AINL#008 Augmented Intelligence in Investment Management Newsletter
Welcome to the 008 Edition of the Newsletter on Augmented Intelligence in Investment Management (AINL). Every two weeks, we deliver five unique insights tailored to empower investment decision-makers. Our insights are carefully curated by a seasoned team of market specialists. Unbiased, actionable and practical. They will help you navigate through the noise.
AINL#008 SYNTHESIS
What do these recent developments mean for investment decision-makers?
1. The Role of Probabilistic Thinking and Human Oversight in AI-Augmented Decision-Making
Investors must refine their ability to assess payoffs and probabilities as AI-driven tools become more integrated into financial decision-making. While AI can enhance efficiency and reactivity, Mauboussin’s work underscores the importance of human judgment in estimating value gaps and variant perceptions. Additionally, the misperception of AI alignment suggests that investors cannot fully rely on AI’s economic decision-making without critical oversight. AI models must be seen as decision-support tools rather than autonomous decision-makers, with professionals ensuring that model-driven insights align with real-world investment strategies.
2. The Evolution of Investor Skill Sets: Beyond Data to Human Intelligence
The future of investment success lies not only in leveraging AI but in enhancing human intelligence to complement it. As AI reshapes industries, critical thinking, creativity, and adaptability become more important for investors navigating complex, fast-changing markets. Just as education must evolve to prioritize AI collaboration over rote learning, investment firms must foster a culture of continuous learning and AI literacy among their teams. Additionally, status insecurity can inhibit collaborative success, reinforcing the need for gracious leadership and knowledge-sharing in financial organizations.
3. Managing Digital and Cognitive Noise for Better Decision-Making
Turning off notifications does not automatically reduce digital stress—investors must instead cultivate mental resilience and strategic focus. In an era of constant information flow, professionals need structured thinking and noise-reduction techniques to filter signals from distractions. AI-driven decision-making can accelerate reaction times, but the true edge comes from empowering individuals and teams with structured, educated decision-taking frameworks. By balancing timing, impact, and informed intuition, investors can make the most of AI-enhanced tools without falling into the trap of misalignment or over-reliance.
TOP 5 ARTICLES
ARTICLE ONE
Beyond the Buzz: Investigating the Effects of a Notification-Disabling Intervention on Smartphone Behavior and Digital Well-Being
HUMAN INTELLIGENCE | Media Psychology | 2_2025 | Paper
Important Development
Randomly assigning people to disable pings for a week increased FOMO—and failed to reduce screen time and checking frequency.
This study is one of the first to test the effects of a notification-disabling intervention on both objective smartphone behavior and subjective user experiences. Despite high compliance and a sample that was highly motivated to reduce their smartphone use, the authors found that screen time and checking frequency were unaffected by the intervention, as well as most subjective experiences, including smartphone vigilance. In fact, participants did experience more situational FoMO, suggesting that disabling notifications results in drawbacks rather than improvements.
Why Relevant to You?
Turning off notifications is not the antidote to digital stress. Serenity is not about changing our settings. It’s about changing our mindsets, for which eliminating endogenous and exogenous noise can be legitimate support mechanisms.
ARTICLE TWO
Are ESG Ratings Enough to Measure Corporate Sustainability?
HUMAN INTELLIGENCE | Organization & Environment | Michael J. Mauboussin, Dan Callahan, CFA, Morgan Stanley | 02_2025 | Paper
Important Findings
Mauboussin is out with a new paper, discussing some of the issues with the calculation of expected value, what the payoff picture means for investing, the implications of volatility drag, the psychology of dealing with probabilities and payoffs, and how these ideas can be helpful for investing in various asset classes.
Why Relevant to You?
The prime task of an investor seeking to generate excess returns is to find opportunities where there are gaps between price and value. This is commonly called variant perception, or edge. Price is relatively straightforward but assessing value can be a challenge. The common approach is to consider expected value, which is the sum of the products of various payoffs and their associated probabilities. The task then becomes coming up with payoffs and probabilities in a thoughtful manner. Mauboussin et al offer a practical update on latest best practices in probabilistic thinking, is it through human or artificial intelligence. A must-read.
ARTICLE THREE
Generative AI at Work
HUMAN & ARTIFICIAL INTELLIGENCE | Development and Learning in Organizations | 07_2024 | Paper
Important Findings
This article explores how AI is reshaping education, emphasizing the need to nurture critical thinking, creativity, and problem-solving over rote learning. It argues that as AI automates tasks, human intelligence must evolve to focus on adaptability and collaboration with AI. Schools should integrate AI literacy to prepare students for future careers. This shift ensures that human strengths complement AI capabilities, fostering a well-rounded, future-ready workforce. The article highlights education’s role in shaping AI-augmented intelligence rather than competing with it.
Why Relevant to You?
Managers should rethink talent development by prioritizing human skills such as critical thinking, creativity, problem-solving, and emotional intelligence—areas where AI currently lacks proficiency.Traditional, static learning models in workplaces are no longer sufficient. Companies must foster a culture of continuous learning, leveraging AI-driven adaptive learning platforms for employee training.nvesting in AI literacy programs for leadership teams ensures organizations are proactive rather than reactive in leveraging AI capabilities.
ARTICLE FOUR
The Vicious Cycle of Status Insecurity
SUSTAINABLE INVESTING | American Psychology Association | 02_2025 | Paper
Important Findings
Sharing credit doesn’t detract from your success. It displays your character.
17 studies: When people feel insecure, they hesitate to celebrate others—and fail to earn respect.
Why Relevant to You?
Being gracious is a virtue. The most honorable way to succeed is to be the rising tide that lifts all boats. This does not change, even when augmenting our intelligence through machine support or in the context of capital markets. Finance remains a people’s business after all.
ARTICLE FIVE
What Makes Human-AI Partnerships Work?
HUMAN & ARTIFICIAL INTELLIGENCE | Kevin He, Ran Shorrer, Mengjia Xia | 02 2025 | Paper
Important Findings
Researchers conducted an incentivized experiment to study people’s perception of generative artificial intelligence (GenAI) alignment in the context of economic decision- making. Using a panel of economic problems spanning the domains of risk, time preference, social preference, and strategic interactions, they asked people to make choices for themselves and to predict the choices made by GenAI on behalf of a human user. They found that people overestimate the degree of alignment between GenAI’s choices and human choices.
Why Relevant to You?
Professionals that want to be ahead of the game increasingly extend their decision taking capacity through AI powered tools. While timing and reactivity is key for finance professionals, impact is what matters. Both combined highlight the importance of empowering professionals (teams and individuals) with educated decision taking dynamics to take most value out of the augmented edge.
