Prompting for Alpha (Part 1): How Prompts Fail, and How to Fix Them - Issue 5

AlphaLens - Why Most “Bad” AI Output Isn’t About the Model - It’s How You Prompt It

I’ve been writing a few of these posts and would truly value your feedback: what’s working, what’s missing, and what you'd love to see more of.

If you found this useful, consider forwarding it to a friend or colleague who thinks deeply about investing in the age of AI.

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This series, Prompting for Alpha, is about transforming prompting into edge. Each part explores a different layer of how great investors can co-build intelligence with AI:

• Part 1: How Prompts Fail, and How to Fix Them
  Six failure modes. Ten high-impact prompting skills. A blueprint for turning vague queries into insight engines.

• Part 2: Smart Prompting for Pattern Recognition
  How to elevate prompts to surface key debates, strategic inflections, under-covered shifts, and second-order consequences. Think in patterns with prompts.

• Part 3: Prompt Systems for the Full Research Cycle
  From idea generation to thesis defense. From earnings to red flags to valuation. A robust prompt architecture that mirrors how great investors think.

• Part 4: Prompt the AI to Check You
  How to use AI as a mirror: flag narrative drift, detect overfitting, and challenge your logic. The sharpest analysis starts with clarity of mind.

• Part 5: Systematic Prompting at the Fund Level
  Prompts shouldn’t just live in one analyst’s chat history. I'll explore how a fund can build a shared, modular, philosophy-aligned prompting system, turning collective intelligence into institutional edge.

Got ideas for future parts?
I’d love to hear them. This series evolves with your questions.

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Part 1: How Prompts Fail, and How to Fix Them

I - Why Most “Bad” AI Output is a Prompting Problem

AI is powerful.
But a big portion of what investors get from it today feels… off. Thin.

Not because the models are weak.
But because the way we engage them is not fully unleashing AI power.

At its core, the prompt is the bridge between your investment intuition and the model’s latent pattern recognition engine.

Speak vaguely, and you’ll get plain generic output.
Speak with precision and creativity, and you’ll unlock insight.

6 Common Failure Modes (Not of AI, but of Prompting)