Some things and ideas: November 2024
Every month, I put out a “some things and ideas” post with random thoughts on articles or market stuff that caught my attention in the last month (as well as some fantasy book recommendations and some other monthly recurring reminders!). Here’s this month’s:
My monthly overview (Monthly recurring piece)
I consider YAVB my “empire” with four core pieces: this blog / substack (the free side), the premium side of this blog, my podcast (also on Spotify, iTunes, or YouTube), and my twitter account. You can see my 2024 vision and goals for the empire here. If you like the blog / free site, I'd encourage you to check out the pod, follow me on twitter, and maybe even subscribe to the premium site!
A bonus note: I get asked from lots of people about how to break into the finance industry. I detailed it more here, but my top advice would be to go out and start a substack (substack recently gave me a referral code if you start one; if you use that, awesome! But I’ve been recommending starting a substack long before they offered referrals!). If you do launch a substack, please let me know so I can try to be helpful.
AI and investing
TL;DR: I’m going to an event (“The New Era of Investing: How AI is Revolutionizing the Investment Landscape”) AlphaSense is hosting at their NYC headquarters on Wednesday, December 4th. If you’re in NYC and going, let me know / let’s meet up! If you’re not in NYC, the event will be live streamed; you can sign up here.
I put a post up earlier this month (The "broken market", evolving your process, and Munger's self-pity) discussing how markets evolve and get harder over time, and as an investor you can either sit around pitying yourself while under performing, or continue to improve / adapt to the market as it evolves and changes.
I’m a big basketball fan, and I had Daryl Morey a bit in the back of my head when I wrote that article. He’s talked about how the edges in basketball get smaller and smaller over time, and that the next edge is in talent development (I’ll broadly call that “sports science”).
The talent development / sports science field is obviously really broad, but it is interesting to think about how far we’ve come. Consider this simple evolution:
In the 60s, players would stop smoking cigarettes to get ready for the playoffs.
In the 80s, players would stop drinking beer to get ready for the playoffs
Today, players are absolutely meticulous about their diets. Chris Paul extended his career by going vegan, and Derek Henry (NFL, not NBA) spends ~$250k/year to take care of his body (including having every meal prepared by a Chef to fit his diet).
If we lived in a hypothetical world where you could take a great from any sport from the 80s and put them into today’s leagues without any additional training / sports science, I guarantee they would get played off the floor. That’s not to say that the greats of yesteryear couldn’t make it in today’s game; if they had the same sports science / training I’m sure they’d be just as elite. But athletes today are, across the board, bigger / faster / stronger / better than their predecessors thanks to advances in sports science.
So how does all of that relate to investing? AI is one of the largest risk factors and opportunities I’m aware of as an investor. I sometimes worry that AI will be like computers for chess when it comes to investing; eventually AI gets so good that no human could hope to compete with them…. but I think markets and investing will always have some degree of irrationality / people / human psychology to them, and I suspect that a skilled human working with AI will outperform both a human on their own and a computer on their own (as we’ve seen in other fields; that’s a silly sponsored article but it’s directionally correct and we’ve seen humans + computers outperform computers in chess).
In this world, if you’re an investor competing without using AI at all, you’re kind of like an NBA player from the 60s smoking cigarettes at halftime and trying to compete in today’s NBA. No matter how talented and skilled you are, you’re simply not going to make it!
I’ve already found some useful ways to incorporate AI into my process…. but I suspect I’m behind the curve / there’s lots of additional things I can and should do. If you have suggestions for using AI to improve as an investor, I’m all ears / the comments are open.
Along those line, AlphaSense is hosting an event (“The New Era of Investing: How AI is Revolutionizing the Investment Landscape”) at their NYC headquarters on Wednesday, December 4th. I’m going and hoping to learn more about improving my use of AI in my process; if you’re in NYC and going, let me know / let’s meet up! If you’re not in NYC (or haven’t signed up yet; I think the in person attendance is maxed out), the event will be live streamed; you can sign up here.
State of the markets (Monthly recurring piece)
It’s not a perfect indicator, but I like to use the CNN “Fear & Greed” Index just to quickly quantify where the markets are.
Last month, we remained just barely into greed territory. This month, we’re firmly in greed territory, but not wildly so…
Honestly, that’s a surprising result to me (as I tweeted out). Look, I realize the fear and greed index is a silly little index. It’s based on the S&P 500 and NYSE, so it misses what’s happening in a lot of the smaller companies I (and I suspect most of my readers) tend to traffic in. And it uses lots of moving averages, so if things get really greedy and just kind of stay there, it might miss longer term over/under valuations. But it’s still a useful rule of thumb, and I’m just shocked we’re not in extreme fear given some of the FOMO I’m seeing in some of the meme-ier stocks (crypto, AI, etc.).
