Why AI Struggles When the Market Panics

Wiki Article

Joseph Plazo just reminded a room full of Asia’s brightest something Wall Street has been avoiding for years: AI may be fast, but it can’t judge the unexpected.

MANILA — Plazo didn’t come to praise AI. He came to shake people up.

On a humid Thursday morning at the prestigious AIM campus in Manila, Plazo stood before a sea of students from top Asian universities—AIM—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 quipped, “But you still don’t give the intern the keys to your vault.”

The room laughed. Then they stilled. 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, runs 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 what we expect from it. We keep hoping 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. Noise that shattered the signal.

### Smart Students Tried to Push Back—They Didn’t Win

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

Plazo answered without blinking.

“AI can catch 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 eyebrow.

“Conviction isn’t math. It’s instinct. It’s forged by failure and memory. You can’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 their soul.

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

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

- It filters noise.
- It backtests at scale.
- It tracks 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 care if your retirement burns.

“If your AI bot makes a bad call,” Plazo asked, “do you still own it? get more info 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 maturity. 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 choice.

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