In our last blog post, we asked how you would use ChatGPT in your current work in investing:
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to analyze a stock
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search a universe, or
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both?
Then, we found a journalist who had put together an impressive list of time-saving uses when analyzing a stock. Reda Farran, CFA, is an analyst with the new investing publication Finimize. ChatGPT may be coming for our jobs as investment analysts, but we may keep ahead of the technology by using it as a junior analyst who’s really, really fast. And we don’t have to rush too much to keep ahead. With ChatGPT, the answers are coming from just anywhere on the Internet. But until the generator is pointed at a specific database like EDGAR, for example, the specificity of results is so lacking that junior or senior analysts are quite secure in their roles!
Reda Farran, CFA lists 6 possible ways to use this app to analyze stocks:
1) Ask ChatGPT to explain the #businessmodel of a company and ask follow-up questions. Ask not just “what” but also “how”.
2) Ask ChatGPT to perform a #SWOT analysis. Use that as a starting point and don’t hesitate to drill down into the details.
3) Ask ChatGPT to summarize a company’s #earningsreport calls. Add the link in the prompt and ask for the top 10 key takeaways.
4) Ask ChatGPT to evaluate a company’s #ESG credentials. But don’t forget to double check the information.
5) Ask ChatGPT to generate #code to backtest buy and sell signals. From testing the performance of different technical indicators to analysing past patters, ChatGPT can allow you to quickly test your hypothesis.
6) Ask ChatGPT to identify key #risks to your investment. Again, you might want to ask “how” and dig deeper into the details.
Results
I tested ChatGPT by asking it to summarize Coinbase’s earnings report calls and list the key risks of investing in TSLA:
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Summarize earnings report calls from Coinbase 2021:
As an AI language model, I do not have access to the specific details of all the earnings calls made by Coinbase in 2021. However, I can provide you with general information about what earnings calls are and what they typically cover
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What are the key risks of investing in TSLA?
Investing in Tesla (TSLA) carries a number of risks that potential investors should be aware of. Some key risks of investing in TSLA include:
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Market Risk: Tesla’s stock price can be volatile and can fluctuate significantly based on market trends, news events, and investor sentiment. The stock price can also be affected by broader economic and political factors.
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Regulatory Risk: Tesla’s business is subject to numerous regulations, including safety standards, emissions requirements, and licensing requirements. Changes in regulations, or new regulations, could significantly impact Tesla’s operations and financial performance.
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Competition Risk: Tesla operates in a highly competitive industry, with established players and new entrants competing for market share. Increased competition could impact Tesla’s ability to grow and maintain market share, and could also impact pricing and profitability.
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Production Risk: Tesla has faced challenges in the past with meeting production targets, including delays in launching new models and meeting demand for existing models. Any disruptions in production could impact Tesla’s financial performance.
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Financial Risk: Tesla has a history of operating losses, and its profitability is heavily dependent on its ability to achieve high production volumes and reduce costs. Any failure to achieve these goals could impact Tesla’s financial performance.
Investors should carefully consider these risks and other factors before making any investment decisions in TSLA. It is also recommended to consult with a financial advisor before making any investment decisions.
I think the results are mixed.
Since ChatGPT doesn’t have immediate access to the Coinbase earnings report calls, the answer is far less than satisfactory.
But the list of key risks of TSLA are as good as anything I’ve seen this AI generator write so far!
Still, this list would be a starting point for a good analyst – not an end in itself.
https://finimize.com/content/UHVibGljQ29udGVudFBpZWNlOjU3Mjc=/how-use-chatgpt-analyze-stock
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