‘ChatGPT picks stocks better than top fund managers;’ Can it though?

Earlier this year, CNN made waves with a report titled “ChatGPT can pick stocks better than your fund manager.” 

The report shed light on a study conducted by researchers at the University of Florida, asserting that OpenAI’s chatbot exhibited superior predictive capabilities in terms of stock price movements for specific companies, outperforming basic analysis models. 

In the wake of this revelation, a cohort of investors took action, embarking on an experiment that involved investing a $50,000 portfolio solely based on ChatGPT’s recommendations. 

The so-called “GPT Portfolio” seeks to validate whether AI-powered insights could indeed surpass traditional methods in the complex realm of stock market predictions.

The GPT Portfolio lost $4,000 since the start of August

Interestingly, the ChatGPT-based portfolio started off well, soaring 8.7% from its inception in mid-May to July 31, adding more than $4,300 to its total worth during that period. 

However, the impressive performance was rather short-lived, with The GPT Portfolio’s gains dropping to just 1.4%, compared to SPDR S&P 500 ETF Trust’s (SPY) returns of 7.4% according to the latest performance update revealed on August 16. 

As a result, the AI-powered stock portfolio is now worth only $50,716, losing almost $4,000 since the beginning of August. 

To prevent further losses, the community asked for stop losses, which have now been “prompt engineered in at 7%,” The GPT Portfolio noted on Twitter.

A stop-loss order for stocks is a predetermined price level set by an investor to automatically trigger the sale of a stock at a specified level in order to limit potential losses. 

The GPT Portfolio portfolio update

In its latest update, The GPT Portfolio introduced five new stocks, divested from five existing ones, and retained the previous selection of five stocks, reflecting a dynamic adjustment to its holdings.

Among those that have just been added are healthcare company Abbott Laboratories (NYSE: ABT), Parsons Corp (NYSE: PSN), Exxon Mobil (NYSE: XOM), Waste Management (NYSE: WM), and Trex Company (NYSE: TREX). 

At the same time, the AI-based portfolio offloaded 5 other holdings, including Roku (NASDAQ: ROKU), Micron Technology (NASDAQ: MU), T Rowe Price Group (NASDAQ: TROW), Chart Industries (NYSE: GTLS), and Albemarle Corporation (NYSE: ALB).

5 stocks that The GPT Portfolio retained in the new update are tech giants Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), ChampionX Corp (NASDAQ: CHX), McDonald’s (NYSE: MCD), and CME Group (NASDAQ: CME). 

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.