Naturally, I am interested in streamlining both the research and investment processes, which raised the intriguing topic of how ChatGPT may be used for investing.
In order to make investment decisions, analysts might use ChatGPT to analyze financial statements and other data.
Additionally, ChatGPT can assist in spotting market data trends and patterns that could otherwise, go unnoticed because of how swiftly ChatGPT operates, it can complete this task considerably more quickly than a person.
It offers a person, at the very least, a beneficial, rapid starting point from which to explore deeper.
Let’s take a look at a few of the subjects that analysts typically examine, and where ChatGPT might be a useful helper.
Business Description
It can explain a company’s business model, revenue generation methods, and operational procedures.Additionally, if we dig a bit deeper, we might ask for details about a company’s management group or its many business divisions. (of course, keep in mind that the information might not be accurate).
Acquisitions
We may once more ask for more detailed information about a certain acquisition, and it can display the most significant acquisitions over a specific period of time.
Competitors
We can ask ChatGPT to list potential competitors of a business and get solid results.
Performance
Both the basic performance of the company’s operations and the performance of the stock price may be disclosed to us. Sometimes it also makes comparisons with other firms and how they performed around the same time.
Data analysis
Large datasets can be analyzed with ChatGPT to discover patterns that are difficult to see with conventional analysis techniques. It can swiftly spot trends and patterns by being trained on data, which can help with financial modelling and decision-making.
Limited capabilities
While calculating a relative valuation ratio should be doable provided ChatGPT has access to the most recent data, determining an intrinsic value for a company is more difficult and appears to be beyond the scope of ChatGPT’s capabilities.
Even if ChatGPT were able to draw these inferences that are used in a discount cash flow calculation, I suppose that it would still not create an intrinsic value because people might base their judgments on that knowledge and the corporation could be held accountable.
In conclusion, ChatGPT is certainly not a shortcut to reaching an investment decision about a certain company or stock. The final decision on whether to invest in an asset is still our own responsibility.
However, ChatGPT can help us in the research process and get the necessary information. Information and data by themselves are not enough as we still must interpret the data and make a final investment decision, but it can make the research process more efficient.
The Author is co-founder and director, Credent Asset Management
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
