Excess Returns Applying Machine Learning to Value Investing with Euclidean’s John Alberg
9 snips
Apr 10, 2022 AI Snips
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Machine Learning Basics
- Machine learning, especially supervised learning, focuses on mapping inputs to outputs by minimizing errors.
- This process involves presenting the algorithm with numerous examples and iteratively tweaking the model to reduce discrepancies.
Value Bias in Machine Learning
- Applying machine learning to stock picking with fundamental data as input naturally leads to a value bias.
- This aligns with existing research showing the long-term efficacy of value factors in investing.
Data Sufficiency Debate
- Research Affiliates argued that 55 years of equity data isn't enough for machine learning.
- John Alberg countered, stating the millions of data points from individual stocks provide ample data.