Mastering the game

Website Disclaimer October 2024

Important Legal Information & Terms of Use

By using the Cape Capital website (“Website”), you declare that:

You are a qualified investor according to Art. 10 para.3 of the Swiss Collective Investment Scheme Act (CISA) and/or a professional or institutional investor according to Art. 4 of the Financial Services Act (FinSA).
You are domiciled in Switzerland
You have understood and agree to the following Important Legal Information and Terms of Use (together “Conditions”)

By clicking “Accept all” you acknowledge and accept the following Important Legal Information and Terms of Use:

‍

About this Website

‍

The content of this Website (including microsites) has been prepared by Cape Capital AG, with its registered address at Utoquai 55, 8008 Zurich, Switzerland (“Cape Capital”), duly registered at the commercial register of the Canton of Zurich with number CHE-109.617.147. and contains the views and opinions of the particular individuals and is for general information and marketing purposes only. All copyrights and other rights, included but not limited to logos and registered trademarks relating to the entire content of the Website are reserved exclusively to Cape Capital or the specifically designated right holders. Any use, in particular the reproduction or publication in full or in part is permitted only with the prior written consent of Cape Capital. Cape Capital may from time to time suspend the operation of this Website for repair, maintenance or improvement work, or in order to update or upgrade its content or functionality. Cape Capital may also change the format, content and/or access of this Website at any time at its sole discretion without notice. Although Cape Capital believes that information provided on this Website is based on reliable sources, content on this Website is presented only as of the date published or indicated, and may be superseded by subsequent market events or for other reasons. Therefore Cape Capital cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained herein. Unless otherwise stated, the numbers/figures on the Website are unaudited.

‍

Regulatory Status & Ombudsman

‍

Cape Capital is a regulated asset manager of collective assets according to the Federal Act on Financial Institutions of 15 June 2018 (FinIA) and supervised by the Swiss Financial Market Supervisory Authority FINMA, Laupenstrasse 27, CH-3003 Bern, Switzerland (FINMA). The Website contains information about various collective investments (“Funds”) which may have been registered or otherwise notified for distribution and marketing in the jurisdiction you have selected. Please note, that such registration or notification does not mean that the Funds are suitable for all investors and their investment objectives, financial situation and risk profile. As an asset manager of collective assets, Cape Capital is, among others, subject to the rules under the Swiss Financial Services Act (FinSA), the Swiss Collective Investment Schemes Act (CISA) and the Swiss Financial Institutions Act (FinIA).Cape Capital is affiliated to the following Ombudsman according to FinSA: Finanzombudsstelle Schweiz (FINOS), Talstrasse 20, CH-8001 Zurich, Switzerland. For further information, please refer to the General Client Information Document available on the Website which forms an integral part of these Conditions.

‍

No Solicitation, Offer, Recommendation or Advice

‍

Nothing contained on this Website constitutes a solicitation, an offer or a recommendation to buy or sell any Cape Capital Funds or other financial instruments, nor does it constitute any form of personal investment advice which takes into account your personal circumstances. Cape Capital does not provide investment, legal, tax or other advice through this Website and nothing herein should be construed as such advice. Cape Capital does not represent that any Cape Capital collective assets or financial instruments mentioned on this Cape Capital website are suitable for any investor. Investment or other decisions should be made solely on the basis of the relevant product and/or service documents (prospectus/offering memorandum, fund contract/articles, key information documents, financial reports) of the respective collective investment. If not a Cape Capital client, it is strongly recommended to contact a professional financial advisor, tax consultant or other qualified expert in order to determine whether an investment in a Fund or other financial instrument corresponds to the specific requirements and preferred level of risk of the investor.

‍

US Persons

‍

Any collective investment schemes mentioned on this Website may, unless explicitly stated otherwise, not be offered, sold or delivered to United States (U.S.) citizens or persons resident or incorporated in the U.S. and/or other natural or legal persons whose income and/or returns, regardless of origin, are subject to U.S. income tax, as well as persons who are considered to be U.S. persons pursuant to Regulation S of the U.S. Securities Act of 1933 and/or the U.S. Commodity Exchange Act, in each case as amended from time to time.

