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Gambling with language models: One clueless investor's attempt at beating the stock market with ModernBert

Posted by Manwith2plans@reddit | LocalLLaMA | View on Reddit | 23 comments

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23 Comments

Dixie_Normaz@reddit

Everyone's a genius in a bull market.
View on Reddit #44481747

Incompetent_Magician@reddit

This. It's not difficult to get a bullseye if you poke the hole and draw the target around it.
View on Reddit #44514117

Lesser-than@reddit

what could go wrong?
View on Reddit #44381596

Mythril_Zombie@reddit

Not much. If you read the article, they're only putting in 5,000 that they pulled from other investments. It's not like this is taking food from their table. Second, they're doing it for the article. Their experiment is going to be publicly visible over the next year, so he will get some exposure to his post for a while. Last, he's diversified the 5,000 into 20 different stocks. That's a few hundred a piece. Some are quite large corporations, so it's unlikely those will go bankrupt in the next year. Some will go up, some will go down. In order to lose all his money, every company will have to get delisted. You think Etsy is going to go bankrupt this year? Also, if you had read more than just the title, you would see that he's the one calling himself clueless. He knows this is just an experiment, not a way to get rich or something to invest all his money in.
View on Reddit #44411263

Camel_Sensitive@reddit

The downside of this experiment isn’t monetary, it’s that the results will be meaningless, or worse, misleading.  Looking at the bottom companies in the article, you can see that they’re mostly utilities and energy, and more generally, companies that focus on dividend payments. He’s essentially just trained a model to select high beta stocks.  It’s worrying that people will look at this and draw conclusions from it, even though he tells them not to. 
View on Reddit #44462623

Lesser-than@reddit

It was meant to be meme akin to the wall steet bets hoodlums, I realize its just a sandboxed experiment with a fixed budget, I read the article. The reply was a direct reply to the title and less so the article.
View on Reddit #44442809

Manwith2plans@reddit (OP)

Yes, I think there is definitely a down-side here, but I think it's capped. Similarly, there is probably not sufficient signal within the contextual snapshots to create a huge upside.
View on Reddit #44433060

IrisColt@reddit

Nice read. My personal experience is that technical analysis works... on so many levels... but when people figure something out and it's vital to their own profitability, they don't run around sharing it.
View on Reddit #44395725

cobbleplox@reddit

Yeah, it's all about shaving off whatever predictable edge you can find, and you don't want someone else doing that. Funny how that's completely opposite to sharing your trades. Because there you absolutely do want as many people as possible to just follow your actions. Interesting that you say TA works. Because that should be somewhat widespread and therefore leave the market just random from a TA perspective.
View on Reddit #44433760

Camel_Sensitive@reddit

TA is just a set of algorithms that quantitatives have already figured out don’t work. Statistical arbitrage uses the same principles as TA, but it actually works, so it has its own name and billions are spent doing it by big firms.  The biggest advantage TA has today is that you can sell courses on it to the mathematically illiterate.
View on Reddit #44460876

IrisColt@reddit

Let me share how I see it: the realization hit me through my own experience—anecdotal evidence doesn’t disprove a concept. I saw that while technical analysis has flaws, proving them takes more than casual attempts. It became clear to me that in investing, information is everything—just because one person hasn’t cracked it doesn’t mean another hasn’t.
View on Reddit #44433761

ResidentPositive4122@reddit

In other words, when your barber starts talking about using bert to do sentiment analysis, it's already too late :)
View on Reddit #44396292

grmelacz@reddit

This is how I corrctly predicted 2021 ATH. Overheard two garbagemen talking how to buy Bitcoin. Immediately knew the end is near.
View on Reddit #44444417

IrisColt@reddit

Exactly!
View on Reddit #44401477

no_witty_username@reddit

No need to gamble with actual money nor wait for the results in real time. A test of the models performance could have been performed on historical data at some arbitrary date cutoff. You would also want to obfuscate the ticker symbol as to remove any Bias and perform other various data preprocessing for the validation test etc...
View on Reddit #44430755

ApplePenguinBaguette@reddit

He did finetune on historical data. ''Given the temporal nature of financial data, I employed a rolling window approach to simulate real-world conditions. I'd train the model using five years of historical data, and validate it on the subsequent year, moving the window forward by one year with each split." Achieving an average 20-30% root mean squared error, which isn't great but also isn't bad.
View on Reddit #44430756

Manwith2plans@reddit (OP)

This is true, but as u/no_witty_username correctly points out, I could have ranked after every window-slide, and back-tested to see whether the strategy would have made money historically. I didn't do that. I suppose the idea of this was a bit about gambling with an edge, and back-testing seemed like it would take some of the unknown out of the experiment. The blog post would have been less fun to write if I was confident in the experiment's success. As for obfuscating the ticker symbol, yes the contextual snapshot reports used genai to redact identifying information like the company name and product names. See the repository for the implementation details.
View on Reddit #44432845

visionsmemories@reddit

is the code open source anywhere?
View on Reddit #44388432

wonderpollo@reddit

There is a link to his GitHub at the end of the article. https://github.com/yehudacohen/ai-stock-picker/tree/main
View on Reddit #44393434

Naryul@reddit

RemindMe! 1 year
View on Reddit #44387168

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Icy_Foundation3534@reddit

A suggestion to the writer: Although somewhat interesting the gambling is what draws our attention and you never actually bought stock or options…
View on Reddit #44386347

Manwith2plans@reddit (OP)

See the bottom. Orders were placed and they will be fulfilled tomorrow morning when trading opens. You can track the progress via the public profile link over the next year.
View on Reddit #44386420