Machine Learning Won’t Crack the Stock Market — But Here’s When Investors Should Trust AI
— June 8, 2020
By Vasant Dhar
Having operated systemic machine-learning-based investing programs for two decades, I don’t believe there is a code to crack. What does exist is the constant search for a systematic “edge” where a machine recognizes when and how much risk to take.
Those considering handing over their money to such programs need to ask tough questions about what gives them an “edge” and — most importantly — whether it will be sustainable. Additionally, the sobering law of machine-based trading is there is an inverse relationship between performance and capacity of a program. Systematic AI machines are subject to the same law.
Read the full MarketWatch article.
Vasant Dhar is Professor of Information Systems.