This is Decoded: AI tools for getting straight answers from complex investment documents.
Over the past 12 months I have used AI on a daily basis. Like most things, it’s garbage in, garbage out. But AI is an expert at making garbage look really good.
Four simple rules for better results:
1: Always provide very clear instructions.
Defined source data coupled with detailed instructions is an effective combination to produce a quality result. Think excel formula level of detail. AI needs a similar type of instruction - exactly what data to use and exactly what problem to solve. For analyzing data, I use Notebook LM. By controlling the source data and asking mathematically-based questions, hallucinations and other questionable results are significantly reduced.
2: Don’t be fooled by AI’s assumptions.
AI will always give an answer - sometimes based on terrible assumptions. I have never had AI tell me, "I don't know," or "I don't have the data for that". It will always provide a very confident response. After digging into the logic behind several questionable results, I found the AI was basing its conclusions on hidden assumptions because it lacked the information required for the requested level of detail.
3: The further you get from formulaic logic, the less useful AI becomes.
Because of the points above, AI is often unreliable for anything subjective or context-dependent. For example:
✅ DO: Provide a clear, numbers-based question.
“Analyze the provided pro forma for mathematical inconsistencies.”
🚫 DON’T: Ask a subjective question - especially without context.
“Will the renovation plans appeal to prospective tenants?”
4: Check the work.
No matter what, use AI as a tool not a definitive answer. Check the work. Check the assumptions.
I anticipate this post will become useless very quickly as AI evolves and improves. Until then, keep your brain sharp and use AI as a tool, not an oracle.