Ben Gilbert: belief

Transcript context

…It’s like we were talking about with Markov models and hidden Markov models. That is the foundation of RenTech. That is one of the foundations of AI and generative AI today. Another big one is this concept that you should trade on a secret that others are not trading on. On the face of it, it seems obvious. Of course I should come up with some strategy to trade on that other people aren’t trading on. But I said a couple of words there, which is ‘of course I should come up with.’ Therein lies the fallacy. I think most investment firms try to get their ideas out of people, and then do an incredibly rigorous amount of data analysis to figure out if they should put those trades on or not. I could be wrong, but I do not think modern RenTech does that. I think all of their investment ideas come from data and come from signal processing. Therefore you are going to put trades on that make no intuitive sense. When you’re putting trades on that are profitable and make no intuitive sense, you aren’t going to have competitors. If you find a relationship between two things that a human could never come up with or dream of those relationships—and we’re saying too it end things, 10 things, 20 things, 100 things and in various different weights at various different timescales—that is a killer recipe to exploit a secret that no one else knows and be able to beat other people in the market. Such a good point. Many, if not most, of the other quant firms are not doing that. Some of them maybe, but I think most of them are the model is suggesting things, and there is a person or persons who are the master portfolio allocators that pull the trigger or don’t pull the trigger.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.