‍

Risk Considerations

‍

The provision of financial services and investments in Funds and other financial instruments involve opportunities but also bear risks, including the risk that the value of investments and the income therefrom may fall or rise and investors may not get back the full amount invested or may even lose all of their investment. Investors should ensure to have fully understood such risks before taking any investment decisions. Cape Capital strongly advises to consult the brochure “Risks Involved in Trading Financial Instruments” of the Swiss Bankers Association (SBA) as well as the relevant documents of the respective Fund or financial instrument and to seek professional investment advice before taking any decision to invest. Investors should note, that these Conditions do not represent a complete statement of risks associated to a Fund or a financial instrument. Past performance is no indication of current or future performance. Performance data do not include commissions and costs incurred by investors when subscribing or redeeming Fund shares.Investments, in particular collective investments in private equity, venture capital and other illiquid assets involve an above-average degree of risk, including the risk that losses may even exceed the original investment and should be seen as long-term in nature.

‍

No Warranties

‍

The use of this Website, including any information accessed, downloaded or otherwise obtained through the Website is at your own risk. This Website, together with all content, information and materials contained therein, is provided “as is” and “as available”, without any representations or warranties of any kind, whether express or implied, with respect to the Website, and all information and functionalities contained therein.

‍

Limitations of Liability

‍

IN NO EVENT SHALL CAPE CAPITAL BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF DATA, BUSINESS OR PROFITS) ARISING OUT OF OR IN CONNECTION WITH THESE CONDITIONS, THIS WEBSITE, THE INABILITY TO USE THIS WEBSITE OR ANY INFORMATION OBTAINED OR STORED THERFROM. Cape Capital excludes any liability for any loss, damage or alteration of any kind including but not limited to transmission to losses, delays, misunderstandings, unauthorized interception by third parties, duplication or fraud, except in the event of gross negligence on the part of Cape Capital. Any transmission or download of information is entirely at your own risk.

‍

Use of Links

‍

The hyperlinks on the Website are only provided for information and convenience purposes. Cape Capital is not responsible for the content of external websites that link or are accessible from this Website. Cape Capital does not assume any responsibility or liability with respect to any website accessed via this Website. Please note that when you click on any external website’s hypertext link you will leave this Website. You should review the privacy statements of such websites carefully before you provide any personal or confidential information.

‍

Electronic Communication Channels

‍

The use of electronic communication channels, in particular unencrypted e-mails and text messages, is associated with various risks which may include, but are not limited to, the risk of transmission errors, alterations or duplications, the risk of interception or manipulation of content and the risk of introducing malicious software (malware) by unauthorized third parties. By using such electronic communication channels, you accept these risks and agree to bear any resulting losses or damages.

‍

Data Protection and Privacy Settings

‍

Cape Capital has established a Cape Capital Privacy Notice, which forms an integral part of these Conditions. It explains how personal data is collected and processed at Cape Capital, including this Website. Cape Capital uses cookies to personalize and improve site experience. You can at any time change or withdraw your consent from the Cookie Declaration on the Website. Your consent applies to the following domains: capecapital.com. Your current state: Consent accepted or Consent rejected. Manage your consent.

‍

Applicable Law and Jurisdiction

‍

The access and use of this Website, and these present Conditions are governed by substantive Swiss law with the exclusion of the conflict of law principles. The place of jurisdiction is Zurich, Switzerland.

Last Update: October 2024

Your preference will be securely stored for the next 30 days.

Decline Accept All

To access the website, the terms and conditions need to be accepted.

View terms

Preferences

This Cookie Policy explains what cookies are and how we use them, the types of cookies we use i.e, the information we collect using cookies and how that information is used, and how to control the cookie preferences. For further information on how we use, store, and keep your personal data secure, see our Privacy Policy. You can at any time change or withdraw your consent from the Cookie Declaration on our websiteLearn more about who we are, how you can contact us, and how we process personal data in our Privacy Policy.Your consent applies to the following domains: capecapital.com

Accept all cookies

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form.

