Quantamental: AI and Fundamental Analysis in Investing

This article challenges the traditional approach to quantitative investing, pointing out the pitfalls of correlation and the problem of the so-called 'factor zoo.' It presents the concept of Quantamental Investing as a modern synthesis of AI algorithms and fundamental analysis, which emphasizes understanding causal mechanisms rather than blindly following statistics. Drawing on the work of Marcos López de Prado, the author analyzes the 'factor mirage' phenomenon and the inflation of supposed market anomalies. The text emphasizes the need to shift from associative statistical models to structural alpha engineering, where humans act as architects of AI processes and regime models adapt to changing macroeconomic conditions. This is essential reading for investors seeking reliable foundations in a data-driven world.