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Your first point about AI changing markets was interesting until you put it in the context of automated trading, thats too small scale and kind of missing a big

Your first point about AI changing markets was interesting until you put it in the context of automated trading, thats too small scale and kind of missing a bigger and more existential point. The long tail of AGI is that markets themselves are meaningless, and I say this as someone who worked at an HFT firm in the past. Automated trading already exists, but automated trading firms value explainability and reproducibility. Most common models in the quant trading space are linear regressions - they are simple and explainable. If you made an AI trade, it better be explainable, but explainable AI seems pretty far away at this point and it doesn't seem like something many companies care about right now. And despite all the automation in the trading space, there are still traders. Humans are decent at analyzing idiocyncratic events (0-shot learning), but machines are not (yet).

ewzimm 3y ago
I agree with you about markets as such being meaningless in the end because they're fundamentally social processes. But as technology makes efficiency in trading less reliant on humans, I think the social layer will disappear. Again, I'm no expert in trading, and I'm sure you understand the processes better than I do. I know that automation has been a big part of trading for a long time. But is fully automated and fully explainable AI really that far off? As in unattainable within the next decade? We're all guessing here, but judging on recent progress, I would bet that AI will be able to do everything a human trader could do, including providing the rationalization in a comprehensible and convincing way to managers, within 10 years at the very least, probably sooner. I would bet that AI can even do a better job of hitting the specific points that will be convincing to target the decision makers before that. The focus on AI in the stock market is already evidence of that. Right now, it's the people boosting AI that are convincing investors to put their money into it. And once they're invested, they're going to be more likely to be convinced by confirmation bias, therefore more likely to listen to the advice generated by the product that they already invested in. That's a cycle that will be hard to break.
- lm28469 3y ago
  It's already like 70-75% fully automated by "ai"

ewzimm 3y ago

I agree with you about markets as such being meaningless in the end because they're fundamentally social processes. But as technology makes efficiency in trading less reliant on humans, I think the social layer will disappear. Again, I'm no expert in trading, and I'm sure you understand the processes better than I do. I know that automation has been a big part of trading for a long time. But is fully automated and fully explainable AI really that far off? As in unattainable within the next decade? We're all guessing here, but judging on recent progress, I would bet that AI will be able to do everything a human trader could do, including providing the rationalization in a comprehensible and convincing way to managers, within 10 years at the very least, probably sooner. I would bet that AI can even do a better job of hitting the specific points that will be convincing to target the decision makers before that. The focus on AI in the stock market is already evidence of that. Right now, it's the people boosting AI that are convincing investors to put their money into it. And once they're invested, they're going to be more likely to be convinced by confirmation bias, therefore more likely to listen to the advice generated by the product that they already invested in. That's a cycle that will be hard to break.

lm28469 3y ago
It's already like 70-75% fully automated by "ai"