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 Via Anarcho-Capitalists' Forum: Can computer programs pick stocks?

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RR Phantom

RR Phantom

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Via Anarcho-Capitalists' Forum: Can computer programs pick stocks? Vide
PostSubject: Via Anarcho-Capitalists' Forum: Can computer programs pick stocks?   Via Anarcho-Capitalists' Forum: Can computer programs pick stocks? Icon_minitimeTue Mar 26, 2013 7:29 pm

Humans have a problem with uncertainty – we'll do anything to avoid it. Some fast for months, others peer into microscopes or read horoscopes. We fill our calendars, plotting and planning as if the future were told.

And we buy software programs telling us what a stock is worth, to two decimal places. We just can't help ourselves. Humans are wired to get sucked in.

Our ancestors lived life according to predictable patterns because it reduced the chances of being eaten and getting lost. Back then the past was a good guide to the future.

The cost we pay now is in our tendency to extrapolate when it doesn't make sense to do so.
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Stockpicking software is one giant exercise in extrapolation. But the stock market is a different environment to the one our evolutionary instincts have primed us for, one where the past is not a reliable guide to the future.

Read more: http://www.smh.com.au/business/intelligent-investor/can-computer-programs-pick-stocks-20130325-2gppd.html#ixzz2OgwEcLQc
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