Human investors who have tried to copy Buffett have mostly failed miserably, but now artificial intelligence is trying to solve the problem. Investment startup Intelligent Alpha is working on launching the Intelligent Omaha ETF (ticker: AIWB), which relies on artificial intelligence to mimic the investment philosophy of Berkshire Hathaway CEO and create a list of 25 stocks it thinks Buffett might buy. -An investment portfolio composed of 30 stocks. So, how exactly does it work? The first step is to provide artificial intelligence (three large language models, GPT, Gemini and Claude) with enough information to understand the nature of Buffett. This includes any public writings (Buffett’s famous annual letters since the 1960s), any public interviews or statements he makes, and regulatory filings such as 13Fs disclosing Berkshire’s public equity holdings. “If you feed an artificial intelligence a lot of information about how you want it to think and how you want it to respond and think about the world, it will perform that role perfectly in our tests,” said Doug, CEO and founder of Intelligent Alpha. Doug Clinton is interviewing. It remains to be seen how well artificial intelligence will be able to understand Buffett’s unique investing style, which has evolved significantly over seven decades. At first, he only bought “cigar butts,” i.e., extremely cheap securities, in order to make quick profits. Later, under the influence of the late Charlie Munger, he focused on quality companies with “wide moats” that were sold at fair prices. . Now that Berkshire Hathaway’s market value is approaching $1 trillion, fewer and fewer investments are driving the conglomerate, which is partly what prompted Buffett to go all-in on Apple. Not to mention, Buffett’s reputation as one of the savviest and cash-rich investors has allowed him to personally negotiate many lucrative deals, especially during crises. “The Omaha strategy is very much built around value in the context of Buffett, trying to find companies that are here to stay over the long term,” Clinton said. All About Artificial Intelligence Intelligent Alpha has been testing its Buffett strategy for six months, and the AI-integrated portfolio will overlap Berkshire’s portfolio by 30% to 60%. The same stocks may have different weightings in the ETF, which would charge an expense ratio of 69 basis points. The fund will first launch within the next six months. The company already has an AI-powered ETF on the market, the Smart Livermore ETF, which aims to emulate the methods of more than a dozen famous investors, including Buffett, Stanley Druckenmiller and David Tepper. The fund began trading last Wednesday. The products mark Wall Street’s latest attempt to incorporate popular artificial intelligence applications into products to attract investors curious about what advanced technology can produce. Artificial intelligence has been the hottest investment theme of the past two years, with stocks like Nvidia among the biggest beneficiaries, but many remain skeptical of its staying power and impact on daily life. “Intelligent Alpha’s vision is to create an AI-powered BlackRock,” Clinton said. “There are two pillars, one is servicing retail investors (through registered investment advisors) and the other is servicing institutional investors.”
