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445: Using AI to Maximize Investment Gains?
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This week’s episode explores the world of artificial intelligence as it relates to stock trading. While I’m not a stock trader, I find the use of AI in various aspects of finance fascinating.
But before we do that, let’s take a step back for a moment and realize that sometimes you don’t need artificial intelligence to guide you. Sometimes you just need common sense and some guts. If you’ve got those qualities, you should be chomping at the bit right now.
As Warren Buffett famously said, “Be fearful when others are greedy, and greedy when others are fearful.” This contrarian approach has proven successful for many investors who have had the courage to act when others hesitate.
Historical examples demonstrate the potential rewards of this approach. Following the 2008 financial crisis, investors like John Paulson and Sam Zell capitalized on depressed real estate markets. Paulson’s hedge fund reportedly made billions by purchasing distressed properties and securities, while Zell’s Equity Residential acquired thousands of apartments at steep discounts.
The current multifamily real estate market provides another opportunity for people to make extraordinary profits. We are just at the beginning of a new cycle. Unprecedented interest rate increases have decimated property values, creating a unique opportunity for investors.
The key to success in these situations is to identify markets that are temporarily depressed due to external factors rather than fundamental flaws. In the case of multifamily real estate today, the current downturn is driven by interest rates, not a lack of housing demand or oversupply.
When investors purchase already discounted properties in high-interest rate environments, they position themselves for further potential windfall gains as rates normalize. As interest rates decline, property values typically increase.
The moral of the story is this, while fear may dominate current market sentiment, history shows that those who invest wisely during downturns often reap substantial rewards. As Buffett noted, “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” The current multifamily real estate market may well be one such golden opportunity for investors with the vision and courage to act.
All you need is some common sense and some guts. But in this week’s Wealth Formula Podcast, we are going to talk about more nuanced things that might require something extra like artificial intelligence.
05:50 Using AI for Stock Trading
07:30 Do You Use AI for Daytrading or Long Term Trading
11:31 Is AI Closing the Gap Between Institutions and Everyday People?
19:16 How to Get Started with Using AI for Daytrading?
