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Dear Reader,
This week, I've been fascinated by a new... entity... called the ChatGPT Fund. Roughly 14,361 investors have poured money into a fund that will determine whether ChatGPT can pick a better basket of stocks than mere mortal money managers.
It started buying stocks on Monday - and plans to hold them for a two-week period. So far, the 20-stock portfolio has been trending higher. Names like Alphabet Inc. (GOOGL), Broadcom Inc. (AVGO), and others are ripping higher...
The designers set up the fund to have ChatGPT analyze recent media including blog posts, news articles, and more. They then created a sentiment score around its finding.
It then created a portfolio of equal weight around these 20 stocks.
So, is ChatGPT better than humans?
Well... it's complicated, but it did reveal a powerful new trading tool to me.
Hmm - Something's Off Here
There is something a little odd about the fact that no ticker in the portfolio starts with the letter J on down the alphabet. Now, based on the Semitment Score, this could all be coincidence... but then I noticed something really unique...
The fund has been adding money all week, and it's up to $8.1 million in combined funds. I started to notice that stocks that aren't in the upper tier of the S&P 500 - names like Albemarle Corp. (ALB) are starting to show an interesting buying pattern.
This is a good time for full disclosure: I signed up for the fund and put some money in. So I noticed (via an autopilot app) that my purchases all went through at around 10 AM.
And what I've seen from ALB - a momentum stock - is that selling occurred in the first half-hour of the day. And then... buying at 10 AM that lead to further gains in the afternoon.
It's not just Albemarle - a good chunk of these stocks are exhibiting this behavior.
So this all begs the question: Is the ChatGPT Fund actually good at picking stocks? Or is it good at attracting the attention of other algorithms which can propel momentum stocks higher?
This is what we're investigating and, if my theory is correct (and I think it is), profiting on, in our trading sessions at Hyper and Flashpoint Trader.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.