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reddog

How would a bot with artificial intelligence invest?

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If Google or whoever were able to create a sophisticated Artificial Intelligence bot that could learn.

 

Then supplied exactly in an unbiased way how the world economy work's, and supplied all historic data, as well as all data on politics, wars etc.

 

What would happen?  What assets would the bot invest in, if it was told it needed to invest for 30 years?

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19 minutes ago, Si1 said:

Is quantitative finance not on your radar?

The thing is though quants use mathematical models that are built by humans, that have bias.

 

The same with robo-trading, it is a computer program built by a human, who has put their own biases in there.

 

If there was a genuine plan to build a machine with no bias, put all the historic knowledge in the world into it, and then allow it to think, thus allowing the removal of any bias you may have put in there, what would it do?

Edited by reddog

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2 minutes ago, reddog said:

The thing is though quants use mathematical models that are built by humans, that have bias.

 

The same with robo-trading, it is a computer program built by a human, who has put their own biases in there.

 

If there was a genuine plan to build a machine with no bias, put all the historic knowledge in the world into it, and then allow it to think, thus allowing the removal of any bias you may have put in there, what would it do?

It would have to try and work out what all the other such bots were going to do......

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3 minutes ago, reddog said:

The thing is though quants use mathematical models that are built by humans, that have bias.

 

The same with robo-trading, it is a computer program built by a human, who has put their own biases in there.

 

If there was a genuine plan to build a machine with no bias, put all the historic knowledge in the world into it, and then allow it to think, thus allowing the removal of any bias you may have put in there, what would it do?

But now you have to explain what you mean by "artificial intelligence".  Even Google DeepMind assumes a human devised "model" (the neural network), although it is often talked about as though it's "model free".  For sure, algo trading firms do use deep learning techniques that would be considered "artificial intelligence", although of course no one can obtain "all" the information in the world to feed it.

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Check out EMG Man Group - uses automated trading.

Although Purple bricks has out performed as a stock pick since I last mentioned it. Now up to £4 from £1.57. You can't lose with property. A computer cannot rationalise the irrationality inherent with humans.

---

If a computer can eliminate risk in the market, then the return could be infinite.

Edited by 200p

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It would probably not invest itself, but devise a series of 'Get Rich Fast' seminars in hotels, and sell dvd's and books to greedy novices.

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Following up on the "it's been programmed by humans" point - if it was somehow unbiased and free of that then why would it bother investing at all? Either it's got motives of its own and would work at whatever best maximised those, or it wouldn't have any motive for doing anything.

If it was hardcoded to the arbitrary "most money back", well, if anyone could answer that and you're assuming that it would be as good at that as is possible, then I'd be doing it myself and certainly not telling everyone else, not that "maximise money" (which really boils down to "maximise rate of consumption") really gets us anywhere worthwhile.

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1 hour ago, reddog said:

If Google or whoever were able to create a sophisticated Artificial Intelligence bot that could learn.

 

Then supplied exactly in an unbiased way how the world economy work's, and supplied all historic data, as well as all data on politics, wars etc.

 

What would happen?  What assets would the bot invest in, if it was told it needed to invest for 30 years?

Silly game, the only way to win is not to play.

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50 minutes ago, juvenal said:

It would probably not invest itself, but devise a series of 'Get Rich Fast' seminars in hotels, and sell dvd's and books to greedy novices.

:lol:

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It would use its superiour speed and iq to front run every order and sell it back to us, essentially owning nothing and making everything. 

 

Its a a difficult question though because markets are where people transact, not much different to the question of what fruit and vegetables would two ai buy at the market. None, they're not humans and have no need to transact. 

 

So so it's a game essentially. And if one entity can cheat, which an ai can as it can out manouvere us in every way then they will own everything. 

 

It will learn to push markets around with its size, forcing people out, crashing markets one day, moving them up 1000 points the next. It will create something we've never seen before and couldn't even comprehend. It's a game, it has no emotion of fear and greed, but will understand we do and use it against us. 

look at the ai for go. It's done things never seen before in a game that's 1000 years old. 

Edited by honkydonkey

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13 minutes ago, honkydonkey said:

 

It will learn to push markets around with its size, forcing people out, crashing markets one day, moving them up 1000 points the next. It will create something we've never seen before and couldn't even comprehend. It's a game, it has no emotion of fear and greed, but will understand we do and use it against us. 

Sounds like something we see everyday

Sounds like the housing market. 

Edited by knock out johnny

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If I remember correctly Amazon applied an incredibly sophisticated AI model to automate their pricing and the end result was ludicrous differentials on the same products between themselves and Amazon Market sellers set pricing against each other. Junk in, junk out... in a trading environment i'd expect to see spontaneous boom and busts on steroids when two or more bots inevitably compete in the same space. Financial spam if you like.

Edited by longtomsilver

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