05 Dec 1 Expert Systems as defined in the book are computer-

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Expert Systems as defined in the book are computer-based information systems that use expert knowledge to attain high-level decision performance in a narrowly defined problem domain. These systems emulate the decision-making ability of a human expert and are designed to solve complex problems by reasoning through bodies of knowledge. ES is used by major investors for a number of purposes like monitoring the stock markets by looking at how prices of the stocks vary, sell shares automatically, suggest possible trends on stock prices, etc.

In regards to the question, as an investment advisor for stock investment, I would order a copy of the Expert Systems that would help me identify the most undervalued securities on the market with the best timing for buying and selling those securities. I personally do not have proper knowledge of stock market investments, therefore, my logic behind ordering this particular ES is that it would help me determine what securities to buy and sell at low cost since they are undervalued. On the other hand, I should also be mindful that if the ES is available generally and is used by numerous investors, those undervalued securities will no longer be undervalued, as they will be bought raising their prices. However, I would still purchase the ES to get an idea of the undervalued securities in the market.

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I would probably shy away from purchasing an Expert Systems for stock investment that focuses on these undervalued securities and optimal timings for purchases and sales. The main reason for this reluctance is the fact that, if this software does accurately evaluate and predict these things, it is bound to attract plenty of users willing to pay the required annual license and make use of the software. Since the ES focuses specifically on the most undervalued securities, anyone that works with the software would be alerted to the stock and purchase or sell according to the evaluation. This, in turn would result in a sharp rise in value for these supposedly undervalued securities. So, given enough time, this software might become either less accurate or vastly misleading. Unless I were able to beat everyone else to the stock in order to buy and wait for the optimal selling window, if enough other people are alerted to the exact same stock, this would dramatically shift the true value away from the software’s initial evaluation. So selling the stock after people rush in to buy might result in vastly different profit/loss margins when compared to the ES’s initial claims. I feel like this software would not make for a suitable primary investment advisor due to the volatile nature of the predictions and evaluations given enough commercial users. A private software would seem more suitable and stable in this regard.

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