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Algorithms and AI-Driven Robo-Investing Won’t Kill Us

A letter from the desk of President & Publisher Ed Coburn on the value of experience and the art of investing in an AI-driven world.

AI Robot

When I tell people I run a research publishing business I get a mix of responses, but mostly it’s somewhere between sympathy and pity.

They’ve read about the struggles of the newspaper industry. They know the once-great magazine brands have fallen on hard times or disappeared completely. They probably know the book industry is harder than ever even though there are more books published annually than ever before. They certainly know that independent bookstores, and even the bookstore chains, have largely gone away. And they certainly know journalism careers are risky and underpaid.

They may also know that Google/Alphabet has absorbed the majority of advertising dollars and that Facebook/Meta and Amazon are scooping up much of the rest, leaving little for traditional publishers and media.

And, regardless of their political views, they are increasingly likely to feel that media players are chasing shock and outrage as the best path to profitability.

The fact is, these impressions are not entirely off base. Much of it is accurate.

So why am I smiling?

Because I know something they don’t.

The massive hit publishers have taken since Google absorbed so much of the advertising dollars doesn’t affect Cabot Wealth Network. Our revenue comes from selling subscriptions to readers like you. 100%. We don’t sell ads and we take no sponsorships. We don’t promote brokerages, private placements, penny stocks, or anything else.

Why does that matter to you?

That is important because it means our only interest is your investing success. If our services don’t help our readers become better investors, people tend to stop subscribing. And, our customers stay with us when we do our job well. That’s what we’ve done since 1970.

And I am confident that will be true for the next 50 years and beyond.

How can I be so sure?

I know Cabot will still be around, helping investors like you because investing is part science and part art. AI and robo-investing tools can do a great job on the science part. Where they fall short is in the art of investing.

I have already written about the impact of AI on productivity and how that will drive value creation. In the coming 20 years, we will see productivity growth, driven by AI, that will match or exceed productivity growth in any period in human history.

Because these technology tools use algorithms and what is effectively crowd-sourcing to make their “judgments,” they inherently follow the crowd. As has been shown many times, there is wisdom in crowds that can produce better answers than any individual person in some circumstances.

There are investing situations where following the crowd can work. If your goal is to preserve your capital, following the crowd is a good way to get average returns and can be accomplished by investing in broad-market index funds. Similarly, buy-and-hold investors who want to purchase dividend stocks and keep them for 20, 30, 40 years or more may be able to generate a nice income and more or less preserve their capital at the same time.

Many investors have more ambitious goals, however, and aren’t content to just preserve capital or get a modest dividend yield. These investors know wherever the crowd goes, however wise it is, there are places the crowd doesn’t go that may be better opportunities.

This happens every day as sectors and stocks rotate in and out of favor for a million reasons, or seemingly no reason at all. When the crowd rotates out of a sector for instance, value investors often find that a stock that had previously seemed over-priced has now become a bargain.

This is a reflection of the heterogeneous nature of investor goals. Some seek to grow wealth – and some of those investors seek modest growth at modest risk while others seek extreme growth, risk be damned. Some seek income. Some seek asset stability and security. These differing goals all suggest different strategies of course.

Quite simply, the market is too efficient and investors too diverse for it to operate in a monolithic fashion.

And, just as investing goals and investing opportunities will never go out of fashion, there will always be a need for solid, expert advice that will help investors better meet their needs, with greater profits and lower risk.

When Cabot Wealth Network got started back in 1970, the method we used to get this information and guidance to our customers was printed newsletters, sent in the mail. Fax technology came along and we offered some information that way. This was, in turn, replaced by email, a robust website, and SMS text messaging for our options trading services.

At Cabot Wealth Network our commitment to you is we will always be here to provide you with expert investing insights and market analysis plus a range of recommendations to help you meet your goals. We will always do that in the best way possible. If that means transmitting our services to your VR glasses, or even directly to some future technology you implant in yourself, we’ll be there to help you achieve investing success.

As we have for more than 50 years, we will continue to be here to help put a smile on the faces of our customers. And that makes me smile.


Ed Coburn has run Cabot Wealth Network since 2018 when he bought the company from longtime friend and colleague Tim Lutts. Ed is a graduate of Cornell University and holds an MBA from the Olin School of Management at Babson College. His career has brought him into many different sectors of the economy, from software and healthcare to transportation and manufacturing, and even oil spills. He is active in the Financial Media Association, a past Director of the Software & Information Industry Association, a member of the American Association of Individual Investors, and a frequent speaker at industry events.