Man vs. machine

Beyond that, things don't look so good, but the computer continues its four-and-a-half-year love affair with international investing, according to Mr. Mehrotra, who dutifully follows the lead of the Asset Allocation Neural Network, AANN. "I used to second-guess her, but I was wrong nine out of 10 times," he said. The use of artificial intelligence, also known as neural networks or genetic algorithms, has been described by some as the second generation of quantitative investing because it has the flexibility to get smarter through the expansion of input data. The technology, which has been in place for more than a decade at Legend Advisory and is quietly spreading throughout the money management industry, also has wide applications for use in science and medical technology. It was an artificial-intelligence program that enabled IBM's Deep Blue computer to defeat chess champion Gary Kasparov in 1997.