Oklahoma high school student makes a breakthrough, ChatGPT earns a whopping 23.8% in four weeks.
Nathan Smith, a high school student from a rural town in Oklahoma, shocked the investment community with an unprecedented experiment: letting ChatGPT completely control a $100 investment portfolio, resulting in an astonishing 23.8% return rate within four weeks, far exceeding the Russell 2000 Index (INDEXRUSSELL: RUT) increase of 3.9% and the biotech ETF XBI's increase of 3.5%.
This experiment originated from Smith's encounter with an AI stock selection advertisement on YouTube. After research, he found that no one had attempted to create a portfolio completely led by a large language model, so he tasked ChatGPT with a clear mission: to build the strongest portfolio among U.S. micro-cap stocks with a market cap below $300 million, aiming for maximum returns.
The biggest difference from other trading algorithms is complete autonomy. Smith states: "AI is responsible for handling everything; position size, stop-loss points, etc., are not my decisions." The only human intervention occurs when ChatGPT is self-contradictory. ChatGPT has shown surprising investment intuition, especially when handling Candel Therapeutics Inc (NASDAQ: CADL), a stock that contributes about 50% of the portfolio's profits, selling it decisively at the right moments.
The risk indicators are impressive, demonstrating calm investment judgment.
The risk indicators calculated by Smith are stunning. The portfolio's Sharpe ratio reaches 0.9413, and the Sortino Ratio is as high as 2.0021, indicating strong returns while limiting downside risk. Generally, a Sharpe ratio above 1.0 is considered good performance.
ChatGPT's demonstrated objectivity in investment decisions has impressed Smith. He specifically mentioned: "It wisely knows that in the micro-cap industry, all gains can vanish in an instant. Many hedge funds cannot make such decisive decisions." This emotionless investment judgment is precisely the weakness that many human investors struggle to overcome.
This system has been open-sourced on GitHub, with ChatGPT selecting stocks weekly, always maintaining a market cap limit of $300 million. Although it has only been operational for a month, which is not enough for a high-reliability evaluation, the current results are exciting.
Quantitative finance has become a life ambition, planning to extend the experiment.
The technical infrastructure built by Smith includes five main functions: manual trading, portfolio tracking, daily result generation, and visualization comparing performance with the S&P 500. The system extracts data from the Yahoo Finance API for analysis, and the entire setup is "actually very simple."
This Oklahoma small-town teenager almost accidentally discovered his passion. He had studied Harvard's online computer science course, but it wasn't until last summer that he truly fell in love with the industry after discovering quantitative finance and Python. Over the past year, he has submitted nearly 1,000 code contributions on GitHub and has accumulated quite a few newsletter followers.
Smith plans to extend the experiment to a full year after its conclusion in December, although balancing it with exam preparations will be a challenge. He said, "I really believe I have found my life passion and hope to one day make it a real profession."
This experiment not only demonstrates the potential of AI in the investment industry but also proves the limitless possibilities of financial technology innovation for the younger generation.
This content has been generated by aggregating various information by Crypto Agent, reviewed and edited by (Crypto City). It is still in the training phase and may contain logical biases or information errors. The content is for reference only and should not be considered investment advice.
'Is the AI Stock God Born? High School Student Uses ChatGPT to Build His Own Investment Portfolio and Beats the Market and ETFs' was first published in 'Crypto City'.