The importance of transferable skills: Tech
For a long time, I have been following the technical advances in the world with interest. I have always been fond of computers and machines, but I have not fundamentally understood how they work. Why are they suddenly a bigger deal, in 2017? Surely they have been around for a long time?
People are talking about the fourth industrial revolution. Automation has been a thing for a long time, but computers have not been powerful enough, and it did not involve methods to teach computers to do tasks. That is what is different today. It is called machine learning, or Artificial Intelligence (AI). We used to automate jobs that only required hands, but now we can automate brains too.
I am sure you have read all of this before, and therefore I will get to my point. I believe that what happened to car manufacturer industry is now happening to the finance services industry. Previously it was required to have a large workforce for a production line. Now car makers are mostly people who are assisting the robots when needed. The finance services industry will go down the same path and is about to get a lot smarter.
Robo-advisors have been starting to pop up around the world. The UK has Nutmeg, The US has Motif, and in Sweden we have Sigmastocks. Most of these services are at the moment, not “smart”. Next step for these companies is to implement AI for their investing robots which will rely on statistics and data to make trading decisions. The fascinating thing about investing is that if the “best” strategy for investing is discovered by many, it will no longer work efficiently and thus a new strategy has to be made.
A hedge for the future
Step one: Learn programming
I think the best way to respond to such rapid change is to jump on the train and learn the required cross-over skill. In this day and age, it is tech. I decided to start learning the coding language Python. It is one of the popular general-purpose languages, which means it can be used to build just about anything. I chose it because it is the go-to language for automation and scripting.
Step two: “Algotrading” and Robot investing
In the world of finance, algorithmic trading is increasing in popularity. This is where I will start to learn how to build a robot on my own which can invest for me. I will start using the platform MetaTrader 4 and later go over to an exclusive Python program which will be smarter and faster.
More in-depth details and experiences regarding this stage will come in a later blog post.
Step three: Find investing strategies that work
This will be the hardest part, and it might take years before I can profit from it. Finding real world arbitrages is nothing you do effortlessly. I am most interested in using fundamental investing and non-HFT strategies which I think work and build my own investing robot on it.