Fundamental stock picking is losing ground to systematic investing. But does that mean traditional active management is dead?
Dr David Allen, Head of Long Short Strategies and Co-Head of Research at Plato Investment Management, joins Ally to explain how systematic managers are using data, technology and AI to find opportunities across thousands of companies.
He takes us inside Plato's investment process, including the 154 red flags the team uses to identify short opportunities.
Plus, David explains why diversification can improve returns when systematic strategies struggle, and the one metric he believes every adviser should use when assessing quantitative managers.
Chapters:
00:00 Is Fundamental Investing Dead?
01:52 Why Traditional Stock Picking Is Changing
04:20 Inside the Black Box of Systematic Investing
07:25 Plato's 154 Red Flags for Identifying Risky Stocks
13:09 Separating Genuine Investment Signals From Noise
17:06 How Plato Uses AI to Analyse Markets
19:29 The Red Flags Emerging in Markets Today
25:34 Diversification, Performance and Choosing a Quant Manager
Stocks and Funds Mentioned:
Plato Global Alpha Fund, Echo IQ (ASX: EIQ), Allbirds (NASDAQ: BIRD), Meta Platforms (NASDAQ: META), DroneShield (ASX: DRO), Cettire (ASX: CTT), Tesla (NASDAQ: TSLA), Commonwealth Bank of Australia (ASX: CBA), GQG Partners (ASX: GQG), IBM (NYSE: IBM)
CPD Points: This episode is accredited by the Financial Advice Association of Australia (FAAA). Complete the CPD quiz ___ to claim your points.
Knowledge Requirements: Managed Investments (0.50 hour)
Legislated CPD Area: Technical Competence (0.50 hour)
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