Algorithms Prove No Match For Market Tumble

from the all-in-the-data dept

Earlier this year, famed inventor (among other things) Ray Kurzweil announced that he was getting set to launch a new investment company that would employ advanced mathematical techniques to discern patterns in the stock market. Of course, just because Kurzweil is widely considered to be a genius, it doesn't mean he'd have any midas touch when it comes to the stock market. Furthermore, quant funds, as they're known, aren't novel. Lately, in fact, they've been getting slaughtered as the market swings about in unpredictable ways. Top tier investment bank Goldman Sachs has announced that its closing one of its premier quant funds in light of recent losses. Obviously computers have become an indispensable tools in modern day investing, but no algorithm or mathematical genius can guarantee good performance in all markets.

Filed Under: algorithm, quant


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  1. identicon
    Doug, 10 Aug 2007 @ 5:04am

    Black and BS ..

    Black and Scholes, more like Black arts, People who bet other peoples money on the stock market by pretending to have a method of predicting the future, through the use of quasi-mathematical terms borrowed from calculus (1666), the number of the beast !!!

    Of course if the market only used the same data as the quant funds then the predictions would be .. predictable. What they should do is outlaw people reading newspapers or web articles, like this one.

    In case anyone don't realise it by now, noone can predict the future not even our current version of the priesthood in white, scientists. You can't predict the future from past events as the future is unpredictable.

    A financial mag here one did a test, they set up a fund manager and amonkey with a pin to 'invest' in a protfolio for a set period. The monkey won !!!

    Might as well wave a dead chicken at it. ( Slaughter me a calf and examine the entrails therein that I may place a put option .. :)

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