YouSaid · the spoken record

Richard Craib

lines on the record
98
first
2021-02-07
most recent
2021-02-07
sittings or episodes
1
sources
podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

  1. “So, I mean, one thing is, yeah, so Wall Street bets, these kinds of like, these kinds of attacks, like, it's not possible to model numerized data and then come up with the idea from the model, let's short squeeze GameStop. It's not even framed in that way. It's not like possible to have that idea. But it is possible for kind of a bunch of humans. So I think Numeri could get very powerful. Without it being dangerous. But Wall Street bets needs to get a little bit more powerful, and it'll be pretty dangerous”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Know, well, these systems could be tricky. So actually, I once met a hedge fund manager. This is kind of interesting. He said a very famous one. And he said, we can see sometimes we can see things in the market where we know we can make money, but it will mesh it up. We know we can make money, but it will mess things up. And we choose not to do those things. And on the one hand, maybe this is like, oh, you're being super arrogant. Of course, you can't do this, but maybe he can. And maybe he really isn't. Doing things he knows he could do but would change, you know, be pretty bad. Would the Reddit army have that kind of morality or concern for what they're doing? Probably not, based on what we've seen.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “And the man Wall Street would never have been able to, they would still be short squeezing. One day after the next, every single hedge fund collapsing.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “That's fascinating. Yeah, there's nothing to stop people. In fact, we've opened sourced the code we use for staking in a protocol we call erasure. And if Reddit wanted to, they could even use that code to have enable staking on our Wall Street bets. And they're actually researching now. They've had some Ethereum grants on how could they have more crypto stuff in there in Ethereum? Because wouldn't that be interesting? Like imagine you could, instead of seeing a screenshot, like, guys, I promise, I will not sell my GameStop. We're just going to go huge. We're not going to sell at all. And here is a smart contract, which no one in the world, including me, can undo that says I have staked millions against. This claim.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “So, the incentives, like you say, it's about making these perfect incentives so that you can have coordination to solve one problem. And nowadays I sleep easy because I have less money in my own hedge fund. Then our users are staking. On their models”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Staking was our solution to could we make it so that we could trust, we could know which model people believed in the most and we could weight models that had high stake more and effectively coordinate this group of people to be like well actually there's no incentive to creating bot accounts anymore. Either I stake my accounts, in which case I should believe in them, because I could lose my stake, or I don't. And that's a very powerful thing, that having a negative incentive and a positive incentive can make things a lot better. And staking is like this really nice key thing about blockchains. It's like something special you can do where they're not even trusting us with their stake in some ways. They're trusting the blockchain, right?”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “This is why the Wall Street Beth story is so interesting to me because it's like feels like connected And looking at how just looking at the form of Wall Street bets, I was talking earlier about how can you make credible claims? You're anonymous. Okay, well, maybe you can take a screenshot. Or maybe you can upvote someone. Maybe you can have karma on Reddit. And those kinds of things make this emerging thing possible. Numeri. didn't work at all when we started. It didn't work at all. Why? People made multiple accounts, they made really random models and hoped.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Exactly. But there's also the biggest one is it's non-stationary time series. We've tried to regularize the data so you can find patterns by doing certain things to the features and the target. But ultimately, you're in a space where you don't, there's no guarantees that the add of sample distributions will conform to any of the training data. every single era, which we call on the website, like every single era in the data, which is sort of showing you the order of the time, it's even the draining data has these same dislocations. And so, yeah, and then there's so many things that might You might want to try this unlimited possible number of models, right? And so By having it be open, we can at least search that space.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Purpose. So, if you can find something that works on numeri, you really have something that is like working on the real stock market.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “And I think what's important difference with something like a Kaggle competition, where they'll set up this kind of toy problem, and then they will be out of sample test like, hey, you did well out of sample. And this is like, okay, cool. But what's cool with Nimraise, the out of sample is the real live stock market. We don't even know like we don't know the answer to the problem. You'll have to find out live. And so we've had users who've submitted every week for like four years because it's kind of we say it's the hardest data science problem on the planet, right? And that sense maybe sounds like maybe a bit too much for like a marketing thing, but it's the hardest because it's the stock market. It's like literally there are like billions of dollars at stake and like no one's letting it be inefficient.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, I think, first of all, you want to talk to the community. People are pretty open. We give out really interesting scripts and ideas for things you might want to try. But you're also going to need a lot of compute, probably. And so some of the best users are, you know, actually the very first time someone won on Numerai, I wrote them a personal email. It's like, you know, you've won some money. We're so excited to give you $300. And then they said, I spend way more on the compute. But”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “And it's like, yeah, yeah, you need to put some money down to show us you believe in your model. But weirdly, we're not selling you the, like, you can't buy the cryptocurrency from us. It's like it's also, we never, if you do badly, we destroy your cryptocurrency. That's not good, right? You don't want it to be destroyed. But what's good about it is it's also not coming to us. So it's not like we win when you lose or something. Like we're the house. Like, we're definitely on the same team. You're helping us make a hedge fund that's never been done before.