Computer says no. If something has not worked for five years, most people would conclude that it was broken

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Computer says no. If something has not worked for five years, most people would conclude that it was broken. Tell that to the geeks managing quant hedge funds, who craft elaborate algorithms to profit from market movements. Their prized formulae have misfired since 2009, losing money in four of the past five years. Unless their results improve markedly, the giant funds will finish this year as the worst-performing hedge-fund strategies. After prospering through 2008, the sector swelled from $91BN to $215BN. Unfortunately, the influx of investment coincided with the reversal in the strategy's fortunes. The main problem is not with the quants' models, practitioners insist, but with the markets themselves. In the aftermath of the financial crisis, not even the world's wiliest supercomputers can process the distortions created by the world's central bankers. Read the whole article (VIEW LINK)


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