Investment Management

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…

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…

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…

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…

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…

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…

John Osbon’s T-Bill Comments: The Treasury Market is Still the Safest Place to Be One subset of the Treasury market, the bill market, remains the safest investment option for several reasons. 1. Guaranteed Returns The T-Bill market is unique in that it is the only place where the SEC allows the use of the term “guarantee” regarding returns. This is…

Jumping between topics related to tech and markets, this week I wanted to address four compelling areas of the private markets. For each of these markets, we prefer smaller managers with long operating track records. Public markets continue to converge around the US mega cap tech theme. Diversified investors need to find compelling alternative quality opportunities and in public markets…

What makes AI so fascinating is how flexible it is and how it can be applied successfully to an endless number of use cases. In the past, I’ve asked ChatGPT to create comprehensive meal plans with recipes for each meal and corresponding shopping lists. I also use it as a personal trainer and to answer general health questions. Recently, I’ve…