Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
"Vanguard economist Joe Davis kicked off the conference with his view of the future of work. In the next five to 10 years, studies suggest, 50% of jobs in the U.S. are projected to be lost to automation. India could lose 69% of its jobs, and more than 75% of China’s jobs could be wiped out. But Davis is optimistic: “We need to change our mind-set about technological change. Jobs do not get automated away, tasks do.”
Based on Vanguard’s analysis, tasks have changed for every occupation since 2000. Chefs, astronomers, and photographers saw the most change. (Economists the least, Davis joked.) He sees this as a positive, because automation means that workers can farm out repetitive tasks and devote more time to uniquely human ones, such as information analysis, communication, relationship management, and creative thinking.
Active shops have responded to this technological threat by putting those “uniquely human” tasks into an automated form—strategic-beta ETFs "
He sees this as positive because workers can farm out repetitive tasks. That's assuming the worker owns the technology and has a choice which tasks are farmed out. It is the business and technology's owners that make that decision and they will choose to fire many workers and replace them with tech. In the money management industry that means only those workers with skills that are uniquely human, that are so specialized that a computer algorithm which picks stocks can't replace them will survive. The terrible irony is many financial analysts and money managers who boast of "capitalist creative destruction" are about to see their jobs creatively destroyed by the technology they once invested in and celebrated. The question for every worker becomes what can you do a computer program, algorithm or robot can't?
I don't fear Artificial Intelligence whatsoever, especially in the active mutual fund management business. Over a very, very long timeframe, AI might become a problem if its influence becomes overwhelming and without human interaction and control, but I will be long gone before that becomes even a remote possibility.
Change is inevitable, and that change will cause disruptions. Jobs will be lost, and jobs will be discovered. That's the lesson history has continually taught us. Making winning choices for the unknown and unknowable future is always iffy duty. Some you win and some you lose. That's why insurance and flexibility work to limit the downside. Good decision making includes planning for the unexpected.
Rules can be helpful here, especially in the mutual fund investment arena. I had to fight myself to use the word "arena" rather than "discipline". Rules are important like keep costs down and trade infrequently, but being a total slave to these rules can generate a disaster. That's when flexibility enters the equation. A good general knows or feels when to abandon a plan. A good investor needs those same instincts. Those instincts are enhanced by experience, by communications with other seasoned investors, and by time-in-the-field.
Easy for me to say, but difficult to implement. Just review the failed relative to benchmark records of over 80% of active fund managers when examined over a 10 year period. That extended timeframe is needed to properly measure the difference between skill and luck. The skill set of many fund managers is in serious doubt. But there are some winners.
Comments
https://washingtonpost.com/news/the-switch/wp/2015/01/28/bill-gates-on-dangers-of-artificial-intelligence-dont-understand-why-some-people-are-not-concerned/?utm_term=.3e9a5fb47231
I don't fear Artificial Intelligence whatsoever, especially in the active mutual fund management business. Over a very, very long timeframe, AI might become a problem if its influence becomes overwhelming and without human interaction and control, but I will be long gone before that becomes even a remote possibility.
Change is inevitable, and that change will cause disruptions. Jobs will be lost, and jobs will be discovered. That's the lesson history has continually taught us. Making winning choices for the unknown and unknowable future is always iffy duty. Some you win and some you lose. That's why insurance and flexibility work to limit the downside. Good decision making includes planning for the unexpected.
Rules can be helpful here, especially in the mutual fund investment arena. I had to fight myself to use the word "arena" rather than "discipline". Rules are important like keep costs down and trade infrequently, but being a total slave to these rules can generate a disaster. That's when flexibility enters the equation. A good general knows or feels when to abandon a plan. A good investor needs those same instincts. Those instincts are enhanced by experience, by communications with other seasoned investors, and by time-in-the-field.
Easy for me to say, but difficult to implement. Just review the failed relative to benchmark records of over 80% of active fund managers when examined over a 10 year period. That extended timeframe is needed to properly measure the difference between skill and luck. The skill set of many fund managers is in serious doubt. But there are some winners.
Best Wishes