Thanks a lot for this POV. Here are my reflections:
a. BAI were defined by Bill Miller already, adding T and making it ‘BAIT’, helps.
b. Liked the concept of ‘attention’ (from Informational edge) via Nvidia illustration - for me that creates an ‘event’, that leads to re-pricing, both ways. The ‘event’ could lead to a situation where ‘edge’ could come into play.
c. The potential to replicate 30 analyst efforts / wisdom of crowds, is AI creating a ‘Sparring bot’ for an investor / investing team (agent bot or even an “Agentic Mr. Market” - if we extended Guru Graham’s metaphor)
d. AI thinker @Balajis put it succinctly - “AI does it middle-to-middle”. He calls for prompting (pre)and verification(post) as the key. From the POV, the big ‘J’ judgement is the verification.
e. The pre-mortem is a ‘scaled’ version of Mr. Munger’s Inversion principle. Helps bring the adjacency of these 2 concepts.
f. The reference to ‘knowledge that builds up over time that you can’t even articulate how it manifests’ - I believe AI is setting the stage for faster / accelerated evolution through the bottom 3 levels in the hierarchy of competence, while simultaneously putting a premium on bringing into play the big “J” the unconscious competence (judgement).
Great read. The BAIT framework does a great job breaking down how one should think about edge. I liked how you connected AI to real-world investing challenges, sticking to process, sizing positions, and running premortems. Curious, where do you think AI will have the biggest impact on active management over the next 3-5 years?
He is an excellent writer.
Reading his book “More Than You Know” helped land me my first role in financial sales many many years ago.
Thanks a lot for this POV. Here are my reflections:
a. BAI were defined by Bill Miller already, adding T and making it ‘BAIT’, helps.
b. Liked the concept of ‘attention’ (from Informational edge) via Nvidia illustration - for me that creates an ‘event’, that leads to re-pricing, both ways. The ‘event’ could lead to a situation where ‘edge’ could come into play.
c. The potential to replicate 30 analyst efforts / wisdom of crowds, is AI creating a ‘Sparring bot’ for an investor / investing team (agent bot or even an “Agentic Mr. Market” - if we extended Guru Graham’s metaphor)
d. AI thinker @Balajis put it succinctly - “AI does it middle-to-middle”. He calls for prompting (pre)and verification(post) as the key. From the POV, the big ‘J’ judgement is the verification.
e. The pre-mortem is a ‘scaled’ version of Mr. Munger’s Inversion principle. Helps bring the adjacency of these 2 concepts.
f. The reference to ‘knowledge that builds up over time that you can’t even articulate how it manifests’ - I believe AI is setting the stage for faster / accelerated evolution through the bottom 3 levels in the hierarchy of competence, while simultaneously putting a premium on bringing into play the big “J” the unconscious competence (judgement).
Thanks again for the discussion /POV.
Great read. The BAIT framework does a great job breaking down how one should think about edge. I liked how you connected AI to real-world investing challenges, sticking to process, sizing positions, and running premortems. Curious, where do you think AI will have the biggest impact on active management over the next 3-5 years?