Beating Alpha

iterating towards truth

Mementos

Narrow world and stable structures

I have read book Range that I can highly recommend. In the book there is a great parallel about AI: “AI systems are like savants, they need stable structures and narrow worlds.”

I think this claim is brilliant. Of course it is a matter of time until this frontier is tackled by AI as well, but I believe it will take some time. In a meantime, there is a paradox we can all pay attention, it is called Moravec’s paradox: “machines and humans frequently have opposite strengths and weaknesses.” This is a concept of a “bionic man” I have been thinking a lot over the years leveraging it in my own trading.

So what is the conclusion of Moravec’s paradox? The conclusion is that we are good at connecting the dots, connecting contexts that at first sight have noting in common. We should grow our expertise in range of those contexts and leave the narrow world and stable structures to computers. That is our edge going forward.

2 Comments

  1. Bu Ča

    November 27, 2019 at 5:51 pm

    Hopefully, this is also our chance to survive the boom of AI. If the Moravec’s paradox is correct and the AI needs our strengths to compensate for its weaknesses, maybe it will let us live :).

    1. lechiffre

      December 2, 2019 at 12:16 pm

      Fingers crossed 🙂

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