#159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading
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The following is a conversation with Richard Crab, founder of Numerai, which is a crowdsourced hedge fund, very much in the spirit of Wall street bets, but where the trading is done not directly by humans, but by artificial intelligence systems submitted by those humans. It's a fascinating and extremely difficult machine learning competition where the incentives of everybody is aligned. The code is kept and owned by the people who develop it. The data, anonymous data, is very well organized and made freely available. I think this kind of idea has a chance to change the nature of stock trading, and even just money management in general, by empowering people who are interested in trading stocks with the modern and quickly advancing tools of machine learning. Quick mention of our sponsors audible audiobooks, trial Labs, machine learning company Blinkist app that summarizes books and athletic greens all in one nutrition drink. Click the sponsor links to get a discount and to support this podcast. As a side note, let me say that this whole set of events around GameStop and Wall street bets has been really inspiring to me as a demonstration that a distributed system, a large number of regular people, are able to coordinate and collaborate in taking on the elite, centralized power structures, especially when those elites are misbehaving. I believe that power, in as many cases as possible, should be distributed, and in this case, the Internet as it is for many cases, is the fundamental enabler of that power. And at the core, what the Internet in its distributed nature represents is freedom. Of course, the thing about freedom is it enables chaos or progress, or sometimes both. And that's kind of the point of the thing. Freedom is empowering, but ultimately unpredictable. And I think in the end, freedom wins. If you enjoy this podcast, subscribe on YouTube, review it on Apple Podcasts, follow on Spotify, support on Patreon, or connect with me on Twitter at Lex Friedman as usual, I'll do a few minutes of ads now, and no ads in the middle. I try to make these interesting, but I give you timestamps, so if you skip, please still check out the sponsors by clicking the links in the description. It's the best way to support this podcast. This episode is brought to you by Audible, an audiobook service that has given me hundreds, if not thousands, of hours of education through listening to audiobooks. Many of the books I mentioned on this very podcast were ones I've listened to with Audible, which feels like cheating, but it's not. It's the same book. Examples include American Cosmic, which is about ufos. Surely you're joking, Mr. Feynman, by the man himself, Richard Feynman. The Ascent of money by Neil Ferguson, which is a great history about money. Your Inner Fish by Neil Schuben, which is one of my favorite books on evolution. The new Tsar by Stephen Lee Myers, which I think is the best, most objective work on Vladimir Putin that I've read to date. I've read quite a lot of biographies about him and of course, the book that I've mentioned way too many times, the rise and fall of the Third Reich by William Shire.
I think it's over 50 hours long.
And one hell of a crazy ride through the darkest moments of human history. Next two weeks Audible is doing a special offer for listeners of this podcast. Only $10 995 a month for your first six months if you visit audible.com lex or text lex to 500 500. I don't even know how that works.
Or why you'd want to do that.
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That's way better, I think.
But I might be coolest. If you like texting, I guess, go ahead and text. They have thousands of titles to choose from, so visit audible.com Slash Lex now they're considering supporting this podcast, so you know what to do if you want to help out. It's audible.com slash Lex. This episode is also brought to you by Triolabs, a company that helps build aibased solutions for businesses of all sizes. I love these guys, especially after talking to them on the phone and checking out a bunch of their demos and blog posts. If you're a business or just curious about machine learning, check them out@triolabs.com. Lex they're working on price optimization, early detection of machine failures, and all kinds of applications of computer vision. Their price automation and optimization work is probably their most impressive in terms of helping businesses make money. Also, they release open source code on GitHub, like a computer vision tracker, for example. Tracking, to me, is a fascinating problem.
It very much remains unsolved, especially in.
The application of deep learning to this problem. But we've seen a lot of progress in the past five years. Anyway, Trial Labs is legit. If you own a business and want to see how AI can help you, check them out@triallabs.com. Slash Lex this episode is also supported by Blinkist, my favorite app for learning new things. Blinkist takes the key ideas from thousands of nonfiction books and condenses them down into just 15 minutes that you can read or listen to. As part of that, I use Blinkist to try out a book that I.
May otherwise never have a chance to.
Read, and in general, it's a great way to broaden your view of the idea landscape out there and find books that you may want to read more deeply. With Blinkist, you get unlimited access to read or listen to a massive library of condensed nonfiction books. I also use Blinkist shortcast to quickly catch up on podcast episodes I've missed. Right now, Blinkist has a special offer just for the listeners of this podcast. Go to blinkist.com Lex to start your free seven day trial and get 25% off of a Blinkist premium membership. That's Blinkist.com lex. They want me to spell out Blinkist, but I'm sorry, folks, if you don't know how to spell Blinkist, you're on your own in this world. The show is also sponsored by Athletic Greens, the all in one daily drink to support better health and peak performance. It replaced a multivitamin for me and went far beyond that with 75 vitamins and minerals. I do intermittent fasting of 16 to 24 hours every day and always break my fast with athletic greens. I honestly can't say enough good things about these guys.
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I've taken it every day for many years now. And athletic greens finally is now offering fish oil. And they're going to give listeners of this podcast free one month supply of wild caught omega three fish oil. When you go to athleticgreens.com lex to claim the special offer that's athleticgreens.com for the drink and the fish oil, trust me, it's worth it.
You will love it.
And now here's my conversation with Richard Crab.
You.
From your perspective, can you summarize the important events around this amazing saga that we've been living through of Wall street bets, the subreddit, and GameStop? And in general, just what are your thoughts about it? From a technical to the philosophical level.
I think it's amazing. It's like my favorite story ever. When I was reading about it, I was like, this is the best. And it's also connected with my company, which we can talk about. But what I liked about it is I like decentralized coordination and looking at the mechanisms that these r Wall street bets users use to hype each other up to get excited to prove that they bought the stock and they're holding. And then also to see that, how big of an impact that that decentralized coordination had, it really was a big deal.
Were you impressed by the distributed coordination, the collaboration amongst, like, I don't know what the numbers are. I know numerize looking at the data after all of this is over and done. It'd be interesting to see from a large scale distributed system perspective to see how everything played out. But just from your current perspective, what we know, is it obvious to you that such incredible level of coordination could happen where a lot of people come together in a distributed sense, there's an emergent behavior that happens after that?
No, it's not at all obvious. And one of the reasons is the lack of kind of like credibility. To coordinate with someone, you need to kind of make credible contracts or credible claims. So if you have a username on our Wall street bets, like, some of them are like, deep fucking value is one of them.
That's an actual username.
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