Telescope introduces "Invert" - a new way to think about investing with AI

Telescope introduces “Invert” - a new way to think about investing with AI

In the fast-paced world of finance, it’s easy to get caught up in the excitement of a new investment idea. We often focus on the potential upside, the narrative that could drive a theme or basket to outperform. But what about the other side of the coin? What about the risks, the challenges, the ways in which things could go wrong?

At Telescope, we believe that a balanced, rigorous approach to investment research is essential - especially in an era of rapid change and disruption. That’s why we’re excited to introduce “Invert”, a new feature in our Ripple product that uses AI to help users stress-test their investment ideas and consider multiple perspectives.

Invert is inspired by the concept of inversion, a powerful mental model used by some of the world’s most successful investors and thinkers. As the mathematician Carl Jacobi noted, “It is in the nature of things that many hard problems are best solved only when they are addressed backward.” Instead of asking how to achieve a particular outcome, inversion prompts us to consider how to prevent the opposite outcome.

In a sense, Invert is like having a built-in “red team” to challenge your investment ideas. In the cybersecurity world, red teams are groups of experts who are tasked with finding vulnerabilities in a system by thinking like an attacker. They provide a valuable counterpoint to the “blue team” - the defenders who are focused on protecting the system.

Invert brings this red team/blue team dynamic to the investment research process. When a user enters a theme or idea into Ripple, such as “5G networks” or “gene editing”, our AI engine takes on the role of the blue team, generating a basket of relevant stocks and assets that align with the bullish thesis. But then Invert steps in as the red team, surfacing potential risks, challenges, and unintended consequences associated with the theme.

For example, if a user is interested in “autonomous vehicles”, Invert might highlight concerns about liability issues, regulatory hurdles, consumer adoption, or technological limitations. By playing devil’s advocate, Invert encourages users to think critically about their ideas and consider a wider range of scenarios.

Prompt: “An example investment idea, inverted.”

Under the hood, Invert leverages Telescope’s proprietary technology and relies on various LLMs such as OpenAI, Anthropic and Meta’s Llama models to identify non-obvious risks and second-order effects.

Importantly, Invert is not designed to shoot down every new idea or dissuade users from pursuing innovative strategies. Rather, it’s about equipping them with a more complete picture of the opportunity set, so they can make informed decisions and develop robust investment theses. By considering the potential downsides upfront, investors can better manage risk, construct resilient portfolios, and develop contingency plans for navigating challenges.

As Charlie Munger, the legendary investor and thinker, puts it: “All I want to know is where I’m going to die, so I’ll never go there.” With Invert, we’re giving Telescope users a useful tool to help investors identify potential pitfalls and blind spots in their investment process.

Of course, Invert is just one piece of the puzzle. At Telescope, we’re committed to building a comprehensive suite of AI-powered tools and platforms to support the entire investment lifecycle. As we continue to innovate and evolve, we remain focused on our core mission: Inspire the future of investing.

At Telescope, our goal is to keep pioneering buy-side investor innovations. To learn more about how AI is transforming finance, connect with the team at Telescope.