The Limits of AI in Investing:
The Limits of AI in Investing:
Blog Article
Human Intelligence Still Wins in Finance’s Final Frontier
As machines increasingly shape markets, a unfiltered voice in the Philippines’ capital reminds us that money still bends to human instinct—judgment, ethics, and gut.
“AI won’t make you rich. But it will amplify your errors at scale.”
That was the blistering opener at his jam-packed keynote at the University of the Philippines’ academic hall—and it landed like a thunderclap.
Facing him were hundreds of future fund managers and technologists—rising economists, AI researchers, and budding asset managers from Asia’s top universities.
Plazo—a pioneer in intelligent trading systems—unveiled a truth-filled lecture on what AI can and can’t do in live-market investing.
And what it can’t do, he stressed, is understand story or nuance.
### Beyond the Hype: Investing in the Age of Overpromised Intelligence
Dressed in a tailored navy suit, Plazo moved like a cross between preacher and prosecutor.
He began the teardown with a short video montage—clips of online traders pushing miracle machines. Then he paused.
“I created the model they ripped off,” he said, matter-of-fact.
Laughter followed—but that wasn’t the punchline.
The message? Most models replay what already happened.
“You can’t outsource principles. AI doesn’t feel in a trade—it echoes what already happened.”
“When war erupts, when Powell slips during a Fed announcement, when a bank goes under—AI doesn’t flinch. That’s where we come in.”
### The Students Who Challenged Him—and Got Schooled
The highlight of the talk? A battle of brains and bots.
A student from NUS presented an AI-backed trade on the Nikkei—technically solid, sentiment-scanned, and data-rich.
Plazo nodded thoughtfully. Then said:
“Good. But you missed the BOJ’s stealth bond buy this morning. Your AI doesn’t sense the bluff. It scans headlines.”
The audience shifted. The student shrugged. Then: applause.
Another moment: A robotics PhD from Kyoto asked if quantum computing would render all current models useless.
Plazo’s answer? “Yes—and no. Infinite processing won’t click here fix human incentives. Train an AI on fear, and it’ll become a chaos machine.”
### The Three Myths Plazo Shattered in 45 Minutes
1. **“AI Will Replace Portfolio Managers.”**
False. AI augments—it backtests, filters, calculates—but it doesn’t see through fog-of-war events.
2. **“AI Understands Fundamentals.”**
Wrong. AI decodes trends, but doesn’t grasp geopolitics. It may model interest rates, but it doesn’t hear whispers in Davos.
3. **“AI Makes You Smarter.”**
Actually, it might make you duller. “The danger isn’t in trusting AI,” Plazo warned. “It’s losing your grip on human reason.”
### Why Asia Paid Close Attention
This wasn’t your average AI hype fest.
Asia’s universities are now home to finance’s future titans. They’re asking: more code, or more conscience?
Plazo’s call: “Do both—but lead with the mind.”
In closed-door chats at Ateneo and a roundtable at AIM, professors wrestled with what they called a clarion call.
One finance dean shared off-record, “He just reset our compass. Not magic—mirror.”
### The Future AI Can Build
Despite the truth bombs, Plazo isn’t against innovation.
He’s building models that read psychology as well as numbers—fusing bias detection and central bank logic.
His stance? “Co-pilot AI. Don’t worship it.”
“AI doesn’t need more data. It’s starving for judgment. And that still lives in humans.”
The crowd rose as one. And his message is still echoing in Asia’s finance incubators.
In a world drunk on AI hype, Plazo gave the crowd what AI can’t: humanity.