This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Digital Skeptic: Job-Killer Robots Target Analysts Next

RoboAnalyst says "Buy!"
For Parker, it's not a question of if human investors will rely less on human analysis, it's how much they already do. Mimicking the mind of analysts to extend their reach, while not exactly trivial, is not exactly rocket science either.

"The big trick is to realize that what we call a report is not a report, but a series of diagrammable subgenres like chapters, sections, paragraphs or whatever," he said. "And once you get to that last subgenre, you've written a formula."

It's a process Parker says is well within the reach of larger enterprises and investing firms and, more and more, even the rank-and-file investor.

Without question, the most interesting of the firms behind such processes is Durham, N.C.-based

Automated Insights. The firm has created its own proprietary content creation algo that produces written analysis and trend forecasting based solely on the numbers financial markets create organically.

"We produce content with nothing but data as the input," Robbie Allen, founder of the firm, told me via email.

Allen explained that his technology looks for relative change in financial data and assigns a qualitative value to that change, which is captured and rendered in English. Cormac McCarthy it is not, but we've all read worse. And business is growing. The company already provides similar content to Yahoo! (YHOO) Sports based on sports box scores.

"We are talking to a couple of companies about personalized portfolio recaps," Allen said.

But the growing reach of automated analysis is not limited to science fiction-like operations such as Automated Insights.

Boston-based

Trefis creates what it calls a "meaningful financial community" based on the components of the price of a stock -- but with a fascinating, automated, intelligent analysis twist. The firm, with less than 50 people, uses technology developed by MIT grads to extend the analytical reach of its team of human analysts. It offers a variable target price for a stock based on complex scenario analysis of the value components of that stock. And it does it for more than 200 popular equities. And in real time.

"Our forecasts and the corresponding rationale are transparent to all," says the company website. "And each forecast assumption that has an impact on the Trefis price is modifiable by users."

Go take a look and tell me what humans can do that. It's pretty darn impressive.

Just another collapsing market
What's getting plain old sad is how there's nothing particularly unique about the decline and fall of the financial analyst empire. As in music, publishing and other sectors in financial services, it turned out that creating written reports and doing the valuations are handled just fine by machines.

So just like any other blogger, lawyer or banker, the once invulnerable Wall Street analyst will have to get right with life in this Dark Age 2.0. Working harder to stretch ever-thinner resources to meet the rising demand of output, and all the while living with the odd wonder of wondering what algorithm finally takes at his or her job altogether.

As Parker puts it, "Analysis is simply too simple a problem."

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs