I couldn’t find a thread on this topic with a quick search. So, does anyone have personal experience using these AI-based stock pickers? I’d be interested in trying out a service for a small corner of my portfolio that provides clear buy and sell signals. I’d likely start testing with a small portion, so I wouldn’t want to pay high fees. Of course, if something like this actually worked, I’d gladly outsource my entire portfolio management to it during these busy years if it provided some added value.
A couple of months ago, I checked out Danelfin’s forecasts a bit.
Danelfin was a positive surprise when I researched AI-based stock picking. On the “Largest 1,000 US-listed stocks by market cap” and “STOXX Europe 600 stocks” lists. Last September, a TOP list like that was published, which is shown below. I only added the realized return percentages, which I roughly calculated from the price charts up to this day.
"Published 04/09/2023, 11:26
Investing.com - Danelfin has released its new September ranking of the stocks most likely to beat the market. Proprietary Machine Learning algorithms analyse more than 10,000 daily indicators for each company, based on more than 900 daily fundamental, technical and sentiment data. This methodology allows stocks to be evaluated from a holistic point of view. Quite impressive-looking selection.
But it is also important to consider the risk associated with each stock. Therefore, Danelfin has created a new ranking, which ranks companies according to the AI Risk/Reward Score, which is an average of the AI Score and the Low Risk Score.
The Low Risk Score is a score based on negative price fluctuations (semi deviation) over the last 500 market days. The higher the score (from 1 to 10), the lower the downside risk.
This is the Top 5 Risk/Reward Stocks, according to Artificial Intelligence data:
Yep. This is probably one of those things where you’d have to test it for a while to really know how it actually works. If you just pick individual stocks from there at a bad time, you can end up with losses just like with anything else… and obviously with the whole lot as well. I remember when the HCP Quant fund was launched and the backtested returns were something absolutely insane. But once they started investing with real money, it couldn’t keep up with the market at all anymore. Still, AI is interesting enough that I’m almost tempted to give it a try.
Similarly, at some point during the market peak, I looked at Redeye’s Top Picks’ returns and started following them with a small corner of my portfolio. Well, those bought at the wrong time are certainly my worst-performing investments. During my busy years, I thought I’d cut back on the analysis and just follow past good returns.
A couple of years ago, I think I also looked at Motley Fool and Zacks lists, but the stocks looked so different from my own style that I decided to skip them altogether. MF, at least in my opinion, mainly recommended ridiculously expensive hype stocks, many of which still had mediocre growth. This was just from a quick glance. I think I paid for both for a short period.
One could give Danelfin a try. You could either screen for suitable targets there or just pick stocks from the top of the list. There’s a free version of it as well.
