Author Topic: Artificial intelligence and machine learning Unit trusts  (Read 1779 times)

Eriek Weisz

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Artificial intelligence and machine learning Unit trusts
« on: July 28, 2017, 10:31:56 am »
Hi All,
 
I would love to pick your brains as to your views of some of South Africa's new unit trusts that are marketing themselves as Machine Learning / Artificial Intelligence asset managers.
 
I see Sanlam has launched a few unit trusts pushing the technique. It's new to our market. Right now its the only Unit trust of its kind that I'm aware of. I know of 2 hedge funds in Western Cape that specialize in Machine Learning but they don't have a unit trust yet.
 
Do you think that more and more funds will move in that direction? Would you invest in something like this?

gcr

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Re: Artificial intelligence and machine learning Unit trusts
« Reply #1 on: July 28, 2017, 07:11:17 pm »
There is no history on their performance and also do they publish the churn in trades per day.
Maybe they also need to have an indemnity/guarantee in place that in the event of an epic fail they will reimburse their customers
Also did not robotic trading have a devastating impact on the NYSE about 10 - 12 years ago?
Not everything that counts, can be counted, and, not everything that can be counted counts - Albert Einstein

PlatinumWealth.co.za

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Re: Artificial intelligence and machine learning Unit trusts
« Reply #2 on: July 30, 2017, 08:49:29 pm »
Still 5 years away from where I would recommend them, but definitely the future.
www.PlatinumWealth.co.za <- South African Investment and Finance forum.

MoneyChief

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Re: Artificial intelligence and machine learning Unit trusts
« Reply #3 on: July 31, 2017, 09:49:59 am »
I did some artificial intelligence stuff at university, Neural nets, hidden markov models, gaussian mixed models, etc. I think they are nice toys for academics, but not so good at making money in the stock market. The short and medium term movements of the stock market is random (doing a Fourier transform on a typical stock price results in a flat line, just like white noise...), it is only in the long term that the market follows earnings. Even if the market is slightly non-random, the profits gets eaten up by transaction costs so you end up flat or negative.

Hamster

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Re: Artificial intelligence and machine learning Unit trusts
« Reply #4 on: July 31, 2017, 09:58:01 am »
Well, while not strictly AI, there was a guy at the big blue who made use of another provider's API (PSG maybe?) and had a futures trading bot running on it and was doing reasonably well. Still remember him asking Simon why he doesn't use trading bots and he told him that a trading bot can make thousands of mistakes a second whereas he can only make one :D

PlatinumWealth.co.za

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Re: Artificial intelligence and machine learning Unit trusts
« Reply #5 on: July 31, 2017, 11:34:53 am »
Trading bot can also make thousands of correct decisions in a second.
www.PlatinumWealth.co.za <- South African Investment and Finance forum.

gcr

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Re: Artificial intelligence and machine learning Unit trusts
« Reply #6 on: July 31, 2017, 04:16:57 pm »
The cleverness of these bots is not in the writing of the program parameters but in encapsulating of the thinkers and all his/her what if's.
A number of bot got squeezed out in the 2007/2008 market downturn - so they seem to be quite good in an incrementing market, but, suspect in a quick turning market.
A bit like bit coin mining and the actual bit coin price movement
Not everything that counts, can be counted, and, not everything that can be counted counts - Albert Einstein

Orca

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« Last Edit: August 15, 2017, 07:56:55 pm by Orca »
I started here with nothing and still have most of it left.

Hamster

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Re: Artificial intelligence and machine learning Unit trusts
« Reply #8 on: August 16, 2017, 07:02:58 am »
Now imagine, 20 years from now, where everybody is either using ETFs/passive investment schemes and trading bots (the same trading bots because like all things the two or three best survives).

Either the market is dead with little or no trading happening because of an equilibrium state OR utter and complete CHAOS. BE WARNED! *Dun dun dun DUUUUUUUHHHHH!!!!*