Forbes: AI trading tech finds signals in the noise

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When JAAIMS launched Australia’s first AI-directed trading application in 2019, investors and consumers baulked at the words ‘artificial intelligence’. Today, they’re flocking to it. Jaaims CEO and founder, Tui Eruera, discusses the turnaround and how AI trading technology will handle geopolitical uncertainty in 2024.

AI has swept into public consciousness in the last year or so, but Jaaims, which is built on AI technology, was founded in 2019. It must have been a wild ride.

Absolutely. When we were trying to raise capital five years ago, we kept being told nobody would trust AI because they instantly think of Terminator. When we started on-boarding customers, people would panic as soon as we mentioned AI, saying things like, ‘What happens if the AI goes rogue and buys all these positions and loses all my money?’

We had this fabulous technology, but everyone was scared of AI. So, we decided in 2021 to stop referring to ‘AI’. We just said, ‘Advanced technology.’ And as soon as we did that, we started getting customers. Full circle to 2023 and 2024, AI is what brings customers now. People are interested in understanding how the technology works and how we use it.

And how do you use it?

(Laughing) In a nutshell?
Our AI trading program builds a predictive model based on individual stocks using years of historical data – everything from technical fundamentals to news and announcement data is used. The reason why it’s so powerful is it constantly learns from prior decisions and results and applies them to the next decisions. It’s different from algorithmic trading because it doesn’t follow a set of predetermined rules. It’s far more dynamic.

Nearly half the world is going to the polls in 2024. Everyone’s talking about geopolitics and how portfolios will fare. How does AI trading tech parse this kind of global uncertainty?

It’s a great question. We’ve been talking about how Jaaims uses AI, but AI stocks (and tech stocks in general) are actually great examples of how our technology differentiates us from a managed fund. We’ve ridden the AI boom in the last 12 months really well. Why? Because we were buying tech stocks when everyone was playing defensive as the perception was a hard landing was coming.

One of our founding principles was to eliminate human bias from trades. Although analysts try to
be neutral, human bias does affect their decisions and analysis. Our technology doesn’t talk to people. It doesn’t get influenced by investor days or media. It uses real data to drive decisions.

If we bring that back to the question of geopolitical uncertainty, the same principle applies. The technology will be influenced by the relevant data. That is company data, projections, and also the macro environment. It doesn’t get caught up in modelling the ‘what-ifs’.

Can you unpack that? How does your technology avoid ‘what-ifs’?

Sure. One clear indicator is our average hold time. We hold a position for anywhere from about 21 to 110 days. That means that when we buy a stock, we’re only looking at the next 100 days. Other people might look at the ‘what ifs’ of two years ahead, but we aren’t holding positions for two or three years. This means we’re hyper-focused on what is happening now. What is the market telling us? What stocks are undervalued in this current climate? If you dig into the data, you can get a clear indication of what the next three to six months look like. That’s the core strength of what we do. We focus on what we do well and block out the rest.

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