Humans versus machines (30/03/2016)
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
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Jane
:
Hi,
As a data analyst I tend to foresee that machines will overtake humans in almost every facet of employment, it’s just a matter of when. Some jobs can be taken over immediately whilst others (social interactive ones in particular) will take longer. The underlying reasons for the delay, I believe, are:
(i) how comfortable people are with this technology
(ii) how our society will deal with the ever increasing unemployment / social structure break down (rich vs poor that will occur)
see http://www.pewresearch.org/fact-tank/2013/12/05/americans-see-growing-gap-between-rich-and-poor/
In the case of share/business analysts several studies have shown that various metrics eg Piotroski F score, Growth with price momentum etc can beat human analysts over the long term. If we include deep neural networks into the mix, with the sole objective of increasing shareholder value then it only (?) takes:
(i) some computer whiz to program a black box to do the above
(ii) market it well
It will have a monopoly over the managed funds currently available, the long term consequences of which could be interesting.
Alan Ferguson
:
Yes… Spurious correlations. I recall a couple from my student days.
The USA fishing industry was generously patting itself on the back for the greatly significant increase in catches over the previous period measured.
What they hadn’t taken into account, was that both Hawaii and Alaska had recently become new states within these United States of America, both have major fishing industries, and accounted for all of the increases that the industry was so proud of.
Similarly, in a UK election from long ago, when Ted Heath and Harold Wilson were facing off for the top job. Heath’s Conservative party, sponsored a survey that showed that Heath would win easily over Wilson’s Labour Party.
Contrary to what the survey showed, Labour have a landslide victory!
Completely blindsided by the outcome, as you might expect, the Conservatives put a “Please explain” to the firm they had employed to undertake the survey. How could they have been so off the mark?
It turns out that the pollsters had done a telephone survey in order to try and gauge the voting intentions of the nation. This being the mid 1970’s, mostly middle class Conservative voters would own a telephone, in stark contrast to hardly any working class Labour voters. Oops!