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AI and the Game of Markets Ben Hunt March 2018
AI and theGame of Markets
Ben Hunt
March 2018
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DisclosuresThis commentary is being provided to you by individual personnel of Salient Partners, L.P. and affiliates (“Salient”) and is
advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s indivi
author W. Ben Hunt’s affiliation with Salient Partners, L.P. and affiliates and does not reflect the opinions of Salient.
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How Does a Horse Run?
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How Does a Horse Run?
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How Does a Horse Run?
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AI Processes (Visualizes) Unstructured Data
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Another Unromantic Truth
Quality factor useless since QE began
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Another Unromantic Truth
Hedge Fund convexity vanished since QE began
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How Does a Market Run Without Quality?
Central banks have purchased more than $20 Trillion of financial assets, lifting the price of ALL financial assets.
How does that work?
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The crisis has passed, but I think the Fed’s need to educate and explain will only grow.― Ben Bernanke, November 19, 2013
Central Bankers Call it Communication Policy
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The Common Knowledge Gamethe the
getthe
the
thedon’t the
other
the“At”
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The Power of the Crowd Watching the Crowd
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The Power of the Crowd Watching the Crowd
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Our Modern Missionaries
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And Our Missionary-in-Chief
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Media Barons Have Known This Forever
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Even Today
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Even Today
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Wall Street Has Known This Forever
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Henry Blodget and Frank Quattrone in happier days …
Wall Street Has Known This Forever
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Even Today
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― –
Then
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―
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Use AI to Visualize Missionary Narratives
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Use AI to Visualize Narrative Networks
What Does the Mexico Narrative Look Like?
TMT (11%) Auto (3.9%)
TMT (11%) Auto (3.9%)
What Does the Mexico Narrative Look Like?
Bloomberg Narrative re: Trump Election week T-5 to T-2
Bloomberg Narrative re: Trump Election week T-1
Bloomberg Narrative re: Trump Election week T+1
What Does the Trump Narrative Look Like?
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The Evolution of Market Technology
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AI Doesn’t Replace Humans - It Saves Them
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What To Do? Think Critically
Don’t Be the Sucker at the Table
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What To Do? Think Critically
Don’t Be the Sucker at the Table
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What To Do? Think Differently
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AI Powered by Videogame Processors
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How AI Works (NOT One Big Brain)
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What’s Next With AI (Quantum Compute)
