Category: investing

Machine Learning In Investing

By Tim NortonPosted on Cat investing, Macro Economic, Portfolio Modeling, Price prediction, Risk Avoidance, TechnologyLeave a comment
Machine learning can be used in investing in a variety of ways. This article seeks to show a few of those and describe the basics. Hedge funds have tried for years to use machine learning (or AI) in their funds. Moving on to today, all quantitative funds use some form of machine learning. Some hedge… Read More »

Limiting Drawdowns Rather Than Maximizing Returns

By Tim NortonPosted on Cat investing, Risk Avoidance, TechnologyLeave a comment
Prominent asset manager Mary Meeker once said her primary goal is limiting drawdowns! While most portfolio construction is explicitly or implicitly focused on returns, she knew that minimizing events that can decimate the portfolio is more important for long term gains than trying to maximize growth periods. Famously, a portfolio needs to double to make… Read More »

Machine Learning in Finance and Investing

By Tim NortonPosted on Cat investing, Portfolio Modeling, Risk Avoidance, Technology2 Comments
The first time I heard the term ‘Artificial Intelligence’ was in the 1980s, when my dad worked for Digital Equipment Corporation, in the Silicon Valley of the East (Massachusetts). And yes they made computer chips from Silicon. In the 80’s Artificial Intelligence referred to, basically, complex logical structures, with each decision leading to a tree… Read More »

A Better Portfolio Optimization Method

By Tim NortonPosted on Cat investing, Portfolio Modeling, Risk Avoidance, Technology7 Comments
You may have heard of Markowitz’s Critical Line Algorithm, or CLA. CLA was Markowitz’s attempt to solve the problem of portfolio optimization using quadratic math. For a couple reasons is was an ingenious invention. But it also has its problems. The problem with CLA is that it demonstrates large changes in the portfolio with small… Read More »