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COMPUTER DRIVEN FUNDS have been around for decades, but like everything else in our society to the extreme that is all anyone knows any more extreme regardless of the long range effects. Like IRAQ for one. As is the computer drive fund. Have we forgotten already the mega fund of the 90 s that used MATH P.H.D.s and option pricing math celebrates to create their so called UN beatable computers. Capitol something or other While they played golf.
Remember those results, now it’s that on BALCO with a little feedlot hormone thrown in. Some estimates put the # has high as 85% of all volume attributed to computer driven hedge funds.
About a year ago I was searching money manger employment sites that I have had accuses to for well over a decade. Looking for a new gig like I have done for years and years All that I was finding was MATH P.H.D. wanted salary 500,000 plus. WOW I knew then that this industry was in trouble I have never had trouble finding a 90 day or one year contract in my long career. I was replaced by a MATH GEEK.
Well to all of you computer driven funds remember this, INVESTMENT IS A ART, NOT A SCENCE. And one other thing short time gains create long term problems in regard to ones life span.
The flash crash was a byproduct of the over use of this lazy style of making money and has very little to do with creating wealth. MATH NERDS are typically as anal as it gets so one math nerd has his matrix built all the math nerds have the same matrix built. They all dropped from the same tree and it was not NEWTONS TREE. Mark my words we have seen the tip of this iceberg, and the whole computer hedge fund Industry has become the plural titanic.
Kevin Dwayne blanch
10/14/10
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