Is the AI Really Good at Nonlinearity?

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Daniel Treisman: I want to follow up because of the term you used that there were several bad actors, which everybody now knows about. But the thing that interests me in that is that isn't one of the premises of machine learning, that the AI is particularly good at nonlinearity and intuition. What humans aren't good at, especially when it comes to markets is the emotional side of losing money.Treisman: We're sitting, in my view, a powder keg in the markets right now in terms of leverage and all the liquidity that's being pulled back. And those markets destabilize, there are patterns in terms of how they behave. That kind of behavior gets picked up

Julia is the co-founder of Rosetta Analytics Inc, “an alternative asset manager that is pioneering the use of advanced artificial intelligence to build and actively manage liquid investment strategies.” Prior to co-founding Rosetta, Julia served as President of Wilshire Consulting and was a member of Wilshire’s Board of Directors and Consulting Investment Committee. Julia joins the show to take a deep dive into deep reinforcement learning and Rosetta’s pioneering work using AI as the basis of its investment strategies. Important Links:

Show Notes:

Julia’s journey from Wilshire to Rosetta
Defining deep reinforcement learning
AI and non-linear thinking
Using adaptive models
Overcoming the human need for ‘why’
Pitching deep reinforcement learning models to new investors
Telling positive stories about AI; improving our discourse
“Wake up and look for the joy”; “overcoming fear is the biggest barrier to success”

Books Mentioned:

What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time; by Jim O’Shaughnessy
The Beginning of Infinity: Explanations That Transform the World; by David Deutsch
The Fourth Turning: An American Prophecy - What the Cycles of History Tell Us About America's Next Rendezvous with Destiny; by William Strauss and Neil Howe