A Smarter Computer to Pick Stocks

November 25th, 2006

This is a funny article about black box trading systems, along with quotes from crackpot, technology fetishist and (would you believe?) hedgefund manager, Ray Kurzweil.

Sure, “invest” your money in a half cocked bum fight between super computers!

Via NY Times:

Ray Kurzweil, an inventor and new hedge fund manager, is describing the future of stock-picking, and it isn’t human.

“Artificial intelligence is becoming so deeply integrated into our economic ecostructure that some day computers will exceed human intelligence,” Mr. Kurzweil tells a room of investors who oversee enormous pools of capital. “Machines can observe billions of market transactions to see patterns we could never see.”

The listeners, attendees of a conference sponsored earlier this month by the Capital Group Companies, are slightly skeptical. Some have heard that Mr. Kurzweil, 58, who takes more than 150 vitamins and supplements a day, believes people will eventually live forever. Others know he has said that in 2045, man and machine will achieve “singularity,” and humans will hold their breath for hours thanks to nanomachines in our bloodstreams.

…

But as these new techniques proliferate, some worry that promotion is outpacing reality. These techniques may be better for marketing than stock picking.

“Investment firms fall over themselves advertising their latest, most esoteric systems,” said Mr. Lo of M.I.T., who was asked by a $20 billion pension fund to design a neural network. He declined after discovering the investors had no real idea how such networks work.

“There are some pretty substantial misconceptions about what these things can and cannot do,” he said. “As with any black box, if you don’t know why it works, you won’t realize when it’s stopped working. Even a broken watch is right twice a day.”

Posted in Economy, Rise of the Machines | Top Of Page

2 Responses to “A Smarter Computer to Pick Stocks”

  1. George Kenney says:
    November 26, 2006 at 12:06 am

    Hi Kevin,

    What does it matter what stocks you pick if the currency they are based in (USD) is devaluing like a rock?

    http://www.dollarcollapse.com/

    http://www.financialsense.com/fsu/editorials/schiff/2006/1124.html

    I have been waiting for a long time for it to go below 85, and now it is significantly below that!

    George

  2. Kevin says:
    November 26, 2006 at 12:26 am

    My wife and I are growing our own food and raising goats and cows at the moment, if that’s any indication of our faith in this system. I posted this story because it’s proof that “investing” has become a totally absurd gamble. And that’s a kind assessment. It assumes you still believe in funny money, fiat currencies! HAHA.

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