Why AI Struggles When the Market Panics

Why AI Struggles When the Market Panics

Blog Article

Joseph Plazo just reminded 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 — 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—NUS—ready for a sermon on AI’s glory in finance.

What they got instead? A splash of cold market reality.

“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 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 why his warning felt urgent.

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

Plazo shared 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 spot a tweetstorm. But it won’t sense dread in a press conference. It won’t catch regret in a central banker’s sigh.”

The room exhaled. Message received.

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 why they started.

### website So What’s AI Good For?

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 won’t grasp 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? Or do you blame the code?”

That’s when the silence hit.

### This Isn’t About AI—It’s About You

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 mirror.

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