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Everything is always painted in such an adversarial light, it makes you despair sometimes. I think that The Atlantic's recent article on this topic is a more n

Everything is always painted in such an adversarial light, it makes you despair sometimes. I think that The Atlantic's recent article on this topic is a more nuanced insight[1]; human-machine cooperation is probably where the big money will be. Companies that seek to cut people out of the loop will probably run into a lot of problems, as will those that smash the looms. Whereas trying to smooth the interface between AI/ML conclusions and human oversight is probably going to see the most success. [1]: https://www.theatlantic.com/education/archive/2018/02/employers-are-setting-workers-up-for-failure/552050/ https://www.theatlantic.com/education/archive/2018/02/employ...

nwah1 9y ago
Some of the most successful investors, like Warren Buffet, are old school and also operating on a completely different level than most investors since he can force companies to change course, or like after the 2008 crash he was able to come in and offer deals to big banks in return for preferred shares. It would be difficult to see how to apply narrow AI to this kind of thing. It seems really good for routine tasks, like high frequency trading, but maybe not so great for these big one-off deals which constitute many of the best investments. Of course, Buffet might still benefit from AI analysis of broad market trends, and the like. If I'm wrong, I'd be interested to know.
- samfisher83 9y ago
  Buffet was a small time investor at some point. He just made a lot of good investments over a long time.
  - krirokeoe2882 9y ago
    I like how this ignores the very different world that was when Buffet got started Yes here you are, sir, an economy that can only go up given the decimation of manufacturing in the rest of the post WW2 world And to boot, rampant imperialism on the part of your government Let’s see him start at 11 yo today with the same initial investment
    - nwah1 9y ago
      Given his level of success, even if his talents are considerable, he must've also been extremely lucky and thus even starting a day later or earlier would've probably crushed his entire life trajectory.
      - perl4ever 9y ago
        I agree that he was lucky in starting at the general time he did, but I think that claiming the exact day was critical is going too far. It's like the person who supposedly said that if the earth was an inch farther away from the sun it would freeze and an inch closer it would cook.
        freeflight 9y ago
        Even a couple of inches, extrapolated over time, can have a massive effect on the final trajectory.
        valuearb 9y ago
        Buffett started out as an expert in the kind of arbitrate deals that are much more available in bad markets than good. Still he was able to average 40% returns his first decade despite the lack of a good bear market.
      - valuearb 9y ago
        LOL, no. Buffett’s success has been done year by year for over 60 years. Take his best year out and his success is basically the same. Note also that he’s intentionally hamstrung himself for the last 46 years or so by investing through Berkshire Hathaway. Had he kept investing through his partnerships he would have made another $80 Billion from performance fees. Had he just invested his own money his returns would have been much higher given he’d have far more investment opportunities,
    - tim333 9y ago
      He's still doing well in the current world.
  - walshemj 9y ago
    He also had a very very good mentor who wrote the original book on securities analysis.
    - headmelted 9y ago
      This. Also check out The Intelligent Investor, which is arguably Ben Graham's most accessible work on the topic.
      - walshemj 9y ago
        Absolutely the modern copy I have had some commentary comparing some of Grahams analysis of problems in the 50's and 60's and how some of the problems in the dot.com crash where strikingly similar.
- longerthoughts 9y ago
  > It seems really good for routine tasks, like high frequency trading, but maybe not so great for these big one-off deals which constitute many of the best investments. I understand what you mean from an opportunity identification perspective, but you have to keep in mind that even the "big one-off deals" require routine tasks at a lower level to verify the merit of such deals. If you think about tasks like reviewing financial statements, AI could provide faster evaluation and potentially identify trends that would elude a human analyst. In any case, Buffett is known for avoiding investments in companies he doesn't deeply understand and I would bet the same stance holds for employing new technology in his investment process.
