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The Reformed Broker

The 'Moneyball' effect hits the markets

Our collective ability to process raw data from disparate sources has vastly improved, which will increase productivity and create more effective investments.

By Joshua M. BrownGuest blogger / January 6, 2012

A trader works on the floor of the New York Stock Exchange January 4, 2012. Brown argues that the increased speed and effectiveness with which we process raw data will have a positive effect on investing.

Brendan McDermid/Reuters

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Run, don't walk, to check out Dennis K. Berman's latest column at the Journal about about how Big Data will be impacting companies large and small in 2012.

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Joshua has been managing money for high net worth clients, charitable foundations, corporations and retirement plans for more than a decade.

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Our collective ability to process raw data from disparate sources has gotten faster and meaner in a hurry, and this has major implications for almost any vertical you could dream of...

 Computer systems are now becoming powerful enough, and subtle enough, to help us reduce human biases from our decision-making. And this is a key: They can do it in real-time. Inevitably, that "objective observer" will be a kind of organic, evolving database.

These systems can now chew through billions of bits of data, analyze them via self-learning algorithms, and package the insights for immediate use. Neither we nor the computers are perfect, but in tandem, we might neutralize our biased, intuitive failings when we price a car, prescribe a medicine, or deploy a sales force. This is playing "Moneyball" at life.

I used to trade the stocks that are involved in the trend (Tibco - $TIBX - has been a favorite story of mine for years).  They've been winners by and large but are subject to the same market pressures as everything else - which could represent opportunity.

Check out Berman's piece now and get excited - this trend could be another powerful wave that boosts productivity, affords us investing opportunities and makes the world a better place.  Nice to see quants working somewhere outside of finance

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