Why AI Fails When the Market Panics

Wiki Article

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

MANILA — This wasn’t a pep talk—it was a strategic slap.

On a sweltering Thursday morning at the Asian Institute of Management in Manila, Plazo addressed a sea of students from top Asian universities—NUS—ready for a sermon on AI’s glory in finance.

What they got instead? A jolt of truth.

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

The room laughed. Then they grew quiet. Because he wasn’t joking.

### AI’s Blind Spot? Human Nature

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 on global markets. He understands machine learning like few do.

But that’s exactly why his warning landed like a punch.

“The problem isn’t AI,” he told the room. “It’s our wishful thinking. We keep dreaming it’ll save us from making hard decisions. That’s a fantasy.”

Plazo detailed real-world case studies—moments when AI signaled winning trades… right before a central bank pivot or an unexpected war. Events that didn’t fit the algorithm.

### Asia’s Best Challenged Him—and Learned Something

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

Plazo answered without blinking.

“AI can spot a tweetstorm. But it can’t hear fear in a press conference. It won’t catch regret in a central banker’s sigh.”

The room reacted. That hit different.

Another asked, “Can AI ever understand conviction?”

Plazo raised an website eyebrow.

“Conviction isn’t math. It’s instinct. 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 can’t automate your values.”

That line slapped. Because everyone in that room—from the copyright cowboys to the quant whizzes—wanted alpha. But not at the cost of why they started.

### AI’s Real Role? Powerful—But Limited.

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

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

But it can’t read sarcasm. It fails to sense 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 own it? Or do you blame the code?”

That’s when the silence hit.

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

Plazo wasn’t preaching finance. He was preaching self-leadership. 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.”

### Final Thought: Maybe the Future Needs Less Code—And More Courage

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 pause.

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