dbs
- long bull market lower the probability of achieving results above market, especially if the performance is concentrated in a select group of stocks/industries
- not knowing the factors in detail, but you might not have a period long to assess the performance. Factor performance tends to be attached to "performance regimes"
- the factors you considered in the past were underpriced, and in your evaluation window they are no longer in such state, so expected returns are lower
- market has catched up on the factors that you are using (your "free lunch" has been eaten). I guess there's a reason why nowadays quants freely join podcasts while a few years ago we had to be very careful in interviews ("do they want to hire me or do they just want to know what I'm doing/not doing")
LLMs get you to average.
LLMs are not good at decision making under uncertainty.
Unpredictable, unreliable and especially unsafe (built like a tank but prone to accidents due to all the random electronic failures and malfunctions)
There was some talk a few years ago in the country where I live to lower the voting age. That talk was mostly driven by the parties that would benefit the most from a younger electorate. It had nothing to do with “democracy”.
https://sicnoticias.pt/pais/2023-07-29-A-explicacao-completa...
I worked many years as a quant. Strategies based in unpublished findings tend to be very profitable. But once that info becomes widely available it is just a matter of time until getting diminished returns. Thus there is a high incentive to not publicise.
Also moats should be seen as a consequence of multiple dynamics - industry, management, etc - not as a cause.
A business that is growing and by growing is reinforcing their moat is a powerful multiplier.
At appearance the output _seems_ incredible but once one starts pushing for more or requiring consistency for production, it requires a tremendous effort to put in place or it is simply not possible.
I have also a few decades in the field, especially regarding automation of knowledge processes, so genuinely interesting in getting other viewpoints.
Many of these strategies stopped working in 2008 because the markets became too crowded with players exploring them. Especially the ones that have low drawdowns attract a lot of competition. The writing was already in the wall with the quant bloodbath of 2007.
Where is AAPL competitive position being compromised? * Android vs iPhone: they just need to continue executing * Windows vs iOS: MSFT is actually telling them how to position
Given their technical moat on integrating hardware & software there is an hidden opportunity for them in being the best supporting local/on-device LLMs
Out of the major players they have less disruption risk, grow depends less on AI meeting expectations and they have hidden optionality. How is this falling behind?
My data sample is very small but I have a pretty good track record of shifting career focus in the last 20 years. In particular, 2000 and 2008 were two HUGE shifts for me as the writing was on the wall before crisis hit. Common theme to drive change: too much competition. I jumped out from areas where there was still tremendous growth to be seen but no serious money to be done.
I’m calling a third.
https://en.wikipedia.org/wiki/Gaiola_(construction)
Reconstruction immediately after the earthquake saw a generalised adoption of this type of architecture.
Why: skeptical/scientific thinking
Also you don't get rich by paying for liquidity (which is not to say you will always get rich providing liquidity)