Читать книгу Artificial Intelligence for Asset Management and Investment - Al Naqvi - Страница 21

The design of a modern investment management firm is based on the following insights:

 Structural coherence: No single capability is viewed as the sole determinant of success. A firm is viewed as a collection of capabilities that all transcend through various levels of intelligence.

 Interdependence: These capabilities interact with each other and through that interaction create interdependence where the entire system operates as a complex system.

 External interaction: Information flows into these capability areas from external systems, and the firm processes both internal and external information.

 Performance maximizing: The performance of each capability area is maximized, while ensuring that its interactions with other capability areas do not negatively affect the company goals.

 Cohesive value building: Each capability area is designed for performance, and the design focuses on two aspects: (1) automation and (2) intelligence. Automation, as the word implies, is work being performed by machines. Intelligence (I also use the term “intellectualization” interchangeably in this book) refers to the increase in human or machine knowledge to solve goal-oriented problems. Automation does not have to be intelligent. Intelligence does. The performance of automation is measured by the ability of a machine to perform work efficiently. Efficiency refers to comparative performance of artifacts with humans and other machines. Intelligence, in contrast, is measured by the ability of a machine to successfully navigate through the uncertainty in accordance with the goals of the system.

 Narrative empirical relationship: Humans think in terms of narratives. We like to explain things in terms of cause and effect, relationships, correlations. Our search for truth sometimes lands us in areas that are dark and story-less. For example, with machine learning, we can observe that a certain trading strategy works, but we cannot explain why. Cohesive value building allows us to develop multilayered narratives supported by empirical research. Multilayered means that the narrative-empirical connection exists and functions at different levels in the firm. At the investment strategy level, we can explore dynamic narratives that emerge with empirical research. At the sales and marketing level we can articulate our investment philosophy, approach in terms of narratives, and support it with empirical research. At the firm level we can narrate our firm's strategy and support it with research. Machines do not deprive us of developing and understanding narratives. They simply give us answers with some homework assignments. Those of us who respect machines know that we must do our homework.

The fourth stage firm achieves interconnected excellence from the interaction of the network of various functional areas. However, both collectively (whole) and individually (parts), the system is managed using the scientific method.