There’s still plenty of value and interesting situations out there… but (as I mentioned in the November ramblings) I suspect the world is going to be just a bit more volatile going forward. Being on the other side of that greed seems like a decent place to be to me!
Nerd Corner (Monthly recurring piece)
There’s no hiding it; I’m a massive nerd. I read 3-4 fantasy books a month, my favorite pastime is playing board games with my wife and friends, and I was an eager supporter of the Brandon Sanderson (original) Kickstarter (yes, I splurged and went for the hardcover books).
I didn’t support Sanderson’s DND-style board game…. but only because my wife would murder me if I bought another board game when I have a whole Dungeon Master kit collecting dust. Still, I wanted to highlight it because between the two Kickstarters Sanderson will have raised >$50m for new projects; if you’re a fan of fantasy and that type of fan enthusiasm doesn’t encourage you to give him a try, I don’t know what will! As I mention below, if you’re trying him out, I’d probably start with Mistborn, though Tess and the Emerald Sea is basically a standalone book and might be my favorite book he’s written
Anyway, I figured a few of you are nerds like me, so I started this segment to give recs of what I’m nerding out over currently, with the hope that you’ll either try it and enjoy it or recommend me similarly nerdy things that I’ll enjoy. This month’s recs:
For long time readers, you knew what was coming. Wandering Inn book 14 came out, and I instantly put everything else to the side and dove in. It may be the best one yet. It comes in at a brisk 1k pages, so I’ll be deep into the Inn-verse for most of December…. but planning on diving into Dungeon Crawler Carl book 7 the moment I’m finished….. though with Stormlight book 5 coming out next week, I may need to put both of those to the side to finish up the Stormlight series! What a month for fantasy books!
PS- outside of my monthly recs, I constantly get asked what my favorite fantasy books are. So I’m just going to throw this list out monthly:
Anything Brandon Sanderson writes; he’s by far the best fantasy author out there. I’d probably start with Mistborn, though Tess and the Emerald Sea is basically a standalone book and might be my favorite book he’s written. The Frugal Wizard’s Handbook for Surviving Medieval England is also a standalone book and a very fun and fast read.
Kingkiller is probably the best series I’ve ever read; waiting for the third is agony.
Gentleman Bastards is right up there with Kingkiller; the mix of fun and world building is outstanding.
Red Rising series is more sci-fi, but my god is it good. I would literally stay up all night to read every book the day they came out (note: I’ve only read the first trilogy; I’m going to read the second when the last book comes out later this year).
If you’re looking for something a little more under the radar (most of the books above are widely regarded as some of the best fantasy books / series ever), the Licanius Trilogy was fantastic.
First Law trilogy is excellent. It can get a little brutal / graphic though; there are a bunch of sequels and spins, but I’ve never been able to finish them because one of them got so brutal I just put the book down and never picked it up again. But the first trilogy is really, really great.
The Cradle series probably isn’t as “good” as the books above, but I binged them and every fantasy fan I’ve recommended them to has said something along the line of “I read all ten books in two months after I opened the first one.”
I’ve also really enjoyed that author’s newest series, Last Horizon!
The Wandering Inn series isn’t for everyone, and the first ~150 pages of the first book need to get powered through…. but, if you can power through them, the world building here is incredible, and I’ve had so many friends get hooked by this series. If you like hard fantasy, I can near guarantee you’ll like it.
The Silvers Epic (Flight of the Silvers, Song of the Orphans, War of the Givens) is more sci-fi than fantasy, but it’s one of my favorite series I’ve ever read and I think is wildly creative in how they use time travel / multiverse as a plot point (the last book was a little slow, but the ending wrapped everything up beautifully / it got a little dusty in the room I was reading).
Other things that caught my eye (monthly recurring piece)
microstrategy $26B bitcoin cash is larger than IBM, nike cash holdings
New York City Council Approves Bill Shifting Broker Fees to Landlords
whether 7-eleven is bought or not, convenience store consolidation looms
Found this look at the history of time zones and how they came to be fascinating
NBC ready to pay triple to gobble up thanksgiving parade broadcast rights
On AI, you may have already seen it, but Brett Caughran at Fundamental Edge has been putting out some great content in his “cutting egde” series. Has talked to some people who’ve created AI-based investment tools as well as a HF manager who is doing some advanced stuff with AI in his process.
Do you ever read Wandering Inn on the website?