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A version of Artificial Intelligence that works. I’m not a big fan of AI (see my review of Evidence Based Technical Analysis to see some of my reasons).But if I were trying to sell AI on Wall Street, I would definitely buy a toy called 20Q by the gross and give them to anyone who even vaguely resembled a customer.Remember Twenty Questions from grade school?You think of an object and 20Q gets to ask you twenty yes or no questions.You push a button that says ‘Yes’ or a button that says ‘No’ or one of a small number of other answers and the toy asks you another question or guesses what you have in mind.If the toy figures out what you are thinking of before the game ends, it wins. According to Kevin Kelly (Kevin Kelly is a former editor of Wired) if you stick to objects, this toy will stump smart adults about 80% of the time with 20 questions and most of the time with an additional 5 questions.I haven’t seen any statistics concerning how often people win, but I expect it is less than 80% of the time.
The toy is basically a database and a piece of software that is slightly brighter than a thermometer.The toy is stupid, but knowledgeable.It will beat you, probably, because it knows a lot more about Twenty Questions than most people do. Twenty Questions has remarkably little in common with investing, unfortunately.Compared with knowledge of the physical world, investment knowledge is remarkably hard to acquire.Ask ten people who are thinking about hot dogs if what they are thinking about is edible and almost all of them will say it is (Jews and Moslems might say otherwise.)Ask whether the S&P 500 is likely to be higher on Tuesday than it was on Monday and you get… a problem. I glossed over some of the details in my description above.20Q’s first question requires you to choose between animal, vegetable and mineral.The next nineteen questions can be answered ‘Yes’, ‘No’, ‘Unknown’, ‘Irrelevant’, ‘Sometimes’, ‘Probably’ or ‘Doubtful’.But since these were, more or less, our rules in grade school I don’t consider them cheats. The toy version of 20Q doesn’t learn.Its database was created by editing a database created by a program that does learn, a program that seems to be about as smart as cricket.You can play with that program free by going to WWW.20q.net.According to the website, the program has already played more than fifty five million games.According to Kevin Kelly, it is now playing more than two million games a month, which is why it knows more about Twenty Questions than you or I do.
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