Despite the economic environment, BlackRock (NYSE: BLK) has a knack for what works. It's a testament to its people, as well as its singular focus on asset management. No doubt, such things were crucial for allowing BlackRock to thrive during the financial disarray over the past year.

Now, as the markets stabilize, BlackRock is there to reap the rewards. In fact, according to the firm's Q3 report, earnings spiked 46% to $317 million, or $2.27 per share (although, a part of this came from a tax benefit).

Bloomberg.com has an excellent article on the whiz-bang world of hedge funds (the article is also long – at about 4,500 words).

The focus is on Barclays Global Investors, which has a variety of hedge funds that use a sophisticated software system: Optimizer. True, there are many number-crunching software systems. But, as for the Optimizer, it tracks investments – stocks, bonds and currencies -- across the globe. Of course, it is the result of top-notch PhDs, mathematicians, statisticians, and even physicists.

In fact, the Optimizer makes money any way it can – either by going long or even going short. After all, don't super computers seem to consistently beat human chess masters?

Well, investing may actually be tougher than chess. Keep in mind that despite the complex algorithms, Optimizer has still underperformed its hedge fund peers over the past few years.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.