  - headmelted 9y ago
    I don't see any reason to believe this isn't happening already. As old school as Buffett is (and the man is a legend in my eyes), it just doesn't seem a stretch to think that they're running at least some deep-learning-based analysis over the deals they consider. Whether or not they give any weight to the output is quite something else, but it would be such a (relatively) trivial cost to get that answer that it seems less likely they'd not do it.
    - tim333 9y ago
      I'm pretty sure Buffett doesn't use that stuff. Although he reads the papers so he may pick up on things other people have done.
- valuearb 9y ago
  Buffett’s investing algorithm hasn’t changed in 65 years. Every day he reads financial reports. If he likes a companies business model, he makes a mental estimate of the companies value, and then looks up their trading price. If there is a big enough discrepancy in his favor he will start buying.
vanderZwan 9y ago
> human-machine cooperation is probably where the big money will be. As it has been for as long as machines have existed, really. This reminds me of Douglas Engelbart and his vision for computers. I'll cite the section of his wikipedia page that paraphrases an interview with him from 2002[0][1]. > [Douglas Engelbart] reasoned that because the complexity of the world's problems was increasing, and that any effort to improve the world would require the coordination of groups of people, the most effective way to solve problems was to augment human intelligence and develop ways of building collective intelligence. He believed that the computer, which was at the time thought of only as a tool for automation, would be an essential tool for future knowledge workers to solve such problems. He was right of course, and his work lead to "The Mother of All Demos"[1]. Machine learning is the next step in using computers as thought enhancement tools. What we still need to figure out is an appropriate interface that is not as "black-boxy" as "we trained a neural net, and now we can put X in and get Y out". EDIT: Now that I read that quoted section of wikipedia again, it's funny to note that computers were "only seen as tools of automation", and how modern fears of AI are also about automation. Automation of thinking. [0] https://en.wikipedia.org/wiki/Douglas_Engelbart https://en.wikipedia.org/wiki/Douglas_Engelbart [1] https://www.youtube.com/watch?v=VeSgaJt27PM https://www.youtube.com/watch?v=VeSgaJt27PM [2] https://www.youtube.com/watch?v=yJDv-zdhzMY https://www.youtube.com/watch?v=yJDv-zdhzMY
- seanmcdirmid 9y ago
  Ironically enough, Engelbart was often derided by his colleagues at the time who thought hard AI was just around the corner and so all of this intelligence augmentation stuff would be obsolete soon enough. Today we are closer than ever (always just 20 years away!), but still IA rather than AI is very much the way to go.
  - ethbro 9y ago
    (if you check an old comment) Do you have any sources for this? I find "sentiment at the time" especially hard to find, historically speaking. And I'd be fascinated to read something about this.
- leggomylibro 9y ago
trevyn 9y ago
>it makes you despair sometimes. On the other hand, if you are optimistic and excited in a world where everyone else is in despair, you have some distinct advantages. :)
- greghatch 9y ago
  That's not entirely comforting
- walshemj 9y ago
  As Alistair Cook said on Black Tuesday back in 29 tomorrow might be a good day to buy some shares.
chocolatebunny 9y ago
This kind of my beef with most SciFi movies. They always seem to paint an antagonistic relationship between man and machine when the reality will probably be something in the middle.
- deleted 9y ago
  [deleted]
- creep 9y ago
  That's because science fiction movies are mostly not projecting a predicted future, they are projecting and exploring our fears and aspirations with the future.
- tjr225 9y ago
  I actually find it really funny that a lot of SciFi predicts a future where we are actually talented and intelligent enough to create a human-like, sentient being. The reality seems so distinctly far off from that- though I guess that is the point of fiction.
