Jim’s Mailbox

Posted at 9:09 AM (CST) by & filed under Jim's Mailbox.

Jim,

You have said machines have taken over markets.

Dave

CIA-Backed Startup Builds ‘Bots For The Next Generation Of ETFs
March 26, 2019

The Central Intelligence Agency was one of the early backers of an AI startup company called Kensho Technologies, once focused on analyzing North Korean missile launches, earthquakes and elections – at least, until 2014. That’s when John van Moyland joined the company and its focus pivoted to finance, according to a new Bloomberg article.

S&P Global wound up buying the company last year and is now using it for yet another cause: developing the next generation of index funds. According to van Moyland, who’s title is now “managing director and global head of S&P Kensho Indices”, machines can design better indexes used as underlying products for passive investment vehicles like ETFs, which among other passive investment instruments, manage about $7.3 trillion in the U.S.

van Moyland told Bloomberg:

“We’re doing what a lot of research shops have done with humans in the past — and doing it at scale, in a highly predictable, highly automated, efficient way. Why would you ever limit yourself to aged financial data when there’s a sea of information out there?”

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