Chapter 27 is a fascinating time capsule. Harris wrote this around 2003, when the debate between floor trading and electronic trading was still alive. The NYSE was building a new trading floor. The Chicago exchanges were still mostly pit-based. Reading it now, knowing how completely electronic trading won, is like reading someone in 1995 carefully weighing the pros and cons of email versus fax machines.
Previous: Chapter 3 Part 1
We’re still in Chapter 3 of Tim Richards’ “Investing Psychology.” In Part 1, we covered how situations mess with your head. Now let’s talk about something even weirder: your mood, the weather, and why shouting “Fire!” in a theater is basically what happens during a market crash.
Chapter 2 of Artificial Intelligence in Finance is technically labeled a “Preface,” but it does a lot more than set the stage. Hilpisch opens with a quote from Robert Shiller asking whether financial markets will ever become truly perfect, with every asset priced correctly. It is a big question. And honestly, the way the chapter frames AI in finance around that question is what makes it interesting.
Book: Artificial Intelligence in Finance Author: Yves Hilpisch Publisher: O’Reilly, 2020 ISBN: 978-1-492-05543-3
Here’s a question that bugs me. Can AI actually beat the stock market? Not in a sci-fi movie way. In a real, consistent, make-money-while-you-sleep way.