adw 9y ago
> human-machine cooperation is probably where the big money will be The sceptical counterargument to that, which I go back and forth on, is "that's what they said about chess". There was a transitional period when this was true, then the engines disappeared into the middle distance. I work on the hunch that the middle-ground of tasks where humans improve on, or with, machines is both small and unpredictable; computers will tend towards being either useless or strongly superhuman for each problem.
- Barrin92 9y ago
  this is still true in chess. Humans use chess computers to play the game of chess. The tournament money still goes to humans, everybody still cares about the world's best players, and so forth. Even as chess engines vastly have surpassed humans in technical capability, they haven't somehow sidelined humans in all aspects of the domain. Not even literally in competitive games. It's not like everybody has somehow switched to watching engine games. That is in fact just a niche market of the chess world. We are humans and as such we still enjoy seeing real humans thrive and compete in chess more than we care about machines. If anything chess is the perfect example that the pessimism is misplaced, chess engines have not killed chess as a human endeavour.
  - robotresearcher 9y ago
    But the purpose of chess is taking part and having fun. The purpose of finance is making money. The comparison is weird. No one will give their money to someone to manage for fun if an AI could make more money.
  - Noos 9y ago
    I don't agree. I feel that chess engines have killed chess as a pastime that people play. I know growing up in the 80s I played it during lunch at school, and schools had chess clubs which really weren't on the order of forming neophyte pros, but just students who liked the game. But now it's rather futile to play it, because at some point you'll run up against a machine that can outplay you perfectly. I mean, before you could play a grandmaster or something, but the moment you or someone else for you buys a ten-dollar chess program, you realize that despite improvement, the computer will always defeat you. I don't really see chess as that big any more in the public eye. The kids might play Minecraft, which rewards human creativity and doesn't really force you to compete against an A.I. optimized to beat 99% of all Minecraft players.
dalbasal 9y ago
This is sort of tangental.. I think it's curious that in a lot of writing AI is almost being defined as that which replaces human labour. The context of technological unemployment and whatnot. In that frame, I think its natural that discomfort is linked to autonomy. Autonomous taxis & cruise control may be points on a continuum technically, but economically, no human involvement is different. Autonomy separates the PCs from the Looms. Cooperation where a human is involved the machine is tool use, recognizably. The humans labour gets more efficient with tools. More trinkets per human. Maybe the Luddites thought of looms as autonomous, with humans in a supporting role. Anyway, I think it's hard to predict where this goes on a 25y scale.
drawkbox 9y ago
At a certain point humans and AI can also play off one another predictably. Everyone has played games where the AI can beat you in a straight shot, but you can lead the AI into situations that are predictable where you can gain a predictable advantage, and vice versa with humans. Example: Buy on the dip strategy and technical strategies, big players could drive down the market and HFT can buy in the dip based on fundamentals. Bad news floods the market and HFT reacts. Humans can predict what AI would do, then AI will reactively start to predict what humans will do when this happens, but humans always have one step ahead in new techniques, AI will be built to defend against it. Regarding defending against a buy on the dip strategy, AI can start to learn player specifics and not react, or react differently (preemption) if those players return, however this can also eventually be played. Humans and AI will be playing a cat and mouse game for eternity, microcosms of this can be seen in gaming AI. I think of it more like a game that will be fun to play, yes sometimes you will lose, other times you will predictably win. Bots will be challenging bots unexpectedly and predictably, but they will almost always originate from human programming originally.

