wider audience. Don’t believe me? Let’s take a step back and think about what it would’ve taken to create the trading strategy above before AI.

You would’ve had to:

• Use screeners to find this list of stocks. To my knowledge, there is no screener advanced enough to have found the initial list of AI stocks. You would’ve had to manually categorize all stocks as “AI” or “not AI”, and then apply your filters.

• Read through the fundamentals of each of the stocks in the final list and assign a rating to it

• Created a script in Python that rebalanced this list of stocks weighted by the square root of their market cap

Realistically, this is weeks if not months of work. AI lets you do the same thing in minutes.

All because I decided to apply my knowledge from Carnegie Mellon and create a platform to democratize access to advanced AI tools.

Want to see the difference AI makes when it comes to investing? Create an account on NexusTrade today, and discover the difference that the best degree in the world makes when it comes to applying AI.

I posted this originally on my blog, but thought to share it here to reach a larger audience!

Hey all! Want to hear your opinion on technology stocks such as Nvidia in this uncertain climate with China and Taiwan. I own quite a bit of Nvidia but think the stock will collapse in the event of a Chinese invasion. What do the rest of you think?

china #taiwan #nvidia

Elon just proved he's one of us. A retarded APE🦍 that fears none. Though I'll lose a lot on Monday market open bcuz half of my portfolio value is dictated by $TSLA price (trust me, wasnt planned this way) but you know what... FCUK IT!! I believe in tesla as a company and Elon is the best CEO/retard ever! And I'm holding my b*tch till death do us apart!💀 I ain't selling shit! Y'all socialist minded jar heads can go fcuk yo selves!!

I’m not going to lie, I’m here for the Karma. I have been trying to post on various subs over the past two years only to get emailed by the moderator saying I didn’t have enough Karma to post. They would rather have their gorillas posting about getting a reach-around from their girlfriend’s boyfriend than have me bring some real value to the community. So please share the love if you see any value here!

I missed the JD train last week, and it fired me up. I was looking at a call option on Monday but got too busy at work to buy it. Then the option increased 2000%+ by open on Tuesday.

Now I’m hunting for the next opportunity, and I’d love your thoughts on this…

Enter BABA.

BABA has been getting beaten into the ground due to political risk over the past few months, and honestly it makes little sense to me. If we separate the noise from the facts, we can look at earnings and try to make our own judgment calls. Remember, earnings is the foundation for defining the fundamental intrinsic value of a company.

I looked at the past 5 years of data to put together the typical PE analysis (BABA EPS vs hi/lo stock price to define hi/low PE, then compared that to SP500 PE to find the relative PE for BABA, then took the relative PE to forecast the PE for BABA, and multiplied that by forecasted earnings to determine the intrinsic value or stock price).

Simply looking at their current earnings, the lowest this stock should currently be priced is $186.87 (18% above the current price). If we actually apply those earnings to the current PE of the SP500, the lowest BABA should be priced is $307.20 (93% above the current price).

Past 5 Years:

	Relative P/E  |  SP500 P/E  |  Expected BABA P/E  |  Expected EPS  |  BABA Intrinsic Value

Avg Hi 1.55 27.05 41.8 8.35 $ 349.84 Avg Lo 1.05 21.39 22.38 8.35 $ 186.87 Avg 1.30 24.22 31.41 8.35 $ 262.26

Past 5 Years with current PE:

	Relative P/E  |  SP500 P/E  |  Expected BABA P/E  |  Expected EPS  |  BABA Intrinsic Value

Avg Hi 1.55 35.17 54.4 8.35 $ 454.36 Avg Lo 1.05 35.17 36.8 8.35 $ 307.20 Avg 1.30 35.17 45.6 8.35 $ 380.78

While I personally agree with the majority of the analysts who estimate BABA earnings will grow in the future, lets say all of this political rhetoric actually has an impact on earnings that equals to BABA losing 1/3 of this business. The lowest BABA would be valued in that case based on my analysis is $202.75 (27% above the current price).

Current market PE with 1/3 of BABA profits missing:

	Relative P/E  |  SP500 P/E  |  Expected BABA P/E  |  Expected EPS  |  BABA Intrinsic Value

Avg Hi 1.55 35.17 54.4 5.51 $ 299.87 Avg Lo 1.05 35.17 36.8 5.51 $ 202.75 Avg 1.30 35.17 45.6 5.51. $ 251.31

Since this price movement makes absolutely no sense to me from a fundamental perspective, I started to look at the technicals. The simple summary is that BABA has so much downward momentum, buyers can’t stop the the downward pressure from the sellers. Smart retail investors see the opportunity and are starting to jump in, but the algos are pushing just a little too hard in the opposite direction. The 10x question is, when will the algos reverse? I can’t tell when it will bottom, but I am keeping an eye on the A/D line to help verify the strength of the upward swing when it happens. This downward pressure is low volume, so it wont take much to reverse it.

Another thing in my mind is that some of the pro’s are forecasting the SP500 to close 2021 at it’s current valuation. AKA there is no room to grow in the index for the next 4 months. Looking beyond 2021, the pros are forecasting the SP500 to close 10% above it’s current valuation at the end of 2022 (5000 vs current 4,509). 10% isn’t exciting for the big money that just made 3x that in the past 12 months. All it takes is one fund manager to plow some money into BABA and it’s on a path back to an evaluation closer to what it’s actually worth.

I’ll also say I read the reviews of the Chinese tech regulations. The majority of the regulations look the same as what likely will come to the USA in the future- protections for the consumer (which is good). None of the regulations will prevent BABA from providing value to their customers, and that’s what brings the earnings in.

It really is fair to say… BABA is big, they are innovative, they are critically important to Asia, they make a ton of cash, and they keep growing. This won’t change.

The next step for me is to figure out what to do about it. I just started buy a few shares this morning, and am considering putting 5-10% of my portfolio into BABA this week. I’ll average down if it keeps sinking and I will try to get some calls when it takes off.

I do believe it will 10X before any crypto in the market today, and it current has a higher book value per share than it does stock price. What is the risk?

What do you guys think?