
This Hedge Fund Left Decisions to a Computer – And Made 19% - puppetmaster3
http://www.bloomberg.com/news/articles/2016-03-21/this-hedge-fund-s-computer-says-sell-japan-debt-after-19-gain
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danielhooper
This isn't super related to the article, but it reminds me of a chapter in
Daniel Kahneman's _Thinking Fast and Slow_ on a similar subject that I wanted
to share.

In this chapter, Kahneman recalls a study performed by Paul Meehl, who
discovered that statistical algorithms trumped expert intuitions roughly 60%
of the time, with the other 40% of cases resulting in draws. These analysis
were performed across a variety of different fields including "violations of
parole, success in pilot training, and criminal recidivism."

Meehl suggests that experts form inaccurate predictions due to their
overconfidence and unnecessarily complex analyzation. Another possible reason
is that humans are generally inconsistent when summarizing complex
information. An example being "radiologists who evaluate X-rays as normal or
abnormal contradict themselves 20% of the time when they see the same picture
on separate occasions."

