In “freestyle chess,” good man-machine teams now best computers playing on their own. Remarkably, they also beat other man-machine teams with much stronger human players who use computers less deftly. Michael Mauboussin, Credit Suisse's managing director and chairman of SFI’s Board of Ttustees, believes the cyborg-style chess holds important strategic lessons for investors.

Mauboussin and co-author Dan Callahan are quoted in a article from their recent paper on the lessons of freestyle chess: “We believe that some of the lessons of freestyle chess are useful. Properly done, a melding of fundamental and quantitative methods may well yield better results than either of them on their own.”

The authors argue that combining fundamental and quantitative investment strategies is analogous to playing chess with human judgment and machine skill. For investors, as for chess players, the key will be finding the best process for incorporating machine (quantitative) input. 

Read the article on (September 18, 2014)

Read the Credit Suisse paper by Michael Maubossin and Dan Callahan (September 10, 2014)