How Humans Can Always Beat Computers


Stocktoberfest was packed with algorithmic and quantitative panelists this year. A big theme was harnessing big data to gain advantage and insight. We even debuted a product called, which is as much about giving people back their intuition via quantitative analysis as it is about uncovering new ideas.

It is easy to feel like our world and livelihood is being “eaten by software”. Michael Copeland wrote a piece in The Atlantic about the relative strengths and weaknesses of humans and our computer overlords and how we will hopefully live in harmony.

As much as we depend on our gadgets and their accompanying software to do more of our daily tasks—from reminding us to go to meetings to crunching stats for our favorite sports players—human intelligence is far from obsolete. On the contrary, MIT computer science professor Rob Miller believes there will always be a margin between what humans understand and what computers can do.

He provides the following example: Give a computer a paragraph of terribly hard- to-read handwriting today and no available algorithms can decipher the scrawls. But give it to a group of people, and with each other’s help, they’re able to fairly accurately glean words out of the seemingly unreadable.

“There are a bunch of things that human beings can do that we don’t know how to model with computers,” Miller says. “One of those is bottom-up and top-down perception. With the handwriting example, you look at individual stroke or mark and say that looks like an ‘e’ or ‘a’ or ‘i.’ That’s bottom-up perception. But then top- down is the context around it. Is it by itself with white space around it? Well then it’s not an e. That’s actually where multiple people tend to help each other.”

While Stocktoberfest was focused on big data and computational finance this year, it is still fundamentally about meeting and interacting with like-minded people in a casual social setting. There is still no substitute for that.

Howard Lindzon described several times how he has reduced his workload by drafting behind other traders in the Stocktwits stream. With that in mind, there is no greater advantage you can have in trading or any other venture as interaction with ambitious smart people. Sometimes the messy handwriting of the market can only be interpreted through collaboration and interaction (and hard work).

Read:  Where Humans Will Always Beat the Robots (The Atlantic)

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