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One of the world’s best-performing stock markets this month is also one of the most maligned: Japan. The Nikkei 225 is up about 8 per cent in local-currency terms, beaten only by a rebounding Argentina. That will come as some satisfaction to Michael Burry, one of the investors made famous by Michael Lewis’s The Big Short. His Scion Asset Management has laid another bet based on a conviction that prices (in this case Japanese stocks, rather than US mortgages) are out of line with reality. Scion’s Japan portfolio includes manufacturers of everything from roller coasters (Sansei Technologies) to semiconductor production equipment (Tazmo) and fire bricks for electric furnaces (Yotai). There are many other firms out there who would love this sortie by a celebrity fund manager to be hugely significant. But is it? In turning to Japan, Dr Burry faces one of the great investment enigmas of the last three decades. The Japanese stock market is awash with companies with lots of cash and hard assets but with many of them trading well below book value. The trick in Japan has never been identifying “value” stocks, but in picking where there might conceivably be a catalyst for that value to be recognised. For many years, this felt pretty fruitless, but the scene appears to have improved. Activism, in its various forms, is having a visibly powerful effect on the behaviour and share prices of Japanese companies that have been targeted, and has not yet triggered the type of grand pushback that many had feared. Behind the scenes, activist funds have chosen a less high-profile approach, judging correctly that their chances are better with Japanese management if exposure in the media is used as a threat, rather than deployed as an opening gambit. In that context, Mr Burry’s move not only makes sense, but justifies the evolving theory for some that, under current global market conditions, “value” as an investment strategy is due a revival. Value stocks have outperformed in September, and a broader revival in value was on the minds of managers as they descended on CLSA’s recent investment forum in Hong Kong. Indeed, reports the brokerage’s chief Japan strategist, Nicholas Smith, it was the number-one thing he was asked about at the event. But Mr Smith is not convinced. Many of Japan’s value stocks are, he argues, dangerously exposed to further easing by the central bank and an imminent tax hike. Take banks, which account for about two-thirds of the market capitalisation of stocks trading below half their book value. Their performance has been bludgeoned by negative interest rates but many are suffering from lack of demand in the country’s depopulating regions. There is no clear pattern, argues Mr Smith, as to when in the cycle “value” stocks outperform, but there is evidence that it does very badly in times of low growth, low inflation and low yield. Precisely the conditions we have today.

What’s the difference between loving games and having “gaming disorder”? This condition was added by the World Health Organisation to its 2018 revision of the International Classification of Diseases. Sufferers are defined as those who cannot control how much time they spend gaming, even if their lives are negatively affected as a result. The immersiveness and interactivity of games make them easy to binge on, leading to stories of gamers dropping dead on their keyboards after 50-hour sessions. But some argue that gaming should not be pathologised, even when excessive. In fact, a number of researchers are exploring how games might actually treat mental illness. They have developed “serious games”, designed not for play but to treat specific symptoms. Deep places users in a soothing underwater environment, teaching breathing techniques to cope with anxiety. A virtual reality simulation called Virtual Iraq/Afghanistan is used in exposure therapy, returning PTSD sufferers to the scene of their trauma. Games are thought to be particularly effective in treating children, who grasp technology more fluently than therapy. These include Sparx, a fantasy adventure about fighting negative thoughts, and Apart of Me, which guides children struggling with grief. Mainstream titles also provide solace for those with anxiety and depression. The lush, open world of The Legend of Zelda: Breath of the Wild offers freedom to those who feel paralysed by expectations and responsibilities. Its fixed objectives are reassuringly predictable. And for players with social anxiety or unable to leave their homes, online games can be a vital lifeline to a community. Games have also been improving their representation of mental illness. In older titles, psychiatric hospitals were temples of terror harbouring aggressive, straitjacketed patients. The most sophisticated treatment of mental health was the glib addition of a “sanity meter” that players had to keep topped up. Recent games take a more sensitive approach. Psychonauts is a cult hit which, like the Pixar film Inside Out, imagines the topography of the mind with wit, wisdom and enormous visual flair. You play Raz, a spy with psychic abilities who must enter people’s minds to help them through mental blocks. Each mind-world includes literal “emotional baggage” to collect and “mental cobwebs” to clear out. In one such world, you must untangle the conspiracy theories in a milkman’s mind. In another you help an actress silence her (very real) inner critic. A sequel is slated for release next year. In 'Psychonauts', the player enters people’s minds to help them through mental blocks Games are uniquely positioned to comment on mental conditions since they can place players within other subjectivities, playing with their senses of perception and autonomy. Indie developers exploit this best. Depression Quest is intended to help non-sufferers understand the condition. You must navigate the everyday life of your depressed protagonist, but your options vanish as your emotional resources are gradually exhausted. An Aspie Life simulates living with autism, registering sensitivity to sound with an on-screen meter and showing other people as dark shadows whose body language you are unable to read. Titles such as Gris, Child of Light, Night in the Woods, Celeste and Sea of Solitude all operate as elegant metaphors for coping with grief, anxiety and dissociation. The game most lauded for its mature handling of mental health is Hellblade: Senua’s Sacrifice, which charts Celtic hero Senua’s journey to the underworld to resurrect her lover. Senua experiences psychosis, hearing voices which shout and whisper, threaten and cheer, guide and mislead her. The game developers invited neuroscientists and voice-hearers to advise them, creating a system where, if you wear headphones, the cacophony of voices pans unsettlingly from the left to the right ear, realistically mimicking auditory hallucination. Hellblade cements gaming’s great potential for empathy. When you walk a mile in someone’s virtual shoes, it’s easier to understand their inner state, the invisible symptoms of their mental illness. Players see that psychosis is not binary. We all sit somewhere on its spectrum. We find Senua’s symptoms somehow familiar: harbouring conflicting voices in our heads, putting obstacles in our own way, fighting enemies which might not even be real. We learn something about society’s most misunderstood, and about ourselves.

