There’s a pose that very sick farm animals sometimes take when they’re near death, where they lie down and twist their head way back into their shoulder in a very unnatural way. It’s an odd sight if you don’t know what it signifies, a horrible sight if you do.
Both the Republican Party and the Democratic Party are starting to twist their heads back into their shoulders. I don’t know if it’s too late to save them or not, but I’m increasingly thinking that it is. We need to start thinking about the funeral, who’s going to speak, and what they’re going to say.
Portfolio Manager — Of all the roles this is where I think things really need to change in terms of who sits in this seat. It can no longer be hedge fund bros, they simply won’t survive here. Nor will the pure gunslingers and tape readers, gone. And you certainly don’t want the pure quants sitting in this seat. PMs of the future are going to be far more interpersonal and process driven….
A couple of weeks back I shared a link to the story of ImageNet and the importance of data to developing algorithms. Ars Technica reports on two ‘at the coalface’ battles over data access with HiQ and Power Ventures fighting with LinkedIn and Facebook over data access. I’m not advocating a position on this but, to be sure, small — and currently obscure — court cases like these will, cumulatively, end up setting the precedents which will have a significant impact on the evolution and ownership of powerful algorithms that are increasingly driving behavior and economics.
In Part 4 of the Notes from the Field Series, Ben identifies how the natural lines of a tree and shaping the tree to follow those lines over time is a lot like shaping a portfolio.
Diversification is clearly one of the things that matter. Unfortunately, most investors pursue the Meme of diversification! instead of the real thing, and end up with a false sense of security and inefficiency.
Confidence levels for the Social and Behavioral Sciences, Claude Berrou on turbo codes and informational neuroscience, and thermodynamics in far-from-equilibrium systems.
There is no animal more important to the ascendancy of Western Civilization than the horse, and no invention more important than the horse collar. After all nothing shapes history like advances in productivity. Part 3 of Ben’s Notes from the Field series here.
Programmable money, ImageNet: the data that changed AI research, Auto Public Offerings and the paradox of historical knowledge.
Back by popular demand, it’s the Epsilon Theory Mailbag! Today’s edition covers notes from the past two months including “Tell My Horse”, “Post-Fed Follow-Up”, “Notes…
Part 1 of this note highlighted the supremacy of the risk decision in portfolio construction. In this follow-up, Rusty observes that many investors may be assuming that the natural risk of asset classes is “right” for them.