My Dear Watson

By Wes Crill, PhD, Senior Client Solutions Director and Vice President

My Dear Watson
View All Insights

Jun 01, 2023

2 Minute Read

Topic

Market Volatility

Amazingly, more than a decade has passed since the IBM Watson supercomputer overthrew legendary Jeopardy contestant Ken Jennings.1 This felt like a watershed moment for computing technology, and my mind reeled at the thought of what Watson might tackle next. In hindsight, I should have guessed it would be stock picking.

The AI Powered Equity ETF, launched in 2017, employs IBM Watson’s artificial intelligence to analyze publicly available information and attempt to pick US stocks that will outperform the US market. But while Watson may be able to outwit an individual, even one as intellectually gifted as Ken Jennings, its intelligence pales in comparison to the aggregate wisdom of the millions of individuals trading in stock markets each day. It is perhaps unsurprising2 then that the Watson-powered ETF has lagged the broad US market and, by a wide margin, the US technology sector since its inception.

Source: Bloomberg. Sample period begins with the first full month of returns for AI Powered Equity ETF.
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Footnotes

  1. 1My wife and I met a few months later, so I need to be careful how I characterize the passing of time. 
  2. 2Or as Sherlock Holmes would say to Dr. Watson, "Elementary."

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