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Yeah, so you don't have to stake. You can start without staking. And many users might try for months without staking anything at all to see if their model works on the real life data, right? And is not overfit. But then you can get numer many different ways. You can buy it on Coinbase. You can buy some on Uniswap. You can buy some on Binance.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “What some users do is they set up a compute server we call Numeri Compute. It's like a little AWS kind of image. And you can automate this process. So we can ping you. We can be like, we need more predictions now. And then you send it to us.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “We want you to keep your baby Frankenstein at home and take care of it. We don't want it So you never upload your model to us. You always only giving us predictions. So we never see the code that wrote your model, which is pretty cool. That our whole hedge fund is built from models where we've never ever seen the code. But it's important for the users because it's their IP. They want to give it to us.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Well, you can go to numera.ai, sign up, download the data. And on the data is pretty small. In the data pack you download, there's like an example script, Python script, that just builds a XGBoost model very quickly from the data. And so in a very short time, you can have an example model.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, well, if you do make yourself super exposed to one or two features, you can have a lot of volatility when you're playing Numerai. You could maybe very rapidly rise to be high if you were getting lucky. And that's a bit like the stock market. Sure, take on massive risk exposure, put all your money into one stock, and you might make a hundred percent. But it doesn't in the long run work out very well. And so the best users are trying to stay high for as long as possible and not necessarily try to be first for a little bit.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Why would you reduce your exposure to thing that's helping your model the most? And that's actually this counterintuitive thing you have to do with machine learning on financial data.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “So if you train a model, it would say put all your money in stech. It's super good. What you want to do is actually be very careful of how much of the exposure you have to certain features. So on Numerai, what a lot of people figure out is actually if you train a model on this kind of data, you want to somehow neutralize or minimize your exposure to these certain features, which is unusual because if you did train a stoplight or stop street detection on computer vision, your favorite feature, let's say you could and you have an auto encoder and it's figuring out, okay, it's got to be red and it's got to be white, that's the last thing you want to be, you want to reduce your exposure to.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “There definitely something pretty. Hundredth in the competition in the tournament. Maybe you would try to use that. But what's particularly interesting about the problem that not many people understand, if you're familiar with machine learning, this typically will surprise you when you model our data. One of the things that you look at in finance is you don't want to be too exposed to any one risk. Like even if the best sector in the world to invest in over the last 10 years was tech, does not mean you should put all of your money into tech.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “How much of the cryptocurrency that they're putting behind their models? So they're saying, I believe in my model. You can trust me because I'm going to put skin in the game. And so we can take the stake-weighted predictions from all our users, add those together, average those together, and that's a much better model than any one model in the sum. Because ensembling a lot of models together is kind of the key thing you need to do in investing to.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “So, the first thing is we could obviously model that data in house, right? We can make an XG boost model on the data. And that would be quite good too. But what we're trying to do is by opening it up and letting anybody participate, we can do quite a lot better than if we modeled it ourselves. And a lot better on the stock market doesn't need to be very much. Like, it really matters the difference between if you can make 10 and 12 percent in an equity market neutral hedge fund, because the whole, usually you're charging 2% fees. So if you can do 2% better, that's like all your fees, it's worth it. So we're trying to make sure that we always have the best possible model as new machine learning libraries come out, new techniques come out. automatically synthesized like if there's a great paper on supervised learning”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Yeah, so our predictions are also not that short. We're not really caring about things like order books and tech data, not high frequency at all. We're actually holding things for quite a bit longer. So our prediction time horizon is about one month. We end up holding stocks for maybe like three or four months. So I kind of believe that's a little bit more like investing than kind of plumbing. to go long a stock that's mispriced on one exchange and shorter on another exchange that's just arbitrage. But what we're trying to do is really know something more about the longer term future of the stock.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “We were really focused on stock data that's specific to stocks. So things like you can have every stock has like a PE ratio. For some stocks, it's not as meaningful, but every stock has that. Every stock has one year momentum, how much they went up in the last year. But those are very common factors. But we try to get lots and lots of those factors that we have for many, many years, like 15, 20 years history. And then the setup of the problem is commonly in quant called like cross-sectional global equity. You're not really trying to say, I want, I believe the stock will go up. You're trying to say relative position of this stock in feature space makes it not a bad buy in a portfolio.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “So we are buying data from lots of different data vendors. And they would also never want us to share that data. So we have strict contracts with them. So we only can, but it's the kind of data you could never buy yourself unless you had maybe a million dollars a year of budget to buy data. So what's happened with the hedge fund industry is you have a lot of talented people who used to be able to trade and still can trade, but now they have such a data disadvantage it would never make sense for them to trade themselves. But Numeri, by giving away this obfuscated data, we can give them a really, really high quality data set that would otherwise be very expensive. And they can use whatever new machine learning technique they want to find patterns in that data that we can use in our head.