Is this at all a fair analogy?

Only time will tell, but it could be. The idea of a giant computer system sucking all the "alpha" out of the market sure ain't a pretty idea for flesh-based fund managers, but it's a possibility.

Renaissance Technologies was started by Jim Simons in 1982. Its $5 billion Medallion Fund has averaged 35% annual returns, after fees, since 1989, and is considered in the industry to be the most successful hedge fund, yielding returns ten percentage points higher than legendary investors Bruce Kovner, George Soros, or Paul Tudor Jones.  Extremely secretive, the company operates out of a mini-campus on Long Island, New York. Administrative functions are handled out of offices in Manhattan.

For over two decades, Renaissance has been at the forefront of research in mathematics and economic analysis. Renaissance employs more than 60 top scientific specialists, including mathematicians, physicists, astrophysicists and statisticians, who review market data to find statistical relationships that predict the price movements of commodities, currencies and stocks.

Renaissance uses computer-based models to predict price changes in easily-traded financial instruments. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions. Renaissance represents a validation of the quantitative trading model and trades with such high-frequency that it accounts for 10% of all the trades occurring on NASDAQ some days.

For more information about Jim Simons, see here. - Ed