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Re: AI and Investing

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  • G. Fredrick Nowatzke
    It s retively useless to have AI that deals with a 1929 event. That is a Black Swan event. You d be waiting decades for such an event. Much more profitable to
    Message 1 of 5 , Nov 16, 2008
      It's retively useless to have AI that deals with a 1929 event. That
      is a Black Swan event. You'd be waiting decades for such an event.
      Much more profitable to predict what a financial instrument will do
      in the next few days or the next few hours. That gives you a bunch of
      trades a week instead of a few trades every 100 years.

      --- In artificialintelligencegroup@yahoogroups.com, "Unmitigated
      Gall" <Spammastergrand@...> wrote:
      >
      > --- In artificialintelligencegroup@yahoogroups.com, james.bliss@
      > wrote:
      > >
      > > There are plenty of these types of investment programs which
      exist
      > in proprietary environments. They are at the various investment
      > houses. They are good to an extent but are completely incapable of
      > handling the events which we just went through across the globe
      since
      > that type of event last occurred in 1929 with some minor events
      > similar to it in the 60s and 80s.
      >
      > Yes. I took a class in securities and market analysis once and was
      a
      > bit surprised by technologists. The cup and saucer. It would come
      > close to vodoo economics, but there are trends you can study.
      >
      > For example you have interest paying treasuring bills. Something
      that
      > guarantees a certain return on a $1000 bill. Prime rates effect
      their
      > value. So does inflation.
      >
      > Interest bearing bonds performance effect non interest bearing. So
      by
      > entering numbers you should be able to make some predictions about
      > categories of stock in general.
      >
      > But considering the value of this type of thing - billions, if not
      > trillions, it is like the gambling industry. Just a slight
      advantage
      > is huge. Massive, eleboarate casinos, free drinks, rooms, cheap air
      > fair, paif for with only a slight statistical advantage at the
      > tables.
      >
      > The issue is, computers can't read the news. If I read abotu Enron
      > going broke on Yahoo 5 minutes after it happend, I would know
      before
      > a machine to short sell Enron.
      >
      > It would be interesting to see some of these systems and what they
      > are storing or doing. With enough stored historically, you could
      look
      > at how this does against that. Company against company, industry
      > against industry, investment type against investment type and make
      > some predictions.
      >
      >
      > >
      > >
      > > -------------- Original message ----------------------
      > > From: "carlosuv7403" <carlosuv7403@>
      > > > Hi Jerry,
      > > >
      > > > I tried some years ago, I did a software for modelling and try
      > > > to "guess" future market values of shares, commodities, etc.
      > > >
      > > > It didn't work, I abandoned, but Im still convinced that such a
      > system
      > > > could be good for investment.
      > > >
      > > > The problems that I found are:
      > > > - a result depends on the amount of data that you have, the
      more
      > years
      > > > of stock-commodities-currencies you have, the better. The
      > information
      > > > is available on internet (to pay for it)
      > > > - Ia models need time to develop a good investment behaviour,
      > and, with
      > > > the great amount of data, it will take more than a few hours to
      > get
      > > > some convincing result
      > > > - markets are more unpredictable that I thought. I read a
      > japanese
      > > > analist who said something like markets are not moved by
      > intelligence,
      > > > but are moved by ignorance and fear. I made me think a lot !
      > > > - keep the system simple, that was I think my big mistake, I
      > included
      > > > more that 1000 prices of stocks, transactions, commodities
      > prices,
      > > > bonds, etc. etc., with so much data, and a little horizon of
      > data, IA
      > > > would get results that appear to be good, but in fact are a
      > disaster.
      > > >
      > > > I am convinced that it can work (with some considerable error
      > margin)
      > > > because I remember from my finance courses there was people who
      > made
      > > > lot of money analysing graphs, yes market graphs curves, they
      > > > classified different kind of curves and they could predict some
      > > > behaviour. A software can analize a graph.
      > > >
      > > > Carlos
      > > >
      > > >
      > > >
      > > > --- In artificialintelligencegroup@yahoogroups.com, "G.
      Fredrick
      > > > Nowatzke" <nowatzke60130@> wrote:
      > > > >
      > > > > I've been researching short term investment stratigies using
      a
      > number
      > > > > of soft computing approaches. The resutls appear to be very
      > positive.
      > > > > Is anyone else looking into this type of application?
      > > > >
      > > > > Jerry
      > > > >
      > > >
      > > >
      > > >
      > >
      > >
      > >
      > >
      > > [Non-text portions of this message have been removed]
      > >
      >
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