Thinking Fast, Trading Late: System One Decision Models vs the Market

arXiv:2611.03985v1 Announce Type: new Abstract: Large language models (LLMs) read company news at scale, and backtests suggest that their readings predict stock returns. We ask how much of that predictability survives a test that rules out look-ahead, memorization and selection. We propose OLIVIA, a protocol for such tests: point-in-time inputs with company identities masked, selection on validation data only, an analysis plan frozen by cryptographic hash, and a test period unblinded once through a logged lock. We apply it to AI decision models, non-generative language models that return probabilities for typed questions, reading news about S&P 500 stocks: an open-weights model we fine-tuned on 2024-2025 data, three commercial models and standard baselines.