Why AI Struggles When the Market Panics

Why AI Struggles When the Market Panics

Blog Article

AI trailblazer Joseph Plazo just told a room full of top-tier future analysts something Wall Street has been avoiding for years: AI may be powerful, but it’s not wise.

MANILA — He didn’t show up to sugarcoat things. He came to crack illusions.

On a sweltering Thursday morning at the Asian Institute of Management in Manila, Plazo addressed a sea of students from top Asian universities—Kyoto—expecting a sermon on AI’s inevitable rise.

What they got instead? A masterclass in humility.

“AI is like your smartest intern,” Plazo quipped, “But you still don’t give the intern the keys to your vault.”

The room broke into giggles. Then they stilled. Because he was dead serious.

### The Flaw in the Code: No Judgment

Let’s be clear—Plazo isn’t some Luddite clinging to the past. He designs trading AIs. His firm, Plazo Sullivan Roche Capital, powers some of the most accurate systems across global markets. He understands machine learning like few do.

But that’s exactly why his warning cut deep.

“The problem isn’t AI,” he told the room. “It’s what we expect from it. We keep believing it’ll save us from making hard decisions. That’s not its job.”

Plazo unpacked real-world case studies—moments when AI signaled winning trades… just ahead of a central bank pivot or an unexpected war. Moments no dataset could foresee.

### Even The Bold Questions Got Burned

A student from Kyoto asked if LLMs might someday gauge global sentiment.

Plazo grinned.

“AI can catch a tweetstorm. But it won’t sense dread in a press conference. It misses regret in a central banker’s sigh.”

The room oohed. That hit different.

Another asked, “Can AI ever understand conviction?”

Plazo raised an eyebrow.

“Conviction isn’t math. It’s gut. It’s forged by failure and memory. You don’t download that.”

### Plazo’s Words = Financial Therapy

This wasn’t about flash trading or chatbots. It was about ethics.

Students admitted they saw AI as a cheat code—an escape hatch from risk, from thinking too hard. Plazo called it out.

“You can automate your trades. You will never automate your judgment.”

That line landed. Because everyone in that room—from the copyright cowboys to the quant whizzes—wanted alpha. But not at the cost of their sense.

### Give AI the Tools—Not the Steering Wheel

Plazo didn’t trash AI. He credited its strengths:

- It filters noise.
- It backtests at scale.
- It detects technical setups better than any human.

But it can’t read sarcasm. It won’t check here grasp when a politician is bluffing. And it doesn’t know if your retirement burns.

“If your AI bot makes a bad call,” Plazo asked, “do you still accept blame? Or do you blame the code?”

That was the mic drop.

### Trading is Human—AI is Just the Tool

Plazo wasn’t preaching finance. He was preaching accountability. Use AI—but don’t worship it. Let it assist—not decide.

And yes—he still believes in the machines. He’s building tools that track geopolitics, misinformation, even psychological nuance.

But he left no doubt:

“No machine can tell you when *not* to act. That’s your job.”

### In a World of Signals, Be the Noise You Trust

As the crowd filed out—buzzing, challenged, changed—one phrase echoed down the halls:

“AI doesn’t know your values. So don’t let it make your decisions.”

In a world chasing speed, Plazo offered something rarer:

A mirror.

Because investing isn’t just about *winning*. It’s about knowing **why** you played.