nwah1 9y ago

Some of the most successful investors, like Warren Buffet, are old school and also operating on a completely different level than most investors since he can force companies to change course, or like after the 2008 crash he was able to come in and offer deals to big banks in return for preferred shares. It would be difficult to see how to apply narrow AI to this kind of thing. It seems really good for routine tasks, like high frequency trading, but maybe not so great for these big one-off deals which constitute many of the best investments. Of course, Buffet might still benefit from AI analysis of broad market trends, and the like. If I'm wrong, I'd be interested to know.

samfisher83 9y ago
Buffet was a small time investor at some point. He just made a lot of good investments over a long time.
- krirokeoe2882 9y ago
  I like how this ignores the very different world that was when Buffet got started Yes here you are, sir, an economy that can only go up given the decimation of manufacturing in the rest of the post WW2 world And to boot, rampant imperialism on the part of your government Let’s see him start at 11 yo today with the same initial investment
  - nwah1 9y ago
    Given his level of success, even if his talents are considerable, he must've also been extremely lucky and thus even starting a day later or earlier would've probably crushed his entire life trajectory.
    - perl4ever 9y ago
      I agree that he was lucky in starting at the general time he did, but I think that claiming the exact day was critical is going too far. It's like the person who supposedly said that if the earth was an inch farther away from the sun it would freeze and an inch closer it would cook.
      - freeflight 9y ago
        Even a couple of inches, extrapolated over time, can have a massive effect on the final trajectory.
        valuearb 9y ago
        Buffett started out as an expert in the kind of arbitrate deals that are much more available in bad markets than good. Still he was able to average 40% returns his first decade despite the lack of a good bear market.
    - valuearb 9y ago
      LOL, no. Buffett’s success has been done year by year for over 60 years. Take his best year out and his success is basically the same. Note also that he’s intentionally hamstrung himself for the last 46 years or so by investing through Berkshire Hathaway. Had he kept investing through his partnerships he would have made another $80 Billion from performance fees. Had he just invested his own money his returns would have been much higher given he’d have far more investment opportunities,
  - tim333 9y ago
    He's still doing well in the current world.
- walshemj 9y ago
  He also had a very very good mentor who wrote the original book on securities analysis.
  - headmelted 9y ago
    This. Also check out The Intelligent Investor, which is arguably Ben Graham's most accessible work on the topic.
    - walshemj 9y ago
      Absolutely the modern copy I have had some commentary comparing some of Grahams analysis of problems in the 50's and 60's and how some of the problems in the dot.com crash where strikingly similar.
longerthoughts 9y ago
> It seems really good for routine tasks, like high frequency trading, but maybe not so great for these big one-off deals which constitute many of the best investments. I understand what you mean from an opportunity identification perspective, but you have to keep in mind that even the "big one-off deals" require routine tasks at a lower level to verify the merit of such deals. If you think about tasks like reviewing financial statements, AI could provide faster evaluation and potentially identify trends that would elude a human analyst. In any case, Buffett is known for avoiding investments in companies he doesn't deeply understand and I would bet the same stance holds for employing new technology in his investment process.
- headmelted 9y ago
  I don't see any reason to believe this isn't happening already. As old school as Buffett is (and the man is a legend in my eyes), it just doesn't seem a stretch to think that they're running at least some deep-learning-based analysis over the deals they consider. Whether or not they give any weight to the output is quite something else, but it would be such a (relatively) trivial cost to get that answer that it seems less likely they'd not do it.
  - tim333 9y ago
    I'm pretty sure Buffett doesn't use that stuff. Although he reads the papers so he may pick up on things other people have done.
valuearb 9y ago
Buffett’s investing algorithm hasn’t changed in 65 years. Every day he reads financial reports. If he likes a companies business model, he makes a mental estimate of the companies value, and then looks up their trading price. If there is a big enough discrepancy in his favor he will start buying.

vanderZwan 9y ago

> human-machine cooperation is probably where the big money will be. As it has been for as long as machines have existed, really. This reminds me of Douglas Engelbart and his vision for computers. I'll cite the section of his wikipedia page that paraphrases an interview with him from 2002[0][1]. > [Douglas Engelbart] reasoned that because the complexity of the world's problems was increasing, and that any effort to improve the world would require the coordination of groups of people, the most effective way to solve problems was to augment human intelligence and develop ways of building collective intelligence. He believed that the computer, which was at the time thought of only as a tool for automation, would be an essential tool for future knowledge workers to solve such problems. He was right of course, and his work lead to "The Mother of All Demos"[1]. Machine learning is the next step in using computers as thought enhancement tools. What we still need to figure out is an appropriate interface that is not as "black-boxy" as "we trained a neural net, and now we can put X in and get Y out". EDIT: Now that I read that quoted section of wikipedia again, it's funny to note that computers were "only seen as tools of automation", and how modern fears of AI are also about automation. Automation of thinking. [0] https://en.wikipedia.org/wiki/Douglas_Engelbart https://en.wikipedia.org/wiki/Douglas_Engelbart [1] https://www.youtube.com/watch?v=VeSgaJt27PM https://www.youtube.com/watch?v=VeSgaJt27PM [2] https://www.youtube.com/watch?v=yJDv-zdhzMY https://www.youtube.com/watch?v=yJDv-zdhzMY

seanmcdirmid 9y ago
Ironically enough, Engelbart was often derided by his colleagues at the time who thought hard AI was just around the corner and so all of this intelligence augmentation stuff would be obsolete soon enough. Today we are closer than ever (always just 20 years away!), but still IA rather than AI is very much the way to go.
- ethbro 9y ago
  (if you check an old comment) Do you have any sources for this? I find "sentiment at the time" especially hard to find, historically speaking. And I'd be fascinated to read something about this.
leggomylibro 9y ago

trevyn 9y ago

>it makes you despair sometimes. On the other hand, if you are optimistic and excited in a world where everyone else is in despair, you have some distinct advantages. :)

greghatch 9y ago
That's not entirely comforting
walshemj 9y ago
As Alistair Cook said on Black Tuesday back in 29 tomorrow might be a good day to buy some shares.

