No. 04 · The exchange
AI Investing
An AI reads filings like Buffett and values quality companies. It buys only when the price is right. This page logs every trade and judgment daily.
- Status
- Open
- Account
- Paper money, at Alpaca
- Benchmark
- SPY total return
- Updated
- Snapshot of Oct 23 close
+7.47%
AI portfolio since Sep 28, paper money
−0.74%
S&P 500 (SPY) same period
+8.21 pp
Ahead of SPY
−0.85%
Worst drop, Oct 22 to Oct 23
44%
In cash, waiting for prices
19 days
Trading days live
Learnings: 8 logged, 6 fixed See all11 trades, each tied to its judgment
Ahead of the S&P 500 since the first trade
Account value vs SPY total return, both set to 100 at the Sep 28 close.
- AI portfolio
- SPY total return
- Trade day
- Worst drop
AI portfolio +7.47% versus SPY −0.74% since Sep 28, across 19 trading days. The chart needs JavaScript to draw.
How to readGreen fill means ahead of SPY, red means behind. The lower strip shows the cash share.
NotePaper money. Not investment advice.
SourceKernel nav table, Alpaca paper fills.
Daily log
Tap a day to mark it on the chartNo trades today.
Judged 11 companies; 0 cleared the 8% bar.
New judgments: 16. None cleared 8%. Best: CME at 6.5% a year.
New judgments: 8. None cleared 8%. Best: MSCI at 6.6% a year.
New judgments: 5. None cleared 8%. Best: MMM at 4.0% a year.
New judgments: 1. None cleared 8%. Best: COST at 3.1% a year.
New judgments: 3. None cleared 8%. Best: MRSH at 6.4% a year.
New judgments: 5. None cleared 8%. Best: CVS at 4.0% a year.
Learning
The emergency stop could report done while orders were still live.
New judgments: 1. None cleared 8%. Best: PG at 5.3% a year.
New judgments: 1. None cleared 8%. Best: SYK at 5.9% a year.
Learning
Book and broker share counts could drift apart unnoticed.
Learning
Book fills record about 5 bps worse than the broker's real fills.
Learning
The paper broker never pays dividends.
New judgments: 5. None cleared 8%. Best: CI at 7.0% a year.
New judgments: 2. None cleared 8%. Best: EOG at 4.0% a year.
Error fix
Sold back 29 BKNG shares bought in error on Oct 8. Fixed Oct 15 (v0.25.8).
Learning
Bought twice the intended BKNG position, then trimmed it the next day.
New judgments: 2. None cleared 8%. Best: GD at 5.1% a year.
Bought
Bought BKNG, 63 shares. The price had fallen under its buy-up-to price of $156.44 ().
Dividend
INTU dividend: $1.38 a share on 34 shares, $46.92. The book credits it on the ex-date. The paper broker pays none.
New judgments: 9. None cleared 8%. Best: MCK at 7.0% a year.
New judgments: 3. None cleared 8%. Best: SYK at 6.3% a year.
New judgments: 4. None cleared 8%. Best: DRI at 6.5% a year.
Part 2 of 2
Bought RMD, part 2 of 2 of the Oct 2 order: 43 shares. .
New judgments: 4. None cleared 8%. Best: ORLY at 5.0% a year.
Bought
Bought ADBE, 39 shares. at 9.0% a year, over the 8% bar.
Added
Added 17 INTU shares. This is the one top-up its allows.
Part 1 of 2
Bought RMD, part 1 of 2: 42 shares. One order is capped at 10% of the account. .
Learning
ADBE's buy and an INTU top-up went out Oct 2, days late.
Learning
RMD's Oct 2 order filled at $223.53, above its $222.10 buy-up-to price.
New judgments: 5. 1 cleared 8%: CI. CI cleared 8%, but conviction was 2 of 5. Buying needs 3.
New judgments: 3. None cleared 8%. Best: CBOE at 6.0% a year.
Added
Added 48 PAYX shares. This is the one top-up its allows.
Error fix
Sold back 42 RMD shares bought in error on Sep 29. Fixed Oct 15 (v0.25.8).
Learning
Bought RMD on Sep 29, sold all of it the next morning, rebought Oct 2.
New judgments: 141. 4 cleared 8%: ADBE, INTU, PAYX, RMD.
Bought
Bought INTU, 17 shares. at 9.0% a year, over the 8% bar.
Bought
Bought PAYX, 47 shares. at 8.5% a year, over the 8% bar.
Bought
Bought RMD, 42 shares. at 8.0% a year, over the 8% bar.
Five holdings, almost half in cash
Each holding with its judgment, buy-up-to price and exit plan. Oct 23 close.
How to readThe rail runs from the AI's low to high value. Left of the dashed line clears 8%.
