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Cuts, AI Wallet

Yesterday the Fed cut the overnight rate by 50bps from 5.5% to 5%. This sets a pace and precedence for the last two meetings of 2024, Nov 7th and Dec 18th. Two more 50bp cuts would bring short term rates down to 4%. Two 25bp cuts would bring us to 4.5%. Mega cap tech has had the upper hand over…

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Rates, Agentic AI, Polymarket

Rates Next week the Fed will almost certainly issue its first rate cut, likely 25bps, which will bring the rate between 5-5.25%. There are many takes on historical rate cut precedence, what has happened to markets in the past during rate cut cycles, but I am going to focus on just a few variables that I think are important or…

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Exponential Impact

Exponential Impact Investing philosophy and research invariably comes with a certain degree of mild and persistent anxiety. There’s always a fear that growth has topped out and can’t possibly go any further. It’s helpful to keep in mind that technological progress (human ingenuity) is the ultimate driver of continued growth regardless of where you might see slowing growth. GDP growth…

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More Summer Bites, AI Ping Pong and Quantum

AI Ping Pong Is An Analogy DeepMind recently published a paper on a robot that uses AI, computer vision and an articulating arm to play competitive ping-pong against opponents of various skill levels. Here is a link to the videos. Two things stood out to me. First, they chose to build the robot using a fairly standard articulating robotic arm…

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Quick Summer Bites

Keeping it short this week. Inflation Global shipping rates went parabolic during Covid (10x). Two years later those rates fell -90% snapping back to pre-Covid levels. After two years of normal prices, shipping rates have spiked once again up 5x compared to their historical norms. This is partly due to industry specific issues, but also heavily influenced by war, particularly…

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Japan, AI Management

Big Week By now you’ve probably seen many detailed recounts of the Japanese carry trade that rocked markets this week. Too many people put too much money into the same trade. The problem with overcrowded trades is there are always leveraged buyers who end up as forced sellers. That’s why panic selling looks so brutal, investors are unloading assets at…

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Fundamentals and Price, Five Years

Too much time is spent talking about price. Fundamentals are ultimately what drive equity prices higher over time. To say this another way, a company’s stock price can’t continue to rise unless it continues to be successful. The famous quote by Warren Buffett is, “In the short run, the market is a voting machine, but in the long run, it…

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Cheap Solar Panels and AI Race

Cheap Solar Panels All market prices are fundamentally governed by supply and demand forces. The market for solar panels today is far oversupplied, and that’s creating serious financial instability for suppliers. Access to cheap energy is the bedrock of economic growth, so while this is problematic for the suppliers, it’s generally beneficial for everyone else. To add context, 80% of…

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Probability Matching and Nature

This is an esoteric topic this week, but it’s also one that I find really interesting. Probabilities can sometimes predict the future with surprising precision, just like physics models can predict how a car will drive or how electrical current will flow through a system. We know that flipping a coin will always yield 50% heads and 50% tails, maybe…

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