In this insightful interview with Frank Fabozzi, Rob Arnott explores three major forces shaping the future of asset management: data mining, index investing, and artificial intelligence. He warns of the pervasive misuse of backtesting in quantitative finance and the unintended market distortions caused by the rising dominance of index funds. Arnott also discusses the transformative potential of AI, noting both its opportunities for productivity and its limitations, especially for long-term investors. Ultimately, he emphasizes the importance of scientific rigor, innovation, and human judgment in navigating these evolving dynamics.
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