NoteOpen holdings are marked at the last close, so their returns are estimates. A sale makes them final.
SourceAlpaca paper positions, kernel lots table.
Most judgments miss the 8% bar
Each dot is one AI valuation, as expected yearly return at that day's price.
- Held now
- Cleared 8%, not bought
- Judged, under the bar
- 8% buy bar
241 valuations across 149 stocks; 6 cleared the 8% bar. The chart needs JavaScript to draw.
A judgment is a standing order. If the price falls, it can clear 8% later. BKNG did: judged Sep 29 at 7.5%, bought Oct 8 under $156.44.
149 valued is more than 143 passing today. Some valued stocks have since failed a gate.
How to readDots above the dashed line cleared the buy bar.
NoteSep 29 is the first full pass over all survivors.
SourceKernel v4 ledger, live arm.
What went wrong, and whether it is fixed
8 logged. 6 fixed, 2 watching, 0 open. Every error stays on the record.
Changed in code. The chip names the version and date.
Known and measured daily. Not changed yet.
Not fixed. Still affects the numbers above.
| Date | What happened | Lesson | Trades | Status |
|---|---|---|---|---|
| Sep 30 | Bought RMD on Sep 29, sold all of it the next morning, rebought Oct 2. | A missing price was filled with the prior close. That put RMD exactly on the 8% line. The real price next morning was higher, so it sold. Cost about $115. | Fixed Oct 15 (v0.25.8) | |
| Oct 2 | ADBE's buy and an INTU top-up went out Oct 2, days late. | The morning step skipped orders with no usable quote, without a warning. Cause inferred from code, since quotes were not logged. | Fixed Oct 14 (v0.25.5) | |
| Oct 2 | RMD's Oct 2 order filled at $223.53, above its $222.10 buy-up-to price. | Buy limits had no cap at the 8% price. That slice earned 7.93% a year, just under the bar. | Fixed Oct 16 (v0.28.1) | |
| Oct 9 | Bought twice the intended BKNG position, then trimmed it the next day. | A 5% target in the book became 10% for the broker account. One extra round trip. | Fixed Oct 15 (v0.25.8) | |
| Oct 13 | Book and broker share counts could drift apart unnoticed. | Any share mismatch now blocks new orders until the two agree. | No trade | Fixed Oct 13 (v0.25.3) |
| Oct 13 | Book fills record about 5 bps worse than the broker's real fills. | On fills alone, broker cash runs about $40 ahead of the book. Small, tracked daily. | No trade | Known, monitored |
| Oct 13 | The paper broker never pays dividends. | The book credits each dividend on its ex-date, like SPY total return. So book cash runs ahead of the broker by every dividend. | No trade | Handled in the book, gap tracked |
| Oct 15 | The emergency stop could report done while orders were still live. | Stop now holds until broker and book are both flat, confirmed. | No trade | Fixed Oct 15 (v0.25.7) |
How it works
- 1. Universe
Top 500 US companies by market value, rebuilt every morning.
- 2. Five quality gates
Return on capital of 20% or more. Earnings cover interest six times. Retained earnings add value. A $10M profit floor, and little dilution. About 140 pass.
- 3. AI valuation
When a survivor files news, the AI values it from the filing.
- 4. Buy rule
The AI estimates a yearly return at today's price. It buys at 8% or more.
- 5. Re-tested daily
Every judgment is re-tested each morning. A lower price means a higher return.
- 6. Conviction sets size
Conviction 3 buys 5% of the account. 4 or 5 buys 10%. One top-up per filing. No stock above 20%.
- 7. When it sells
Not because a price rose. It sells if the business breaks, or the price passes its sell line.
- 8. Timing
Prices are judged at the close. Orders go out the next morning, ET.
- 9. Two shadow AIs
Two more AIs judge the same filings. One has no web search, one sees no names. They never trade.
The cost of the rule: long stretches in cash while prices stay high. Today 44% waits in cash.
Backtest
Would more AI judgment beat these rules? We tested 2017 to 2025. Read the results.
Rule changes
- Oct 16Buy limits are capped at the 8% price.v0.28.1
- Oct 15A missing price no longer stands in for a real one.v0.25.8
- Oct 15Order size follows the book, not the broker account.v0.25.8
- Oct 15The emergency stop holds until broker and book are flat.v0.25.7
- Oct 14An order with no usable quote now raises a warning.v0.25.5
- Oct 13Any share mismatch blocks new orders until fixed.v0.25.3
Method: returns are account value including cash, from the Sep 28 close. SPY is total return with dividends. The book also credits each dividend on its ex-date. The page never annualizes a period under a year. Paper money at Alpaca: simulated fills at real market prices. No commission on paper fills. The paper broker pays no dividends (see Learnings). Times are in ET. Not investment advice. Download the data (JSON).