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Interesting, it is reasonable to suspect that many brokerage houses (with billions invested in R&D and very intelligent individuals) are using the same approach
by scw 19y ago
Interesting, it is reasonable to suspect that many brokerage houses (with billions invested in R&D and very intelligent individuals) are using the same approaches to the problems with the added benefit of a human driver behind the wheel. It seems to me that purely using automated approaches to investing (in this case, GP market timing) will always be inferior to the insights of intelligent investors coupled with intelligent computing, but that alone would be a major shift from most investors current practices.
- marvin 19y agoActually, there was a link about this a little while back: http://www.bloomberg.com/apps/news?pid=20601109&sid=ayjImYcoCiH8 http://www.bloomberg.com/apps/news?pid=20601109&sid=ayjI.... I am fascinated no end that a group of nerds is able to game the system to such an astounding degree. In this century, it isn't by gaming the casino that loads of cash can be made. These guys run a hedge fund that is so successful it no longer accepts money from the public, and only manages the assets of its own employees. Using different secret strategies and to an extent human-supervised automatic trading. Its annualized return since its birth in the eighties has been on the order of 37%.
- ctkrohn 19y agoThere are certainly plenty of firms that use AI-based investing techniques, but my understanding is that after being fashionable in the late 90s, they've fallen out of favor. After a couple AI-based systems "blew up," people realized that they're essentially opaque: you can't look at a neural network or a genetic algorithm and realize precisely what went wrong and fix it for next time. There's nowhere to place the blame -- not even on the programmer, since he didn't directly create the trading rules.