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Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

wsj.com

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Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#51

Post by brilliantcode »

I had a good chuckle reading this article:

> At Bridgewater, most meetings are recorded, employees are expected to criticize one another continually, people are subject to frequent probes of their weaknesses, and personal performance is assessed on a host of data points, all under Mr. Dalio’s gaze.

I think this is a testament to the disconnect between people in this space and technology. The idea that some mythical holy grail technology will produce alpha is as illusive as relying on automated trades.

> Bridgewater says about one-fifth of new hires leave within the first year. The pressure is such that those who stay sometimes are seen crying in the bathrooms, said five current and former staff members. This article is based on interviews with them and more than a dozen other past and present Bridgewater employees and others close to the firm.

And it confirms my suspicions. I stopped reading here because it's another PR piece for Bridgewater.

I think we will see a small homage to Bridgewater in Mr. Taleb's upcoming books as an example of "techno-irrational exuberance" along with other hilarious empty suit moments described in the book Fooled By Randomness.

Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#52

Post by prostoalex »

yannickt wrote: post #36
chollida1 wrote: post #18

I think this.... > Mr. Dalio returned to run Bridgewater earlier this year after stepping back to a mentor role six years ago. Is what's driving almost all of his new found desire for a unified AI to run everything. Here you have a man who by any measure has been wildly successful, he tried stepping back and letting other take over but ended up finding that the team he left in charge didn't make the exact decisions h…

> see: https://www.principles.com/ This is a very, very good read. Thanks for sharing.

This is truly one of the best readings, one of the three books I recommend everyone read (and re-read) every now and then.

Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#53

Post by sharemywin »

Declanomous wrote: post #41
sharemywin wrote: post #21

That has got to be the worst case of group think ever. What happens if you challenge one of the "principles"?

Sounds like you lose upside down Christmas trees at the company party, get demoted from co-CEO, get fired, or get chewed out so hard you cry in the bathroom. Honestly, I just read a few other articles about Bridgewater Associates, and even though it seems cult-like, I think the principles probably help prevent group-think. For instance, the second most important goal is no talking about people behind their back. If a…

seems to me like challenging peers is ok, but don't dare challenge management. So, yes you'll get day to day issues worked out, but things like ethics, general strategy, and other high level issues you run into problems. So, when they f* u* it will be huge...because the whole organization will be blinded to it.

Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#54

Post by samatman »

prostoalex wrote: post #52
yannickt wrote: post #36

Earlier quoted context omitted.

> see: https://www.principles.com/ This is a very, very good read. Thanks for sharing.

This is truly one of the best readings, one of the three books I recommend everyone read (and re-read) every now and then.

Would you care to share the other two?

Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#56

Post by bbcbasic »

adventurer wrote: post #35
Hydraulix989 wrote: post #24

You can't possibly get enough training data for this.

I don't think it is fair to say it is not possible. There is an AI system out there that has correctly predicted the superfecta for the Kentucky Derby based soley on user predictions. http://www.newsweek.com/artificial-intelligence-turns-20-110...

I work for a company that bets on the horses, and yet they use broadly similar techniques. But this doesn't replace humans at all.

Also as an aside, correctly predicting a superfecta happens quite a lot, and it is hard to tell from sample size of 1 if this was luck, skill or a combination of both. Probably a combination of both - their algo may have reduced the odds to 200-1 for example, and luck did the rest.

Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#57

Post by Terretta »

yannickt wrote: post #36
chollida1 wrote: post #18

I think this.... > Mr. Dalio returned to run Bridgewater earlier this year after stepping back to a mentor role six years ago. Is what's driving almost all of his new found desire for a unified AI to run everything. Here you have a man who by any measure has been wildly successful, he tried stepping back and letting other take over but ended up finding that the team he left in charge didn't make the exact decisions h…

> see: https://www.principles.com/ This is a very, very good read. Thanks for sharing.

// DISCLAIMER: I work there.

For those who've built tech companies up from the 10 to 1000 people range, there's a lot in that link that's very easy to recognize.

If you interpret back from the more traditional business lingo, you will recognize key 'iterative development' ideas applied outside engineering.

This allows a sizable 30 year old enterprise to handle new ideas much more as a tech startup would.

On the main article topic, instead of the article's quote, “like trying to make Ray’s brain into a computer”, I'd say as an engineer imagine if you could "run a company under a debugger." Frame it that way, and I think you could imagine some neat possibilities.

If you're very good at software development / distributed systems engineering, and think self-driving management or a self-driving fund might be even more interesting than yet another self-driving car, we're always hiring. Hit me up via profile.

Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#58

Post by prostoalex »

samatman wrote: post #54
prostoalex wrote: post #52

Earlier quoted context omitted.

This is truly one of the best readings, one of the three books I recommend everyone read (and re-read) every now and then.

Would you care to share the other two?

"The Power of Now" by Eckhart Tolle and "Starting Strength" by Mark Rippetoe (applicable to men mostly) contain lifetime lessons on mind and body management. "Principles" is very useful for mental models and just critical thinking (or, rather, structured self-doubting).

Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#59

Post by leroy_masochist »

cmurf wrote: post #32

I'm gonna guess these employees have a work for hire contract of some sort, so that their ideas or potentially copyrightable or patentable methods, belong to their employer.

They have one of the most onerous non-competes of any asset manager, especially for people who touch any of their strategies.

Re: Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains

#60

Post by rajacombinator »

yannickt wrote: post #36
chollida1 wrote: post #18

I think this.... > Mr. Dalio returned to run Bridgewater earlier this year after stepping back to a mentor role six years ago. Is what's driving almost all of his new found desire for a unified AI to run everything. Here you have a man who by any measure has been wildly successful, he tried stepping back and letting other take over but ended up finding that the team he left in charge didn't make the exact decisions h…

> see: https://www.principles.com/ This is a very, very good read. Thanks for sharing.

As a case study in megalomania perhaps ...
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