In the world of investing, as in chess, a nearly infinite magnitude on information and possible combinations are available to be processed. Chess is a game where all information is on the table while human ingenuity and the cold calculations of machines clash in an endless, infinite battle for success.

Clash of the titans: Kasparov vs. Deep Blue

‍

In the annals of chess history, one match stands out as a pivotal moment that echoed through the corridors of intellect and strategy. It was 1996, and Garry Kasparov, the reigning world chess champion, was about to face an opponent that would test the limits of human intelligence like never before. Across the board sat Deep Blue, an IBM supercomputer designed with the singular purpose of challenging the greatest minds in chess.

‍

This clash of man and machine wasn't just a game—it was a psychological thriller unfolding in real time. Kasparov, known for his brilliant strategic manoeuvres and unrelenting pursuit of victory, faced a foe devoid of emotion, fatigue, or fear. It was the human brain versus the cold, calculating algorithms of Deep Blue.

‍

As the game progressed, the world watched in awe as Kasparov sought to outwit a machine that seemed to know every move before it was made. Deep Blue, with its lightning-fast calculations and precise analysis, posed a formidable challenge. Yet, Kasparov held his ground, tapping into the depths of human intuition and creativity.

‍

Then came the moment that would reverberate through history. In a stunning twist, Deep Blue made a move so unexpected, so unconventional, that it caught even Kasparov off guard. Seizing the opportunity, Kasparov launched a counterattack that left the machine reeling. The champion emerged victorious, but the world had witnessed a glimpse of the future—where the boundaries between man and machine blurred.

‍

However, the story didn't end there. A year later, in 1997, came the rematch that would forever change the narrative. This time, Deep Blue emerged triumphant, marking a turning point in the age-old battle between humans and computers.

‍

That historic moment was captured by a remark from Kasparov which still haunts many:
"I could feel, I could smell a new kind of intelligence across the table." Fascination and fears are natural friends, especially when it comes to technological process. Humans see both, the benefits and the risk of an erosion of the value in human capital.

‍

This epic encounter between Kasparov and Deep Blue revealed the essence of chess as a microcosm of the human condition. In chess, as in life, it's not just about the moves on the board—it's about the psychology, the strategy, and the infinite possibilities that unfold with each decision.

The wisdom of chess applied to investing

‍

Chess, with its opus of moves and counter-moves, mirrors the complexities of the investing world. It's a game where every decision feels like having all information and chips on the table, where the market offers a semblance of symmetry amidst the chaos. Just as in chess, it's your brain versus the other brain, with no referees to blame or chips to gamble. Even though all information is on the table, chess as a game has survived all industrial and technological revolutions. It's estimated that the number of possible positions in the course of a chess is around 10^120 (…a rough estimate that this crossover point would occur after around 40 to 50 moves into the game. Disclaimer: opinions and estimates with regards to this figures differ) while the estimated number of atoms in the observable universe is roughly 10^80. Many other “old” games where all information are on the table died a slow death in the wake of the data storage- and early-stage AI improvements during the 1990s (where Poker probably became even more popular, as “unknows” are/were needed).

‍

On the chessboard, you see all the pieces laid bare—a brutally honest game that partially reflects the society from which it emerges. Consider the rise of competitive chess as a show of intellectual power during the Cold War years. Over many centuries, the game has evolved with the societies that play it, and yes, chess had its tulip and railway mania events too.

‍

In the world of investing, the parallels are striking. Algorithms and CTAs may offer efficiency and speed, but they lack the nuanced and contextual understanding of human behaviour. While investing, we optimize investors' portfolios not just with mathematical precision but with a deep understanding of their needs, aspirations, and risk tolerances—which are subject to change even in the absence of pure “rationals”.

