“Joseph Plazo: Algorithms Are Powerful, But Not Principled”“Joseph Plazo: Algorithms Are Powerful, But Not Principled”“Joseph Plazo Issues Caution on AI in Finance: Human Values Still Matter”

At a gathering of future leaders in AI-driven investment, investment strategist Joseph Plazo, issued a timely warning: in a world increasingly shaped by machines, values cannot be outsourced.

PHILIPPINES — At the Asian Institute of Management, the conversation turned not to technology, but to ethics.

Plazo, the founder of the high-performing quant firm Plazo Sullivan Roche, has developed trading algorithms with a documented 99% win rate.

And yet, it was not code he chose to champion—but caution.

“Letting AI handle your trades is fine—but not your conscience.”

???? **One of AI’s Leading Voices Urges Balance, Not Blind Faith**

Plazo’s credibility comes not from critique, but from contribution. Major asset managers rely on his proprietary tools.

“Optimisation is not the same as orientation,” he remarked. “And machines don’t understand consequences.”

He recounted a key moment during the COVID-19 crash: a bot under his firm’s control flagged a short position on gold—hours before an emergency Federal Reserve announcement.

“We intervened,” he said. “It read the signals. But not the situation.”

???? **Why Strategic Delay Still Matters**

In a reference to a 2023 Fortune roundtable, Plazo cited concerns that traders increasingly feel disconnected from the market—trading on systems they don’t fully understand.

“Deliberation can be the difference between a mistake and a saved reputation.”

He proposed a decision framework, which he called **“Conviction Calculus”**, grounded in three guiding questions:

- Is this trade consistent with our ethical code?
- Does traditional market intelligence support the trade?
- Are we prepared to accept accountability if the model fails?

???? **Asia’s AI Momentum—and the Growing Need for Governance**

Across Asia, investment in AI and fintech is accelerating. Countries like Singapore, South Korea, and the Philippines are becoming hubs for automated trading systems and tech-led asset management.

Plazo’s message? The pace is impressive—but governance must not be left behind.

“You can scale capital faster than character,” he said. “Which leads to systems that look smart, but act recklessly.”

In 2024 alone, two hedge funds in Hong Kong reported billion-dollar losses due to AI-driven decisions that failed to anticipate geopolitical shifts.

“Machines are fast—but they’re not wise.”

???? **Building Technology That Understands More Than Just Numbers**

Despite his warnings, Plazo remains optimistic about AI’s more info future—when developed thoughtfully.

His team is building what he described as **“narrative-integrated AI”**—tools that factor in not just financial data, but also context, tone, timing, and social dynamics.

“It’s not enough to replicate hedge funds,” he said. “We need systems that reason—not just react.”

At a private gathering after his talk, venture leaders from Tokyo and Jakarta approached Plazo about potential collaboration. One described his vision as:

“A necessary counterweight to unchecked automation.”

???? **Why Slowing Down May Save the System**

Plazo concluded with a sobering statement:

“The next major market failure won’t come from panic,” he said. “It will come from logic—executed too quickly, with no one questioning the outcome.”

No theatrics. No drama. Just a message every leader in finance should consider.

Because in the race to automate everything, what’s often lost is not just time—but responsibility.