Alphablock

Category: Research

  • AI’s Jumping Cat Problem

    AI’s Jumping Cat Problem

    AI is excited about jumping cats, How come AI can not solve the US 100 trillion investment management which can not beat the benchmark? The answers I got. The cat is important not the benchmark. AI needs to take small steps. Solving Cancer more important than beating the benchmark. Driverless cars more important focus. We…

  • Human AI

    Human AI

    Finance is a key milestone for AI. Imagine coming back from vacation and talking to your virtual assistant about your investment portfolio and wondering how she does it, quarter after quarter, year after year.

  • The Black Swan

    The Black Swan

    Finance does not understand the physics of preferential attachment. According to Taleb, the intuitively appealing preferential attachment is incomplete. This is a tragedy for his ‘Black Swan’ because preferential attachment is the other name for ‘Rich Get Richer’. Taleb bases his philosophy of randomness on the non-normal power law behavior which is also another way…

  • The Beta Maths

    The Beta Maths

    The two Nobel Prizes awarded in Economics in 1990 [1] and 2013 [2] define the boundaries of Modern Portfolio Theory (MPT). Size is the pillar for both the models.

  • Jack, Your Revolution is Over.

    Jack, Your Revolution is Over.

    Standing against the establishment, having a voice and speaking up needs courage. This is what you did. You spoke up against the industry which started the first Mutual Fund in 1775. Bloomberg calls it a revolution, you call it a revolution, Wall Street Journal is calling it differently, but that does not matter. Mutual Funds…

  • The Size Proxy

    The Size Proxy

    Though ‘Size’ is the most important factor explaining stock market returns, the possibility of size being a proxy was first mentioned in Banz (1978). Even after forty years of factor investing the industry is still looking for answers. This paper chronologically lists the research on ‘Size’ and why the question regarding ‘The Size Proxy’ has…

  • How Blockchain Could Disrupt Wall Street!

    How Blockchain Could Disrupt Wall Street!

    Before we talk about Blockchain disruption, let us talk about the implosion happening on Wall Street. The Realization that stock picking is dead [1] after decades of Active underperformance [2] has made beating the market an adventure sport, where only a few succeed.

  • How Physics Solved Your Wealth Problem!

    How Physics Solved Your Wealth Problem!

    While Robert Solow suggested not to think of Economics as Science [1], Andrew Lo warned us about the dangers of using Physics to build economic systems [2]. Physics has been a late entrant to the world of Finance.

  • Fruit Basket Paradox

    Fruit Basket Paradox

    Investment management which is worth USD 70 trillion can be seen like a fruit basket. The job of the fund manager was to select the fruits from the market and sell it to the investor.

  • Architecture of Data

    Architecture of Data

    The rich do not always get richer. Explaining this probabilistically resolves a 100-year-old puzzle, opening up opportunities for smart beta portfolios, an architecture of complexity and eventually an architecture of data that could become Web 4.0.