Computer-based models to replace the investment advisor? | The Register

From: John Conover <>
Subject: Computer-based models to replace the investment advisor? | The Register
Date: Tue, 22 Aug 2006 14:01:35 -0700

Interesting article on computer-aided equity trading from The Register.

What would happen if everyone did computer-aided/algorithmic trading?

Not much.

Fractional Brownian fractal characteristics are stable-in the sense that
if everyone knew the characteristics were fractional Brownian, the
characteristics would be the same as if no one knew. It is a unique
property of the Fractional Brownian, (and its geometric progression,)

Algorithmic trading has become quite common since its inception in the
late 70's, and the only thing that has changed is the "spread," (it used
to be that brokers made money off of the spread-buying a stock
specifically to fill an order at a profit; the spread has become so
small that there is little money in operating the spread, thus the
reason in the 90's for all the phone calls, "have you considered
investment opportunities in high tech companies ...")

What has happened is that the equity markets have become "fair," (in the
sense that everyone has the same chances of making money-finding an
advantage to exploit is increasingly difficult, usually requiring
computational techniques.)



John Conover,,

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