Howard Marks released his latest memo this week on the intersection of people, computers, and investing. He offers an interesting perspective on the current trends in passive investing, algorithmic investing, and artificial intelligence.
The gist of the entire memo can be summed like this: whether the decision-making process behind investing is better off in the hands of humans or computers and how that might impact markets?
Let’s cover a couple things first.
There will always be a select few people with an exceptional skill set to do it all manually (arguably, even they have an internal set of rules they follow). As for the rest of us, the evidence points to real benefits in using a rules-based or algorithmic process. So I believe the real discussion for the majority of investors revolves around just how rigid, flexible, or adjustable those rules should be. Continue Reading…