The world of investment management is no stranger to predictive gimmicks. There is always some enterprising broker or analyst telling investors he or she has uncovered the way to predict tomorrow’s stock spikes tonight. It’s usually hot air — there are too many variables for a human’s mind to calculate. But what about a machine’s mind?

Prashant Bhuyan, co-founder, CEO and chairman of Alpha Modus Research LLC, said, “Many professional investment managers, many of whom are very, very smart people, are having a lot of difficulty generating alpha these days.” (Alpha is a fund’s excess return relative to a benchmark index’s return.)

“Alpha is beating the market on a risk-adjusted basis,” Bhuyan told John Furrier (@furrier) and Dave Vellante (@dvellante), co-hosts of theCUBE*, from the SiliconANGLE Media team, during the IBM World of Watson event. “And the reason that they’re having difficulty beating the market on a risk-adjusted basis, in our opinion, is because they’re drowning in information,” he explained.

Bhuyan spoke about the new “taxonomy” that his company developed: Curated imbalance indicators from the floor of the New York Stock Exchange together with unstructured data from thousands of sources.

“We apply the domain expertise to the ‘awareness cloud’ to create a point of view or perspective and then fuel our building blocks, which are APIs that we then sell to enterprises,” Bhuyan stated. “You can figure out what’s real and what’s driven by just sentiment. That relationship is very interesting.”

White matter, grey matter, blue matter

Bhuyan said they employ IBM Bluemix and Watson on the back-end as the brains for its APIs.

“They migrated Watson to the cloud, and they were offering it to developers as a service. And that was truly a paradigm shift, because suddenly we could ask more sophisticated questions than ever before,” he said.

Watch the complete video interview below, and be sure to check out more of SiliconANGLE and theCUBE’s coverage of IBM World of Watson 2016.

*Disclosure: IBM and other companies sponsor some IBM World of Watson segments on SiliconANGLE Media’s theCUBE. Neither IBM nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.

Photo by SiliconANGLE