chocolatebunny 9y ago

This kind of my beef with most SciFi movies. They always seem to paint an antagonistic relationship between man and machine when the reality will probably be something in the middle.

deleted 9y ago
[deleted]
creep 9y ago
That's because science fiction movies are mostly not projecting a predicted future, they are projecting and exploring our fears and aspirations with the future.
tjr225 9y ago
I actually find it really funny that a lot of SciFi predicts a future where we are actually talented and intelligent enough to create a human-like, sentient being. The reality seems so distinctly far off from that- though I guess that is the point of fiction.

adw 9y ago

> human-machine cooperation is probably where the big money will be The sceptical counterargument to that, which I go back and forth on, is "that's what they said about chess". There was a transitional period when this was true, then the engines disappeared into the middle distance. I work on the hunch that the middle-ground of tasks where humans improve on, or with, machines is both small and unpredictable; computers will tend towards being either useless or strongly superhuman for each problem.

Barrin92 9y ago
this is still true in chess. Humans use chess computers to play the game of chess. The tournament money still goes to humans, everybody still cares about the world's best players, and so forth. Even as chess engines vastly have surpassed humans in technical capability, they haven't somehow sidelined humans in all aspects of the domain. Not even literally in competitive games. It's not like everybody has somehow switched to watching engine games. That is in fact just a niche market of the chess world. We are humans and as such we still enjoy seeing real humans thrive and compete in chess more than we care about machines. If anything chess is the perfect example that the pessimism is misplaced, chess engines have not killed chess as a human endeavour.
- robotresearcher 9y ago
  But the purpose of chess is taking part and having fun. The purpose of finance is making money. The comparison is weird. No one will give their money to someone to manage for fun if an AI could make more money.
- Noos 9y ago
  I don't agree. I feel that chess engines have killed chess as a pastime that people play. I know growing up in the 80s I played it during lunch at school, and schools had chess clubs which really weren't on the order of forming neophyte pros, but just students who liked the game. But now it's rather futile to play it, because at some point you'll run up against a machine that can outplay you perfectly. I mean, before you could play a grandmaster or something, but the moment you or someone else for you buys a ten-dollar chess program, you realize that despite improvement, the computer will always defeat you. I don't really see chess as that big any more in the public eye. The kids might play Minecraft, which rewards human creativity and doesn't really force you to compete against an A.I. optimized to beat 99% of all Minecraft players.

dalbasal 9y ago

This is sort of tangental.. I think it's curious that in a lot of writing AI is almost being defined as that which replaces human labour. The context of technological unemployment and whatnot. In that frame, I think its natural that discomfort is linked to autonomy. Autonomous taxis & cruise control may be points on a continuum technically, but economically, no human involvement is different. Autonomy separates the PCs from the Looms. Cooperation where a human is involved the machine is tool use, recognizably. The humans labour gets more efficient with tools. More trinkets per human. Maybe the Luddites thought of looms as autonomous, with humans in a supporting role. Anyway, I think it's hard to predict where this goes on a 25y scale.

drawkbox 9y ago

At a certain point humans and AI can also play off one another predictably. Everyone has played games where the AI can beat you in a straight shot, but you can lead the AI into situations that are predictable where you can gain a predictable advantage, and vice versa with humans. Example: Buy on the dip strategy and technical strategies, big players could drive down the market and HFT can buy in the dip based on fundamentals. Bad news floods the market and HFT reacts. Humans can predict what AI would do, then AI will reactively start to predict what humans will do when this happens, but humans always have one step ahead in new techniques, AI will be built to defend against it. Regarding defending against a buy on the dip strategy, AI can start to learn player specifics and not react, or react differently (preemption) if those players return, however this can also eventually be played. Humans and AI will be playing a cat and mouse game for eternity, microcosms of this can be seen in gaming AI. I think of it more like a game that will be fun to play, yes sometimes you will lose, other times you will predictably win. Bots will be challenging bots unexpectedly and predictably, but they will almost always originate from human programming originally.