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Subject: Re: OT: AI Will Kill Stock Exchanges

Author: Frank Schneider

Date: 10:54:04 06/06/01

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On June 06, 2001 at 13:01:56, Graham Laight wrote:

>Once upon a time, chess computers were expensive, and not especially good.
>Gradually, they became cheaper and better. Now anyone (who already has a
>computer) has the ability to sit at home and generate excellent chess moves very
>cheaply.
>
>Right now, if you want to buy the stock selection program "Tradingsolutions", it
>will cost you $1,000. Presumably, it will allow you to select stocks and time
>your purchases to improve your chances of making money.
>
>In the fullness of time, one would expect the number of people using such
>programs to increase, and therefore for stock market timing and selection in
>general to improve.
>
>However - if most market participants become cleverer at stock selection, nobody
>will ever buy a stock if it is significantly above its "true" (by consensus of
>trading programs) price. Equally, people will be unwilling to sell below the
>"true" price.

In chess the current position is known to both players/programs.
In the stockmarket different people will always have different
estimations about the prospects of a company and that will influence
the prices.

>
>The consequence of this will be that stock market graphs, which are currently
>bouncy and full of life, will become a deathly dull flat line. No more
>opportunities to make "a killing" for anyone.

Maybe technical analysis will more and more become a self-fulfilling
prophecy.

Frank

>
>Right now, I believe that this, fantastic as it sounds, will actually happen.
>
>AI could have many strange, unexpected consequences!
>
>n.b. - website for AI trading - http://www.neural101.com
>
>-g



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