The knowledge and resource gap between institutional investors and retail investors widens each year. That’s why Levelfields built a game-changing platform for self-directed investors to level the playing field.
In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Andrew Einhorn, Co-Founder and CEO of Levelfields, a technology that screens millions of signals related to over 6,000 stocks, sifting through the noise to find those events that affect prices, and using historical data to expose patterns and put those events into context.
In this episode, you will learn:
- What Levelfields is, and how it revolutionizes investment research, making it accessible to a broader audience.
- What event-driven investing is, and how AI plays a pivotal role in uncovering profitable patterns.
- How AI can locate new investment opportunities.
- And more!
Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
In the face of unprecedented market volatility prompted by the 2020 pandemic, institutional investors seized opportunities through insightful pattern recognition, reaping significant profits. Andrew recognized the potential of AI in democratizing access to these valuable insights. Leveraging his expertise in information architecture, data science, and strategic communications, he spearheaded the development of the first AI event intelligence platform. This platform can not only uncover but also forecast the impact of events on stocks, empowering investors of all backgrounds.
Andrew, welcome to the show.
Thanks for having me, Marc.
Can you start off by explaining what Levelfields is, including how it combines AI and investing, and how it works?
How Levelfields Combines AI and Investing
In plain English, Levelfields solves the problem of trying to monitor the market at scale while being one person.
If you’re not Goldman Sachs or a hedge fund with 200 analysts, it’s very hard, if not impossible, to keep track of 6,300 stocks traded on the New York Stock Exchange and the NASDAQ. With AI, that actually becomes possible for the first time, and that’s what we’re doing.
Our AI tracks every event that happens in the market. So what do we do with that? Well, we’ve all been in a situation where some event happened to a stock that we owned. We see the news headline, and it sounds really bad, so we get out of our position. The next day, or soon thereafter, the stock is up. We go, “Oh man, I blew it. I lost money on that one.”
What we do is provide analytics that showcase how any event normally impacts stocks. So, for example, when Jeff Bezos leaves Amazon, people don’t flee their position in Amazon and regret it afterwards.It’s very much like weather forecasting for stock events.
The idea behind Levelfields is relatively simple – we’re trying to give people better analytics and understanding of what’s moving the share price, why it’s moving and showing how it typically moves.
We’re able to do this because behind the market are humans, and humans follow patterns. AI is just picking up on those patterns.
What Event-Driven Investing Is
Everything that happens in the market is driven by events. The event could be:
- The Federal Reserve raising interest rates,
- A war breaking out in the Middle East, or
- A company announcement.
At Levelfields, we’re doing pattern recognition on those events. We aggregate them and display them. There’s no black box algorithm. Our users can see them in plain sight, and see how much a specific stock typically moves based on the event type.
Unfortunately, we live in a world where information is so pervasive that there’s actually too much of it. Information comes from the companies, the news, newsletters, opinion websites, Twitter, friends, family, colleagues, and so on. How do you sort through all of this information in a way that makes sense? Most investors need help.
How AI Can Locate New Investment Opportunities
The average investor can name 20-30 stocks, at most. And everybody buys the same ones – Tesla, Nvidia, Microsoft, Apples – but if you really want to make money in the market, you have to find those sort of underlying bull markets and industries that nobody really knows about.
When you have an AI system that’s constantly looking for certain types of events that are prone to move the share price, you can start to see patterns. For example, we started seeing stocks show up in the system that were increasing their dividends and doing stock buybacks by huge amounts. I hadn’t heard of any of these stocks. They were fertilizer companies – an industry I’d ever really invested in. I looked at them and thought, ‘Why are they crushing earnings? Why are they having monster buybacks? What is going on?’ I used that as a starting point and did a quick search for what they provided.
Eventually, I learned that there was a huge spike in sodium potash, a type of fertilizer, a third of which comes out of the Ukraine/Russia area. But, because of the war, it’s been harder to get. So, these American companies began producing sodium potash and in doing so, they raised the price. It was simply supply and demand. All of a sudden, these companies were pouring in all of this cash, which they used to reward the shareholders with buybacks.
These are the types of opportunities that AI can discover.
One of the things I hear a lot is that by the time a company has a good earnings quarter and releases that information to the public, a lot of the good earnings are already priced into the stock. How does AI try to get ahead of some of this information?
By looking at events. Our AI looks at historical events and how they have affected stocks in a particular sector or industry. You’re shown an average of how stocks move over a period of time.
Oftentimes, the event is day one. Day two, you would see a sell off. But the further out you go, the less of a correlation there is with that one event. So, that allows you to have a larger viewpoint. Say a buyback just happened. You can ask yourself:
- What should I do?
- Is it good?
- Is it bad?
- How should I react?
The stock might already be up 10%, and if the average buyback is driving up 6%, then you know it’s probably too late to get in. Mathematically, the odds are stacked against you. That information is just as valuable.
Let’s use an example. Say I’m interested in Apple stock and The Federal Reserve is meeting next week to discuss whether interest rates are going to go up or not. Will Levelfields be able to tell me, as an investor, what potentially could happen to Apple if the Fed does raise rates?
In the future, yes. Today, no. That’s sort of the macro to micro view that we want to build into Levelfields. Right now, we’re focused more on what the companies are doing themselves.
For example, if Apple has an upcoming product launch for the iPhone 15, you could go into the system and see what the last 14 launches looked like – how they impacted the share price.
There’s a good number of traders that think that when Apple comes out with a new iPhone, it’s going to be a game changer. They think the stock price will go gangbusters, so they buy in. But that’s not always the case, Apple could fall flat. So our system would help before an event like that.
Other people might use it for something like CEO departures. This morning, Morgan Stanley’s CEO left. The stock price usually falls a little bit after a CEO departure, but for a big company like that it’s likely not that big a deal. But, as a Levelfields user, you can subscribe to the strategy of a CEO departure. It sets an alert, and you’ll get notified when one occurs. Basically, it works as a customized AI news alert. We have all the usual filters and metrics that we would see in a Yahoo Finance type of website.
Wow, that’s really interesting. Thanks for sharing this information, Andrew. Well, we’re just about out of time. I want to thank you for being on the show today. How can listeners find out more about Levelfields?
Your listeners can go to Levelfields.ai, and I have a promo code that they can use for a discount: Podcast23. The subscription is crazy cheap right now, only a couple hundred bucks a year. That boils down to about 63 cents a day.
Great, we’ll link to that in the show notes. Thanks again, Andrew. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.