By Jeffrey Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.
This weekend, we were asked the question "what is quantum about investment advisory?" or put another way, why do we only see mentions of quantum computing in relation to information security?
The answer is that quantum mechanics (physics at a really small scale) is truly random. All the 'stuff' that happens in our computers, or in the old testament (we checked), or in physics in objects that are relatively large (so you can see them without an electron microscope or a carefully crafted experiment), like a grain of sand, are classical and not random.
For example, ask your computer for a random number and it will come up with an odd calculation that is hard to guess, and a gem or starting point like the time in the system clock. With enough smarts and computing power, you can figure out the gem, and crack the code...so the action is not random.
Quantum is random. Security requires true randomness because today's security requires a hard calculation that can be reverse engineered. Randomness is more secure, and more interesting for picking stocks.
In this week's "Investment Information" tab you will find data that is split between stocks of companies that lose money, and stocks that make money (and generate cash in their operations). Things like skewness, or price declines, or daily price change variance do depend on the profitability of the companies (as a true/false flag). Most everything in the markets is not random, and can be figured out, and role-played or game theory-ed against, or even programmed against with a bot or trading algorithm.
I believe our model has been deciphered and there is someone in a dark room figuring out how to bet against the CQNS UP and Down runs. That is ok, because when we run it on a quantum computer, it has a little more randomness, a little less precision, and can pick slightly different stocks. For those that want a core, quantitative edge, we use our classical runs. We can run our server for 6 or 8 hours overnight, and sometimes do, to find the best answer (or the best we can find, in a computational equilibrium). When we run it on quantum, the answers are a little weaker, a little different, and anecdotally, behave differently. Being random in your computational power could be edge you need to beat the algorithms and large trading desks.
And now for the week's picks:
We noticed a frew things this week.
In our opinion, holding equities this week is more risky than last week. Buyer beware.
Good luck in the markets this week. GLTA!