By Philip Moskie

ChatGPT is a powerful language model developed by OpenAI that can generate answers to questions people ask it. The best way to use ChatGPT to generate stock ideas by asking it to identify members of various industry groups. Since ChatGPT is only trained in data up to 2021, the list may be somewhat dated, but the companies listed will still be part of the group. Using ChatGPT to create industry-based lists in hot sectors can give an investor an advantage in his stock trading endeavor. 

Introduction:

Did you know you can use ChatGPT to generate stock ideas? ChatGPT is the hottest new AI Language model tool that is helping entrepreneurs do amazing things. From writing blog posts to making YouTube videos it is an incredible tool. 

It does have some limitations you must be aware of. The first is that ChatGPT assumes it is always right. You must check the output and make sure what ChatGPT is true. 

ChatGPT is also only trained on data only up until the year 2021. Therefore, any question that requires data beyond that date will not be accurate. 

ChatGPT also cannot do calculations or search the internet. To use it to generate stock ideas you must know that proper questions to ask it to overcome these limitations. No program can predict the future. Do not expect it to give you “winning stock picks”. 

What is ChatGPT?

ChatGPT is a variant of the GPT (Generative Pre-trained Transformer) language model that was specifically designed for generating text in a conversational style. It has been trained on a large dataset of human conversations, which allows it to generate text that is more natural and coherent than other language models. 

What we asked it to do

Currently we are in the middle of a bear market in stocks. During a bear market, certain sectors tend to perform better than others. In a recent post we discussed these sectors and why they are somewhat of a “safe port in a storm”. We figured it would be very useful for traders to be able to better investigate and trade in different market sectors quickly and effectively.  So, we had a “conversation” with ChatGPT and asked it to generate stock lists for investment ideas in the following defensive sectors:

• Communication Services
• Consumer Staples 
• Health Care
• Utilities
• Banks
• Pharmaceuticals

For the sake of this article, we will use the Pharmaceutical sector as the basis for our discussion. 

How to Use ChatGPT for Stock Idea Generation:

As mentioned above, ChatGPT is that is a not a generative tool. It can’t search the internet or do calculations. This means that if you want it to bring you a list of stocks, you first need to tell it where it would find that list. Then it goes into its memory bank and finds the data you want if it is in there. 

For example, we asked it to give us a list of top 5 stocks in the pharmaceutical sector. Here is what it gave us:

“Here are the top 5 pharmaceutical stocks based on market capitalization as of 2021:

Johnson & Johnson

Pfizer Inc.

Merck & Co., Inc.

AbbVie Inc.

Roche Holding AG

Again, please note that this list is based on market capitalization and is not a recommendation to buy or sell any particular stock. It is always important to do your own research and consult with a financial advisor before making any investment decisions.”

Once again, an important note is that ChatGPT is trained on data up to 2021, so things like market capitalization will not be up to date. In our case we are only trying to generate a list of stocks in a particular sector, so this ChatGPT limitation does not hurt us. 

Then, to make it even easier for us, we asked it to generate the same list with the stock symbols included and put it in a table format. Here is the response:

Here is the same information presented in a table format:

Rank	Company	Ticker Symbol
1	Johnson & Johnson	JNJ
2	Pfizer Inc.	PFE
3	Merck & Co., Inc.	MRK
4	AbbVie Inc.	ABBV
5	Roche Holding AG	RHHBY

Please note that this list is based on market capitalization and is not a recommendation to buy or sell any particular stock. It is always important to do your own research and consult with a financial advisor before making any investment decisions.

What can you do with this?

You take the list of symbols and go to a free trading simulator or other any other free stock tracking service and create a “group”. This will allow you to quickly scan the pharmaceutical sector for opportunities. Then you trade using whatever trading style you may ascribe to. 

Here is the process step by step

Step 1: Gather data on different sectors: 

Before you start generating stock ideas, it’s important to decide the sector or sectors you want to focus on. You can gather this data manually by researching different sectors online or by using financial data websites. Make sure to gather information on a wide range of sectors, such as technology, healthcare, financials, consumer goods, and more.

Step 2: Input the data into ChatGPT: 

Once you have gathered the data on different sectors, the next step is to input it into ChatGPT. You can do this by going to the following link OpenAI and setting up a free account (free as of this writing). 

Make sure to include the sectors you are interested in and any additional constraints or preferences you may have in your input. For example, you could use an input like “generate a list of 10 stock ideas from the technology and healthcare sectors that have a market cap of over $1 billion and a P/E ratio of less than 20.”

Step 3: Compile your results

ChatGPT will generate a response in the form of a list of stock ideas based on your questions. You can then parse the response and extract the stock ideas from it. If you are using a program or website that allows you to enter text and receive a response from ChatGPT, the response will likely be displayed in a text box or on a separate webpage. Simply copy and paste the response into a document or spreadsheet to save the list of stock ideas.

Step 4: Use your list!

Use a free stock tracking system like Tradingview.com   to get a feel for the sector and how well it is performing in the current market conditions. 

Conclusion:

Using ChatGPT to generate a list of stock ideas manually can be a quick and easy way to find new investment opportunities or to get a better understanding of the stock market. By following the steps outlined in this blog post, you can use ChatGPT to generate a list of stock ideas based on different sectors and any additional constraints or preferences you may have. With the power of ChatGPT at your disposal, you can easily explore new investment opportunities and gain a deeper understanding of the stock market.