Can Machine Learning Algorithms Make Better Investment Decisions Than Business Angels?

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Human versus machine: who will win in the investment arena? Well, researchers found that a machine-learning algorithm is more likely to come out on top when pitted against a neophyte investor. On average, an angel investor—an independent investor investing in multiple start-ups—has an internal rate of return (IRR) of 2.56%. The machine-learning algorithm scored an average IRR of 7.26%! But with experience, these “angels” are more likely to beat an algorithm; experienced investors with a healthy balance of risk and caution significantly outperform the algorithm. Read full article here

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