Financial Reporter for SinoVision, Jing Wang, grabbed Lane Mendelsohn, President of Vantagepoint ai for a quick interview while he was walking by on the second floor of the New York Stock Exchange. News had just broken that the Dow had taken a huge plummet. Mendelsohn’s software is well-known in the industry for predicting these major drops and they were eager to see if his software’s AI technology had seen the drop coming.
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Lane Mendelsohn: Yes, so the name of the software is VantagePoint and what we’re doing is we’re using artificial intelligence technology to mine massive quantities of data in an effort to make highly accurate forecasts. So instead of looking at a single stock or a single commodity in isolation, we’re looking at a total global perspective. Looking at US markets, international markets, commodities, interest rates. As much data as we can possibly grab, we grab that, and using pattern recognition technology that we’ve patented, we’re able to use that to make those forecasts up to 86% accurate.
Jing Wang: Why would choose AI that … I mean it works much better than other technology?
Lane Mendelsohn: There’s really no other technology besides artificial intelligence that can consume that much data and process it and make sense of it. If you look at the Dow has sold off so much today, what’s the reason for it? Well, part of it has to do with interest rates. We saw the interest rates are rising. So you know that there is a relationship between interest rates and equities. But that’s just one very simple relationship. There are so many complex relationships that aren’t even so obvious. And so the only way to detect those patterns, the hidden patterns in data, is to use a mathematical tool like artificial intelligence. And that’s what we’ve been utilizing for almost 30 years now.
Jing Wang: Okay, so for my understanding, we just use AI to make decision without knowing all the calculation behind it or other?
Lane Mendelsohn: It still requires some common sense. So we’ve got different predictive indicators but when you see the indicators all pointing in a certain direction and you have that confirmation, then that’s a very high likelihood that a market is going to either go up, go down or, in some cases, the best trade is no trade. If the software is saying there’s not a clearly-defined trend, best thing to do is back away.
Jing Wang: Okay, so how to make profit for your own portfolio?
Lane Mendelsohn: Well, basically, there’s different strategies. You can have a short-term strategy, an intermediate-term strategy or a long-term strategy. So each day the software is going to predict what tomorrow’s high and low price is going to be for an individual stock or for the overall index. And so daytraders can use that to day trade, looking to either buy low, sell high or go short near the high and cover near the low of the day. For a more intermediate-term trader we have a two-day forecast that’s telling you what the trend direction will be over the next two days. And then even out three days we’re able to very accurately predict when a trend has either hit a top, a bottom and that’s how customers and traders are able to make their decisions about the timing and the direction of their trade decisions.
Jing Wang: Sounds very attractive for me actually. So do you have any philosophy of trading?
Lane Mendelsohn: Yeah, I think the most important thing is you’ve got to be educated and you’ve got to go in with a plan. So some people like, for example, we forecast for the cannabis stocks and we’ve been very accurately forecasting them. And some people think, wow, this is such a hot sector, let me just throw a dart and whatever I hit, I’ll buy it and it will go up. And that’s not happening. The last forecast scan that I ran, about 35% of the cannabis stocks that we forecast for using our AI technology, were actually forecasted to go down. And so traders and investors have to be very selective about what stocks they get into and not just think, well, it’s a hot sector, let me buy into it. And that’s really a key. You have to decide, am I investing in a company because I believe in their long-term future potential? Or am I just speculating and I want to catch a nice ride to the upside, a nice trend to the downside, and take a quick profit?
Jing Wang: Let’s talk about the stock market today because there is a big selloff. What’s the reason behind it, do you think?
Lane Mendelsohn: Well, I think there’s a couple of reasons. As I mentioned, interest rates rising always is going to have an impact. But there are other relationships, like I mentioned, with the US dollar, the strengthening dollar, the price of crude oil and other foreign currencies that are all driving and impacting what the Dow is doing. Now I’ll show you here, we actually forecasted last night, and you can see here-
Jing Wang: This is a chart from the software?
Lane Mendelsohn: This is a chart from the artificial intelligence software and what you see down below is on October 4 this indicator went from green to red, clearly indicating weakness. And the Dow did start dropping about four days ago. So that nailed the prediction in terms of the weakness that was starting to set in. But last night we had a crossover right there. So that was confirmed. So when you have this indicator go red and the indicator up above cross over, that’s a double confirmation, clear-cut indication that the Dow was going to go down today.
Jing Wang: So the projection is correct?
Lane Mendelsohn: Absolutely. It’s not always right. We have an 86% accuracy which, it’s not 100% and never will be 100% because there are always events that can happen that aren’t predictable, there are events that are random. But with 86% accuracy that really increases the probabilities of someone being able to make the right decision at the right time and ultimately be more successful.
Jing Wang: You also just mentioned about the pot stocks. Do you think it’s still okay to buy?
Lane Mendelsohn: You have to be selective. It is okay to still by the pot stocks but it depends on which ones. For example, you really should be looking for pot stocks that are established companies or companies that are producing a meaningful product or service. What you want to avoid is you want to avoid the pot stocks where they just wanted to ride the wave. They changed their company name to something cannabis so that they could ride the wave. Those companies are going to kind of go by the wayside. So you want to stick with the more mainstream companies. And of course, our artificial intelligence software has a lot of scanning features and can find which specific cannabis stocks are the ones that traders should be looking at.
Jing Wang: Do you want to give us an example like which one is okay to watch?
Lane Mendelsohn: Well, Aurora for example. We’ve been forecasting Aurora to go up since I believe it was August 13 and it’s gone up since then. It’s showing a little bit of weakness but by the end of this month I expect that Aurora will actually be listed on a US exchange as opposed to where it is right now on a Canadian exchange. And I think that’s going to push it even higher.
Jing Wang: Last question will be the trading war. So what do you think about the current trading war? Will that actually impact the US stock market in a long way?
Lane Mendelsohn: I think it will have an impact. Up until now we really haven’t seen much of an impact but the economy is so strong. The unemployment hitting, you know, it hasn’t been this low in 49 years. So I’m sure it’s having an impact and will but when you have such a strong economy and the markets have been so strong, that’s kind of covering up some of the impact that maybe we otherwise would have been seeing.
Jing Wang: How do you value right now Trump’s administration’s policy?
Lane Mendelsohn: It’s hard to say. And I really go by the numbers. I look at it from a technical perspective and using the AI indicators because that filters out a lot of noise. I don’t like to trade what I think or trade what I feel. I like to trade what I see. And that’s why I rely on the artificial intelligent indicators.
Jing Wang: Trump just said he hopes the stock market rallies so high. Do you agree with that?
Lane Mendelsohn: There are just so many factors, maybe it has an impact. I don’t think any one impact can claim credit for what the market has done.
Jing Wang: Thank you very much.
Lane Mendelsohn: Thank you very much.