October 6, 2023

IntualityAI has decided to pause

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Our news release to the public, Grant Renier 

Dr Howard Rankin writes about "‘Sleeping on it’ is a great idea!"

Michael Hentschel explains "we humans will soon be able to choose to sleep soundly"

 

TRADING PERFORMANCE RESULTS OF THE INTUALITYAI SYSTEM HAVE MANY INHERENT LIMITATIONS.  NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN REPORTED PERFORMANCE RESULTS AND RESULTS SUBSEQUENTLY ACHIEVED BY THE SYSTEM OR PORTFOLIO. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF THE SYSTEM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF REPORTED PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

IntualityAI thinks it's time to pause

A macro function of IntualityAI is to constantly evaluate the environment - in this case the investment markets - for predicted levels of exceptional risk. Like the trader who starts his morning by listening to the news, viewing a few charts of indices and taps his intuition, decides not to trade today. He has existing positions that he feels good about - they will be fine given his longer-term strategy. IntualityAI simulates the same process based on everything it knows from its population of the S&P 500 equities.  Here's one of those events.

by Grant Renier, Intuality Chairman, engineering, mathematics, behavioral science, economics

‘Sleeping on it’ is a great idea

There are several historical examples given by imperialist explorers that document the total surprise of natives in different parts of the world, when the explorers’ ships came ashore. One notion is that these natives were engaged in some type of inattentional blindness, and as they had no concept of a large ship, they couldn’t see it until it was right upon them. Whether that explanation is accurate or not, it does raise the question of quantum consciousness. 

Are there numerous possibilities in front of us, but our perception brings one of them to life? Do we create our own reality?

Clearly there are material things that exist but what about the immaterial? Our judgements of people, our perceptions of ourselves, the discerning of patterns, the creation of trends? These clearly depend on consciousness and are potentially infinitely variable. So what does this say about decision-making and prediction specifically in the financial markets? Are we looking at Quantum trading?

If our decisions are based on our perceptions, it would be wise to pay careful attention to how we are creating those perceptions. What might seem like a great idea today, could be a terrible one tomorrow. Impulsivity should not be a characteristic of prediction. There will rarely, if ever, be certainty in prediction. And we must recognize that perception can convince us of the truth, where only chaos exists, especially when chaos exists.

The wise person looks at his or her perceptions with some doubt, because they are aware of their fickleness and the significance of embracing them.

This is the reason that when you have an important decision to make, you sleep on it. You give yourself more time to think about it because you acknowledge that perceptions change. They change especially if there is a lot of uncertainty. They change when more information arrives. They change as your consciousness constantly fluctuates.

‘Sleeping on it’ is a great idea because when you’re sleeping and your consciousness is turned off it stops perceiving, it stops creating ‘reality’. It’s a time-out, and allows you to regroup and come back into wakefulness with a potentially new or confirming perception of ‘reality’.

by Howard Rankin PhD, Intuality Science Director, psychology and cognitive neuroscience

we humans will soon be able to choose to sleep soundly

Since September 12, (14 days as of this writing), IntualityAI told us that it was going to STOP new trading, effectively going to sleep. This is a significant amount of time already, and only in 2008 and 2011 (see chart at end) did similarly dramatic intentional inaction take over our test trading models. Rightly as it turned out, then and now. We call this the AI “Protective Growth” feature, decisive yet only wisely so, hedging or staying inactive as it senses that need in real-time market psychology.

Our AI program will not budge at the moment, even with Friday’s amazing job creation totals, and is clearly many days from being re-convinced to re-activate itself, given its S&P Behavioral Analysis for all of its managed accounts totaling $1.1M of potential trading capacity. In one such account, it is hedged and is making money, but holds no stock at all at the moment. The system alerts us about discovered behavioral tendencies of markets as market psychologies change.

Action is not the only way to make a wise decision, sometimes inaction is the answer. Three major modes of IntualityAI decisions (and each is decisive) are:

· Investment mode (awake active mode)

· Hedge mode (protective reactive mode)

· Sleep mode (inactive subconscious mode)

Only an all-sensing AI, and yet also only an AI trained to think like humans, can effectively process all these real time events and understand them in a context of human judgment. And it’s not all action: like humans, sometimes it pays for machines to sleep on decisions. Our subconscious continues to decide as we sleep. Machines need to simulate that human psychology decision process, just as IntualityAI keeps track of AI subconscious intentions and intuitions.

The AI senses irrational chaotic cross-currents, recently challenging machine rationality and human intuitive rationality:

· Wall Street's "fear gauge" of recession passed key levels with investors rattled by soaring bond yields. · The benchmark S&P 500 has tumbled 8% since the end of July 2023, so nervousness remains high..

· Friday’s 336,000 jobs, more than twice expectations, turned out to be fake news of sorts: there were -22,000 full-time jobs, +70,000 government, +151,000 temporary (many double-counted for people holding multiple part-time jobs), and +100,000 seasonal/travel/non-permanent, not really strong as first glance After such analysis, the initial fear by the market that interest rates would rise further turned into a relief rally that weakness would persuade the Fed to relent. The AI rightfully sensed investors waiting for this to sort itself out and saw no reason to act or react.

· Thus the AI currently remains convinced that it is a good time to STOP rather than risk resources aimlessly.

Intuality AI is a unique Humanized AI, a decision making tool that predicts where other AI’s fear to tread, and anticipates future events. In the process, it identifies opportunities to profit or benefit from those events. Unlike any other AI, human qualities and behavioral tendencies are revealed in past data and in current real time events, and create more accurate predictions just the way the wisest humans have done in the past. Peace of mind is as hard for machine rationality as human rationality to achieve. When in doubt, protective decisions to freeze in inaction can be the optimal strategy.

And by the way, we humans will soon be able to choose to sleep soundly while the AI makes all the optimized decisions… our way as well as their way, the best of both.

by Michael Hentschel, Intuality CFO, anthropologist, economist, venture capitalist

 

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