Hedge Fund Technology

Filed in archive Hedgetalk on January 8, 2007

A lot of the stories I find myself writing about these days have something to do with computers or algorithmic trading, to me it sounds like card counting or a sophisticated way of manipulating a one armed bandit at first. Well, it is a form of high stakes betting and in a lot of cases I'm noticing computers are deciding more and more often which stocks to pick.

Over at Barclay's Global Investors, they have Ph.D.s, mathematicians and other quantitative analysts, or quants, spending their time at designing investing strategies for thousands of stocks, bonds and currencies. Then they use computers to pick which ones to buy and sell. And it seems to be working, with $1.7 trillion in assets and a stake in 65 of the world's 100 largest pension plans, they can afford to spend their time thinking.

There are also conferences now available, Chameleon productions is holding a conference on the future of algorithmic trading this March in London. And its not for mathematicians, its for high risk traders. I guess we'll see if patterns and cycles can predict a reliable trading platform.

When they figure it out, I'll be waiting.