ai and the game of markets · wall street has known this forever. 20 henry blodget and frank...

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

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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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W. Ben Hunt, Ph.D.

bhunt@salientpartners.com

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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)