‍

Having stimulated and trained my own chess skills largely on a chess program called “Fritz” (experienced chess players among the audience know the program) I got confronted with the reality, i.e. that I am a normal average chess player: Good when it comes to the opening, “OK” when it comes to the middle game and inferior vs. the computer when it comes to the endgame. However, this follows a common behaviour or skill set when it comes to “human vs. chess computers”. The opening, which can be described as the phase where the game is “strategic”, is the part where we typically look rather competitive, i.e. charting a course through uncharted waters with a blend of analysis, instinct, and a clear strategy. At the same time, we become less competitive the more the game becomes open and more tactical…

‍

Indeed, among other features Fritz teaches you to solve various pre-defined “chess problems”, such opening patterns, positional plays, endgames, etc;

The middle game of investing is a “strategic-tactical” hybrid, where humans and computers dance in a delicate balance. Here, we navigate the shifting tides of the market, adjusting strategies based on new information and changing dynamics. It's a phase where human insight meets computational power, creating a synergy that can lead to success. It's in the endgame where computers often excel. In the final stages, with fewer variables and clearer paths, computers can optimise decisions with precision. Indeed, aside from the world’s best chess players there is evidence that human skills are tilted in favour of the opening and (partially) middle game, which goes on the expense of the endgame for a given level.

The human touch in an era of uncertainty

‍

In today's markets, where there is increasing uncertainty in many fields, the human touch becomes more crucial. When markets are unpredictable, it's the trust element which becomes more important all else equal. We build relationships, hold our investors' hands through turbulent times, and provide the reassurance and guidance needed to weather the storm. And in a world of increasing complexity and uncertainty, it's this human touch that often makes the crucial difference between success and failure. In a world of completely over-indebted governments, outrageously high budget deficits, “human-right’ization” of fiscal policy and the rise of populism in an already stretched geopolitical backdrop, successful investing is more than good performance as the quality of performance is crucial. This requires a fair amount of contextual and cognitive thinking, which involves mental processes that contribute to understanding and making sense of information. Here is where we come full circle: I can’t imagine a better way to stimulate these abilities than playing chess.

‍

This brings us back to the core of the chess analogy in investing. Just as Kasparov had to refocus his strengths in the face of Deep Blue's challenge, investors must adapt to the rise of AI and technological advancements. We must blend human ingenuity with AI, leveraging the strengths of both to create the best strategies for our investors.

‍

In the current market environment, the allure of AI and its potential for growth is undeniable. But amidst the excitement, we must also tread carefully, asking the nuanced questions about where humans excel and where computers shine. Let alone the ethical questions that need answering. I am reminded of Amara’s Law, named after the futurist Roy Amara, that states how humans tend to overestimate the impact of technologies in the short run and underestimate them in the long run.

‍

This is why, as we stand on the cusp of exponential growth, the lessons of the past and the wisdom of chess come in handy to think about what’s to come. We must embrace the possibilities that arise from the combination of human insight and technological innovation. It's about owning the overarching strategy, adjusting based on strong relationships and trust, while letting AI optimise processes, portfolios and reduce blind spots.

‍

So, the next time you ponder investment strategies, remember the lessons of chess. Consider the psychology, the strategy, and the infinite possibilities that lie ahead. And know that in this ever-evolving game of investing, the humans still have some advantages ahead of the robots. For in the end, it's not just about the moves we make—it's about the journey, the growth, and the relentless pursuit of something better. As Kasparov, and many others once said, "Nothing is bigger than the universe." And perhaps, in the vast expanse of possibilities, lies the key to success.

‍

In this article

Michael Lienhard

Head of Fixed Income at Cape Capital

‍

Written by

Important Legal Information & Terms of Use

About this Website

Regulatory Status & Ombudsman

No Solicitation, Offer, Recommendation or Advice

US Persons

Risk Considerations

No Warranties

‍

Limitations of Liability

‍

Use of Links

Electronic Communication Channels

Data Protection and Privacy Settings

‍

Applicable Law and Jurisdiction

To access the website, the terms and conditions need to be accepted.

‍

Clash of the titans: Kasparov vs. Deep Blue

The wisdom of chess applied to investing

The human touch in an era of uncertainty

Michael Lienhard

Head of Fixed Income at Cape Capital

Michael Lienhard

Head of Fixed Income at Cape Capital

More like this

Willard Ahdritz 'With digital, everyone thought the music industry was dead'

'Nobody’s looking out for the little guys'