A Bloomberg article today reported that human-run hedge funds trounced quants in 2020 - a turnaround from the experience of recent years. Renaissance Technologies - run by Jim Simons - saw its Institutional Diversified Alpha & Global Equities funds fall by 32% and 31%

The fundamental problem with computer/AI driven trading strats is - and always has been - that the models will never be capable of evaluating novel situations which have not happened before. This was undoing of LTCM, as well as port. insurance which caused 1987 stockmarket crash.

A global pandemic was not in the past datasets, so the bots don't know what to do. AI is only good where you have sizeable and complete datasets that can 'train' the AI to recognized statistical patterns too complex for humans to extract, and use it to make accurate predictions.

This works phenomenally well in situations that regularly recur within the bounds of a confined range of possible outcomes, but it is prone to disastrous error where discontinuities can occur where outcomes can suddenly bear no resemblance to outcomes in past datasets.

How do you teach an AI to determine if there is a cat in photo? You 'train' it by showing it millions of photos labelled by humans that tell the AI whether there was in fact a cat in it or not. The AI pick ups statistical regularities & uses to make inferences on new photos.