Tag Archives: Skynet

Skynet becomes a possibility? … Eight Years until Computer Power Equals Human Thinking?

Recall in the Terminator series when the computer system called Skynet, became “Self Aware” ?

SkynetThe computer in the movie became so fast, powerful, and interconnected, it became its own species or race. In the movie, the computer then commenced to Terminate the human race!

Eight Years Until Computers are Equal to Human Thinking

Here and here we spoke of the incredible goals of Peter Diamandis and his Longevity Institute (extending 30 years to average ages.)

In another associated venture called Singularity Institute, Mr. Diamandis tossed up the following slide, showing that in 8 years computers will be as fast as humans, and by 2050 as fast as the entire Human Race!

Computer Power Expanding

Clearing these hurdles is well within most of our lives, I am all for this continuation of technology and embrace the improvements.

For just a moment, I did think … What if ?

Wonder if anyone else in the room thought the same thing?

Have a Great Day!

John A. Kvale CFA, CFP

PS Finally traveling home today !!

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225

 

Algo’s aka SKYNET, A Bigger Problem than High Frequency Trading

Earlier we mentioned Michael Lewis along with his new book Flash Boys has brought much attention to the world of High Frequency Trading.  There is a bigger problem in our eyes that should garner more. As a side note, Jack Bogle, Founder of Vanguard in this Bloomberg TV segment totally supports HFT and trashes Lewis and his book promoting.

Algorithmic Trading is the Elephant in the Room

Algorithmic trading is a computer driven program that is used to automate some type of trading system, also called Algo’s.  We have nick named them SKYNET, from the Terminator series.  The Algo’s we have a problem with are the ones that create extreme volatility in markets without cause.  There are Algo’s in control of so much money that when the program moves a direction it is best to step aside.

Automated trading with big money behind it creates higher volatility and may someday lead to a dramatic market event.

Take a look at this chart from 4-15-14. This is the S&P 500, 1 minute chart for the day.

S&P 500 1 minute chart 4-15-14

There was very little news on this day. This swing is most certainly the  Algo’s at work.

While no major damage has been done YET, we fear this may not always be the case.

Our answer to Alog’s …. Well just another reason terrific diversification in today’s investing world is a must.

Have a Great Day!

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225