Machines Now Beating Humans At Calling Market Bottoms

The robots have won.
And they can clean the floor! By Handitec (Own work) [Public domain], via Wikimedia Commons

Photo: Handitec, via Wikimedia Commons

They may be nothing to fear, at least for more than a few hours—unless you like having the means to feed yourself and your family—but robots can now do more than just replace Warren Buffett and help poor people invest their handful of pennies and master obscure Chinese board games. Now, they can accurately predict the bottom of the market. At least this time.

Computer-driven quants, which pick shares based on factors like momentum and size, have been the only hedge fund category to buy additional stock in 2016, data from Credit Suisse Group AG show. The move paid off as the S&P 500 Index crept within striking distance of all-time highs, while hedge fund managers were busy unloading shares….

For some, it’s a blow to the cause of human judgment in the stock market. Inputs not deeply steeped in mathematical models, like industry assessments and economic views, caused managers to hold onto bearish bets on energy.

Machines Beat Humans in Hedge Fund Quest to Time Market Bottom [Bloomberg]