Jun

13

The first chess computer, 1960There is a vast literature supporting the use of mechanistic decision in repetitive situations, [instead of] over relying on human expertise. Forgetting about accuracy for a moment, which is key, humans are quite inconsistent in the way they use information. Show an expert the same fact set on repeated occasions and the conclusions only correlate at about 0.50. In other words, the facts only account for about 25% of the variation in the expert’s final conclusion. This suggest that the way information is being weighted from instance to instance is inconsistent or the expert is considering information outside of the fact set. When it comes to accuracy the decision algos do better, overall.

Rich Bubb adds:

Here is an interesting example. Soon all of you will be replaced by machines [LOL]:

[An automated investing] system was developed by Robert P. Schumaker of Iona College in New Rochelle and and Hsinchun Chen of the University of Arizona, and was first described in a paper published early this year.

It's called the Arizona Financial Text system, or AZFinText, and it works by ingesting large quantities of financial news stories (in initial tests, from Yahoo Finance) along with minute-by-minute stock price data, and then using the former to figure out how to predict the latter. Then it buys, or shorts, every stock it believes will move more than 1% of its current price in the next 20 minutes" and it never holds a stock for longer."

Source: MIT Technology Review Blog

Nigel Davies writes:

That's a pretty sad comment on fund management standards. Humans have put up one hell of a fight against computers on the chess board using raw (unaided) brain power and still beat the best machines if they're armed with an ordinary PC and have a longer time limit. And that's to say nothing of the drubbing that Go players have given computers, even giving so far as to give them odds.


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