The Most Powerful Artificial Intelligence Knows Nothing About Investing. That’s Perfectly Okay.

By February 17, 2021 July 27th, 2021 No Comments

Institutional Investor article bAngelo Calvello,

“There’s no denying that 2020 was an exceptionally trying year. Few know this as well as active managers, who continued to struggle to provide the promised returns — perhaps none more than celebrated quantitative investment managers . . . as William Cohan writes in Fast Company, “An exceptional trader would be thrilled with a 51 percent success rate — similar to the house edge at a Las Vegas blackjack table.” . . . “Financial markets are not stationary. They change all the time, driven by political, social, economic, or natural events.” Denialists claim that, unlike MRIs and board games, markets are simply too complex and random — and this complexity and randomness overwhelm the ability of DL and DRL to consistently find actionable insights in the data.

Jeff Glickman, co-founder of AI-based investment manager J4 Capital, makes this argument in Cohan’s Fast Company article:

Read more via Institutional Investor