Artificial intelligence has by now been linked with pretty much every imaginable line of business. As a concept, it risks being diluted into oblivion.

So it’s a breath of fresh air when someone provides concrete details of the changes AI technology is driving – usually at the fringes of business models.

Morgan Stanley has a new piece of research out this week, which covers “the development of superhuman artificial intelligence beating professionals at poker”, which it says poses a risk to the online gaming ecosystem.

Computers have already reached “superhuman” levels at limited version of the game, such as two-player pot limit poker, which limits the range and size of bets massively. They have of course already reached this level for pattern-intensive games like chess, checkers, Go, and rock paper scissors (see how you fare here).

Scientists at Carnegie Mellon have been working on a poker artificial intelligence program that they say is better than human professionals at six player games, with no pot limits. It’s called Pluribus, and its strategy was developed over eight days at a “cloud computing cost” of $144. From the report:

Poker has in general been especially difficult for AI given the computer doesn't know the cards their opponents have, and it involves a level of deceit or bluffing. Pluribus' approach, outlined below, is a milestone in AI development and for poker, which could, in Brown & Sandholm's view, be adapted "to basically any other form of poker" including, say, nine player variants or tournaments.

Pluribus’ strategy is based on self play, which was also used for backgammon, Go, and Starcraft 2. It also uses “abstraction”, where slightly different hands or bets are treated as the same thing, to reduce the complexity of the game.

The broader implication here is one that will be familiar to anyone who has played online chess: the risk of players using software on their computers to assist their decision-making. (It’s not clear from the report that the new technology is definitively better than human experts, by the way). 

One full-time player we spoke to says bots are already very common on poker sites. The Morgan Stanley report mentions that professionals see them as “relatively easy to spot” (and often a source of easy money), but the same is probably not true for the generic “net depositor” player, from whom the bulk of revenues are ultimately sourced.

If these amateur players stop seeing poker as a game of skill, Morgan Stanley argues, that poses a risk to the revenues they provide. A bigger threat is to the professional players, as their expected returns would fall if bad players use better software.

One striking aspect of the report is the response of the platforms. Major players like PokerStars have “dedicated integrity units” devoted to identifying bots, and partypoker has closed over 500 bot accounts since December. This is highly reminiscent of other parts of the online economy, particularly Amazon reviews. Amazon says it uses “machine learning” to analyse incoming and existing reviews, and estimates that 90 per cent of inauthentic reviews are computer generated. Glassdoor, the employee review site, uses similar language.

Basically, any business based around moving human behaviour on to the internet stands to be impacted (for better or worse) by software that replicates that human behaviour. Games of software cat and mouse are likely to have political and economic ramifications far beyond the relatively small niche of online poker.

That world is edging towards a dystopian scenario, where people sit inactive in front of screens, playing Pluribus against Pluribus rather than poker, like some kind of self-driving car race. But don’t worry, a tech company will soon come along with a radical solution: the pictures on cards will be printed out on organic materials, so that you can hold them in your hand, maybe in a saloon, and play without the risk of algorithmic interference.