Robin Hood is alive and well. He has left the dark forest of Sherwood for the spotlights of social media and financial markets.
This short article introduces the actors of the play and shares the most recent acts/scenes.
Is the main theme of the play still relevant today?
Fridges are the new rocket science… IBM’s target of a million-qubit requires the biggest and coolest fridge ever.
The article is also a good overview of where quantum computers are, and where they will be. Quantum computers will be exponentially better at some tasks, but not at all tasks. Excel will still run on your desktop; high-dimensional problems (investments! back-tests! optimizations!) would fit well in quantum computers. The next generation of software will separate tasks and send them to either/or, thanks to cloud-based quantum capacity.
Quant hedge funds have had a bad year. One of their core factor, value, a staple of investment for many years, has strongly underperformed.
Quants rely on backtests to see what has performed / is performing well. In a changing universe, models naturally have short lifetimes as a result. In this covid world, the past really doesn’t reflect the future anymore, and many models do not work at all. Some quants have self-doubt on the validity of their approach (see the previous post on Inigo Fraser Jenkins).
It’s probably way too early to call for the demise of quant investing, but COVID surely brings a regime shift.
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