Rebellion Researchs chairman, Alexander Fleiss, sent Institutional Investor a quick e-mail on October 12.
Our AI technology thinks we will have one of the biggest market rebounds of the last 10 years, he wrote.
He was right on the mark: The S&P 500 rose 11 percent during October, the biggest percentage gain of any month in the past 20 years. Rebellions young founders Fleiss is joined by his Amherst College classmates Spencer Greenberg, Jeremy Newton and Jonathan Sturges have placed their investing faith in artificial intelligence, the same technology behind IBMs Watson, which beat Ken Jennings on Jeopardy.
One of the benefits of our system is that its not emotional, says Sturges. Like Watson, Rebellions AI technology has the ability to learn from its past predictions to become more efficient in this case in how it searches for undervalued stocks.
Rebellions AI brain currently favors companies in the health care and chemicals sectors, and small-cap stocks that got hammered during the recession. The potential for machine learning is huge, says Greenberg.