Digital Wealth

Chapter 6 Dynamic Asset Selection: Determining the Lowest-Cost Option for Each Portfolio

“I do not fear computers. I fear the lack of them.”

—Isaac Asimov

Garry Kasparov was a chess prodigy. He grew up in what is now Azerbaijan on the Caspian Sea, and won the Soviet junior chess championships at age 13. At the age of just 22, Garry Kasparov became the youngest chess world champion. He held that title for all but three months of almost two decades. With a tremendous capacity for study and an aggressive opening style, he is regarded as one of the greatest chess players of all time.

However, even as great a player as Kasparov made mistakes and lost games, with key matches sometimes hinging on a single game or draw. From a historical perspective, what is more significant about Kasparov’s time as champion is the rise of a computer’s ability to play chess at the highest level and win.

At the start of his tenure as world chess champion, computers were little match for Kasparov. He could play 32 chess computers simultaneously, as he did in Hamburg in 1985, and beat all of them. Computers couldn’t pose a challenge to him when he started. But things changed. A decade later, a chess computer, Deep Thought, was estimated to have attained grand master status in its playing ability. However, Kasparov beat grand masters all the time, and Deep Thought was no exception.

In 1996, the watershed happened and Kasparov lost a game, to IBM’s computer Deep Blue, but still won the match 4–2. Just ...