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Stock Picking AI? Elementary, My Dear Watson

Empowering Public Private Collaboration in Infrastructure

Prepared in collaboration with the World Economic Forum

Empowering Public-Private Collaboration in Infrastructure National Infrastructure Acceleration (NIA) approach

Women were the Vital Statistic of the 2018 Midterm Election

A Conversation on China's Growth-Leverage Dilemma

Stock Picking AI? Elementary, My Dear Watson

Keen watchers of the ever-developing exchange-traded product space may have noticed an intriguing development last week, as the first purely “artificial intelligence”-based stock-picking ETF launched. Powered by IBM’s “Watson” platform, the fund sponsors claim to use a proprietary quantitative model to select stocks that will outperform, based on machine learning applied to vast data sets.

One cannot help wondering if they have missed a trick: as far as I can tell, their algorithm does not explicitly allow for the possibility that – rather than trying to pick stocks – a truly intelligent option might be to invest their entire portfolio in a low cost index fund, or otherwise replicate the market portfolio. Certainly, buying such funds is nowadays as easy as buying stocks, while the data would suggest that this is more than a viable option.

Perhaps, one day, another sponsor will create a fund including this option. Perhaps, one day, our machines will be so advanced that they can draw conclusions from the entire range of academic and practitioner studies that examine the performance of stock-picking compared to low-cost passive investing. Perhaps, if it helps, they can check their conclusions 10,000 times a second.

Such a fund may never exist, but if it one day does, I hope they call it “Holmes”.

Watch: Empowering Public Private Collaboration in Infrastructure

S&P Global CEO Doug Peterson speaks with Maha Eltobgy from the World Economic Forum, on their joint study that looks at how greater collaboration between the public and private sector can accelerate national infrastructure programmes.

Empowering Public-Private Collaboration in Infrastructure National Infrastructure Acceleration (NIA) approach

Executive summary

Infrastructure is a key economic and social driver of sustained growth and acts as a true enabler of a country’s competitiveness. Yet new infrastructure development remains insufficient and ineffective, and many investors continue to be discouraged by a general lack of information, the absence of bankable deals and risky policy environments. Enhanced public-private collaboration and understanding are therefore required more than ever, as stretched government budgets and increasing infrastructure needs conspire to widen the infrastructure financing gap.

There is no silver bullet for addressing the many facets of this global challenge; however, in a world where there is no shortage of capital, pursuing the right collaborations and frameworks may offer a potential solution. In this context, the National Infrastructure Acceleration (NIA) model proposes an innovative approach to a sustained country dialogue to address infrastructure development and investment.

How Argentina Aims To Bridge Its $358 Billion Infrastructure Gap As Investors Hesitate To Return

From Forbes

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NIA facilitates interaction between the private sector and governments, thereby contributing to improving countries’ investment climates, deepening local capital markets and ultimately accelerating the development of infrastructure pipelines.

To achieve this, the NIA initiative convenes national multistakeholder working groups, recognized and endorsed by the national governments concerned. These working groups represent a standing, multistakeholder platform designed to facilitate interaction between its members, the goal of which is to identify actionable solutions to advance infrastructure development and financing. They also provide a space to address policy questions and initiate collaborative projects among members.

This report describes a standardized NIA Implementation Roadmap created by the World Economic Forum in close cooperation with S&P Global. By defining a series of activities that have proven to be effective in implementing NIA successfully at a country level, the Forum aspires to expand its reach and further the adoption of the model in additional countries, municipalities and regions around the world.

This publication is intended to serve as a blueprint for policy-makers, private entities and multilateral development banks (MDBs) that want to introduce a sustainable model for public-private collaboration in their respective countries or jurisdictions.

Read the Full Report

Women were the Vital Statistic of the 2018 Midterm Election

Like most elections, the 2018 U.S. midterms served as a modern Rorschach test–people saw whatever story served their purposes and credibly made cases of where they won, where they did not, and what it meant looking ahead for 2020.

What is not up for debate, however, is that women made their indelible imprint on this election. A record number of women are headed to Congress in January, and they got there because women showed up to vote for them. According to exit polling by ABC News, women accounted for 53 percent of voters, a record high. And they voted for Democratic House candidates by a 60 percent to 39 percent margin.

That still doesn’t answer the most important question: Why?

Why did women show up and put more women in office than ever before?

In 2017, S&P Global launched a comprehensive research project titled, “Women, Work and Wealth”, designed to explore the inclusive economic benefits of increasing women's participation in the workforce.  See our two foundational research pieces The Key to Unlocking U.S. GDP Growth? Women, and Adding More Women to the U.S. Workforce Could Send Global Stock Markets Soaring.

In a continuation of these research efforts, we teamed up with SurveyMonkey, the global survey software company, to deploy a post-election poll, setting out to find out what was on voters’ minds, specifically women voters. This national survey of nearly 7,500 adults conducted after the November elections reveals women’s animating concerns about the country, the economy, and their own financial lives. The data highlights not only the tremendous gaps between how women and men orient themselves politically, but also how differently women of various ages, racial, and ethnic backgrounds see the country and their own prospects.

These four insights caught our eye:

1. 70% of women believe there were more opportunities to excel in leadership positions over the past decade, and this majority holds across all subcategories: age, race, income, political party, etc.

Source: SurveyMonkey

2. Equal pay was selected by women voters across all subcategories as the most effective means to increasing opportunity for women.

Chart2Source: SurveyMonkey

3. Democrats earned women’s trust this time overwhelmingly when it comes to financial policies that benefit them and their families.

Source: SurveyMonkey

4. Health care is the animating issue for women, dwarfing other top issues including jobs and the economy, which is the top issue for men.

Source: SurveyMonkey

This analysis is based on a SurveyMonkey online poll conducted among adults ages 18 and older in the United States. Respondents were selected from the more than 2 million people who take surveys on the SurveyMonkey platform each day. Data have been weighted for age, race, sex, education, and geography using the Census Bureau’s American Community Survey to reflect the demographic composition of the United States age 18 and over. This survey was conducted November 7-14, 2018 among 7,467 adults. The modeled error estimate for the full sample is plus or minus 1.5 percentage points. Respondents who did not to answer questions are included into the total percent calculation but are excluded visually from the charts in this article. For those percentages, see the "No Answers" in the full crosstabs.

A Conversation on China's Growth-Leverage Dilemma

Nov. 26 2018 — Caution is the watch word in China. Banks are more reluctant to lend, home sales are slowing,and companies are frettingabout funding costs and availability. Substantial corrections in stock and bond prices indicate more trouble ahead, yet top line consensus growth figures continue to point to a gradual GDP deceleration. So what are the risks to an orderly scenario?

Senior analysts and economists in Asia-Pacific have been discussing the likely scope and direction of policy easing amid flagging confidence; and transmission issues on stimulating private-sector activity. Our conversation also touched on whether deleveraging goals will be sidelined as authorities seek to guide for gradually declining growth. We also bring other voices into the dialogue, based on our many interactions with investors, issuers, bankers, and China watchers around the globe.

Read the full report