The FT is bearish on AI's ability to outperform human traders. The FT believes that until scientists develop a truly intelligent investing system, rather than a trend follower, the human fund manager has no reason to fear. The FT supports this arguement with 3 points; (1) Human's that focus on value over the long term, rather than price trends, should always be able to profit, (2) The computer-driven hedge fund is run and designed by humans, meaning its cold-eyed technology must contend with the emotional reactions of investors who are human. (3) When everyone is using the same trading strategy, no one is left with an edge — the super computers will cancel out each others’ advantage.
Many human investors are enduring a miserable start to 2016 as stock markets and commodity prices have slumped. At the same time some trend following computer-driven hedge funds have made double-digit returns during the sell-off. Is man once again on the verge of being trumped by the machine like the Russian grandmaster? The answer is no. Here are three reasons why the best human investors are likely to be able to beat the “bots” for a long time to come. First, human investors can follow Kasparov’s strategy and seek to use the strengths of algorithmic trading programmes against them. To paraphrase Oscar Wilde, trend-following hedge fund computers know the price of everything, but the value of nothing. This means human investors who focus on value over the long term, rather than price trends, should always be able to profit.