One of the challenges in writing Flickers of Fortune was to convince my readers that investing in the stock market could be dangerous, exciting and sexy. My thesis, if you will, was that much of the machinations behind the worlds wealth goes on behind the curtain of the world’s largest casino — known as the various stock exchanges. And if you don’t think handling money, lots and lots of money, is dangerous, exciting and sexy — well you’re probably not paying much attention to why things go the way they do.
The dangerous part comes from all the ways this can go wrong. I mean, we are talking about a lot of the world’s wealth being schlepped around in ways most of us don’t understand, creating results that sometimes don’t make sense even when we do know what is happening.
So … I was fascinated to read this blurb about an article that recently appeared in the magazine The Economist.
This week our cover looks at how machines are taking control of financial markets—not just the humdrum buying and selling of securities, but also the commanding heights of monitoring the economy and allocating capital. Funds run by computers that follow rules set by humans account for 35% of America’s stock market, 60% of institutional equity assets and 60% of trading activity. New artificial-intelligence programs are also writing their own investing rules, in ways their human masters only partly understand.Industries from pizza-delivery to Hollywood are being changed by technology, but finance is unique because it can exert voting power over firms, redistribute wealth and cause mayhem in the economy.
The blue bold lettering is mine.
Interesting, huh? Maybe even a little exciting in a weird this-car-could-really-crash kind of way?