Technology on Wall Street

Kelly, Kevin. “Cracking Wall Street.” Wired. Feb. 2007 Web. Feb. 2007.

Read this article

In this article Kevin Kelly tells the story of a computer guru who was starting a company that would use computers to predict the stock market. The guru, Doyne Farmer, put microcomputers in the bottoms of his shoes and walked around in a casino. The goal was to predict the toss of a roulette ball. Farmer had tuned his algorithm to the turns of a particular wheel in the casino. While the ball was running, the machine in Farmer’s shoe made small taps on his toe. Farmer sent this information to his partner who also had a microcomputer in his shoe and they were able to place their bet before the ball stopped. The system did not predict the exact winning number, but it predicted a small group of numbers. The gambling partner spread his over this group of numbers and out of the group, one won. They hope to use this same system and technology to predict the stock market. This experiment is another example of the use of technology in on-the-fly wagering whether it is the roulette wheel, horse racing, sports, or the stock market. Kelly’s viewpoint is that this technology will be used for betting in all these areas.

This source will help to answer the research question by showing that technology is the future of any kind of wagering. Farmer says that he can make money with just a small bit of information. He says there are patterns in any kind of random data. That is how his company uses computers to build models. They start with the data and work up. Farmer says that if they are broadly successful, it will show that machines can forecast better than people and that algorithms are good economists. Doyne Farmer has the reputation of being “one of the financial world’s hottest rocket scientists.” If he thinks machines can be programmed to predict the stock market or the winner of a ball game, then it gives credibility to the idea that machines can be used in gambling casinos.