When Numbers Meet Narratives: How LLMs Reframe Quant Investing
Markets have a talent for embarrassing elegant models. A factor model says a company looks cheap, profitable, revised upward, less volatile, or attractively positioned. A news headline says the company just changed guidance, delayed a merger, won a contract, received a regulatory opinion, or did something else that refuses to fit politely into a spreadsheet. The obvious modern temptation is to feed both into a large language model, add some attention, and let the machine discover alpha. Naturally, because this is finance, the obvious temptation is not quite correct. ...