Using AI to Trade Less, Move Slower, and Make More Money: The Strategies of One of the World’s Biggest Investors

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Norges Bank Investment Management (NBIM), one of the world’s largest investors with over $1.3tn assets under management, is using artificial intelligence (AI) to make its investments more profitable. Unlike most Wall Street firms that are rushing to use AI to trade more quickly and gain an edge, NBIM is using AI to trade more slowly and thoughtfully instead. The innovative AI tool evaluates each stock for its short-term potential, based on factors such as valuation, margins, revenue, trading volume, and volatility, and assigns a score. The best stocks to buy are marked in green, while the worst are marked in red. Because NBIM is committed to buying a bit of everything, it also buys the red-marked stocks, but after it has prioritized the green-marked ones. As a result, the investment giant has generated meaningful profit and reduced buying costs considerably. Furthermore, the AI tool allows NBIM to purchase stocks in a way that does not affect the market’s prices too much. In a video, Jon Egil Strand, a portfolio manager in Equity Trading and Transition, said that many funds and hedge funds use AI to speed up, but the firm uses it to slow down instead. Its goal is to play our own game, where we start with our needs, our characteristics, what makes sense for us.

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Frequently Asked Questions (FAQs) Related to the Above News

What is Norges Bank Investment Management (NBIM)?

NBIM is one of the world's largest investors with over $1.3tn assets under management.

How is NBIM different from other Wall Street firms in its use of AI?

Unlike most Wall Street firms that are rushing to use AI to trade more quickly and gain an edge, NBIM is using AI to trade more slowly and thoughtfully instead.

How does NBIM's AI tool evaluate each stock?

The innovative AI tool evaluates each stock for its short-term potential, based on factors such as valuation, margins, revenue, trading volume, and volatility, and assigns a score.

What happens to the worst stocks marked in red by NBIM's AI tool?

Because NBIM is committed to buying a bit of everything, it also buys the red-marked stocks, but after it has prioritized the green-marked ones.

Has NBIM's use of AI been profitable?

Yes, the investment giant has generated meaningful profit and reduced buying costs considerably.

How does NBIM's AI tool affect the market's prices?

The AI tool allows NBIM to purchase stocks in a way that does not affect the market's prices too much.

What is the goal of NBIM's use of AI?

The goal of NBIM's use of AI is to play its own game, where it starts with its needs, its characteristics, and what makes sense for it.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

Advait Gupta
Advait Gupta
Advait is our expert writer and manager for the Artificial Intelligence category. His passion for AI research and its advancements drives him to deliver in-depth articles that explore the frontiers of this rapidly evolving field. Advait's articles delve into the latest breakthroughs, trends, and ethical considerations, keeping readers at the forefront of AI knowledge.

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