Monday, January 9, 2017

Matt Levine Is Back At BloombergView

And he leads off with:
Hi, I'm back!
I like the exclamation point. From BloombergView: 

Searching for Meaning and Prosecuting Fraud
Hi, I'm back! I was away on paternity leave for a few weeks, during which I deleted the Twitter app from my phone, which is the single best use case I have yet found for Twitter. Few internet products have ever given me as much joy as Twitter did, when I deleted it. I don't know how Twitter can monetize that? Anyway now I'm back, at Money Stuff, and on Twitter.

The other appealing use case for Twitter seems to be to become president and then use the presidency, and Twitter, to pursue various revenge whims. That is monetizable, though apparently not by Twitter, and so of course: "This app will send you alerts when Donald Trump tweets about stocks you own." The app is called Trigger. (Counterpoint: "Stop worrying about Trump’s tweets.")

My model of Bridgewater Associates is that it is a computer that makes pretty good investing decisions, and 1,700 people whose job is to distract each other so that they don't interfere with the computer's investing decisions. I always think that I am joking about this model, in part because, you know, why have all those people? The computer is running a very successful investing business, and the people are running sort of an odd group-therapy session, and there don't seem to be too many synergies between those two activities? But it seems to work for them. Here is a crazy interview between Henry Blodget and Ray Dalio in which Dalio says: "I have a saying that the whole purpose of what we do is meaningful work and meaningful relationships, and they support each other." What if ... what if the purpose of what they did was to make money for clients? It doesn't even come up. It's not that they don't make money for clients. They do! It's just not a ... goal. They seek meaning, and the money takes care of itself.

Or there is this crazy Wall Street Journal article about how Bridgewater hired an artificial intelligence expert to automate, not the investing, but the group therapy:
Though outsiders expected Mr. Ferrucci would use his talents to help find hidden signals in the financial markets, his job has focused more narrowly on analyzing the torrent of data the firm gathers about its employees. The data include ratings employees give each other throughout the work day, called “dots.”
Think of how little sense this makes. Most of Bridgewater's employees aren't involved in its investing activities. And now it is building a sophisticated computer system, not to analyze the markets, and not even to analyze people who analyze the markets, but to analyze people who don't analyze the markets. Somehow this makes it a massively successful hedge fund....MUCH MORE