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “So Nimurai is the first hedge fund that gives away all of its data. So this is probably the last thing a hedge fund will do, right? Why would we give away a data? It's like giving away your edge. But the reason we do it is because we're looking for people to model our data. And the way we do it is by obfuscating the data. So when you look at numerized data that you can download for free, it just looks like a million rows of numbers between zero and one and you have no idea what the columns mean. But you do know that if you're good at machine learning or have done regressions before, you know that I can still find patents in this data even though I don't know.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Think Mark Zuckerberg had that too when he was younger. And somebody said, You got to be more professional, man. You can't say lol to an interview. And then suddenly he became like this distant person that was hot. Like you'd rather have him make mistakes but be honest. than be like professional never make mistakes”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “Yeah. I was like, what is this? This guy's like, what is he? 30? And I'm like, this is weird But I think maybe that's also what I like about Elon's kind of influence on American business is like he's super anti the professional. Why say a hundred words about nothing? And so I liked how he was cutting in and saying, Vlad, what do you mean? Spill the beans, bro.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “I was very excited to see Vlad's response. I mean, it's pretty cool to have him talk to Elon. And one of the things that struck me in the first few seconds of Vlad speaking was like, I was like. Is Vlad like a boomer? But here we are. He seemed like a 55-year-old man talking to a 20-year-old. Elon was like the 20 And he's like the 55 year old man. You can see why Citadel are NMR buddies, right? Like you can. You can see why it's like this is a nice, it's not a bad thing. It's like he's like, he's got a respectable professional attitude.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “Yeah, they're good. Yeah, you really wouldn't want to. Because hedge funds are kind of like picking up, they're making liquidity, right? In stocks. And so if you love venture capitalists, Investing in new technology, so good. You have to also kind of like hedge funds because they're the reason venture capitalists exist because their companies can have a liquidity event when they go to the public markets. So it's kind of essential that we have them. There are many different kinds of them. I believe we could maybe get away with only having an AI hedge fund and we don't necessarily need these evil billions type hedge funds that make the media and try to kill companies. But we definitely need hedge funds.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “Yeah, a thing I like to tell people if they hate hedge funds is I don't think you want to rerun American economic history without hedge funds”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “So suddenly, like all the good companies, all the ones that the hedge funds like are coming down and all the ones that the hedge funds hate are going up. In a cascading way. So I believe that if you could have had a few more days of GameStock doubling, AMC doubling, you would have had more and more hedge fund deleveraging.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “Well, you wouldn't have needed very many more days of that kind of chaos to hurt. Hedge funds. I think it's underrated how damaging it could have been. Because when your shorts go up, your collateral requirements for them go up. Similar to Robinhood, like we have a prime broker that says said to us, you need to put up, you know, like $40 per hundred dollars of short exposure. And then the next day they said, actually, you have to put up all of it 100%. And we were like, what? But if that happens to all the short, all the commonly held hedge fund shorts, because they're all kind of holding the same things. If that happens, not only do you have to Cover the short Which means you're buying the bad companies. You need to sell your good companies in order to cover the short.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “A meme stock is kind of a new term for these stocks that catch memetic momentum on Reddit. And so the meme stocks were GameStop, the biggest one, GameStonk, as Elon calls it, AMC. And Blackberry was won. Nokia was one. So these are high short interest stocks as well. So these are targeted stocks. Some people say, oh, isn't it adorable that these people are investing money in these companies that are nostalgic? It's like you go into the AMC movie theater. It's like nostalgic. It's like, no, that's not why they're doing it. It's that they had a lot of short interest. That was the main thing. And so there were highest chance of short squeeze.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “How bad would it have gotten for hedge funds? How much more damage could it have been done if the momentum of these short squeezes could continue? What happens when there are short squeezes even if they're in a few stocks, they affect kind of all the other shorts too. And suddenly brokers are saying things like, you need to put up more collateral So we had a It wasn't GameStop luckily. It was BlackBerry. And it went up like 100% in a day. It was one of these meme stocks, super bad company. The AIs don't like it, okay? The AIs think it's going down.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “But we shorting them not to make them go, we don't even want them to go down necessarily. That doesn't sound a bit strange that I say that. Just want them to not go up as much as our lungs. So by shorting a little bit, we can actually go long more in the things we do believe in. So when we were going long in Tesla, we could do it with more money than we had because we would borrow from banks who would lend us money because we had Long's Anshorts, because we didn't have market exposure, didn't have market risk. And so I think that's a good thing because that means we can short the oil companies and go long Tesla and make the future come forward faster. And I do think that's not a bad thing.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “I do think that the two kinds of shorting evil shorting? Chill short Evil shorting is what Melvin Capital was doing. And it's like you put a huge position down, you get all your buddies to also short it, and you start making press and trying to bring this company down. And I don't think in some cases you go out after like fraudulent companies say, this company is a fraud, maybe that's okay. But they weren't even saying Games up. They're just saying it's a bad company and we're going to bring it to the ground, bring it to its knees. A quant fund like Numeri, we always have lots of positions and we never have a position that's like more than 1% of our fund. So we actually have right now 250 shorts. I don't know any of them except for one because it was one of the meme stocks.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “Yeah, it certainly makes you think twice about shorting. It certainly makes you think twice about putting a lot of money into a short.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “This was probably no, this was a few days ago. Yeah, it was like maybe. Maybe two weeks ago, or something. So it was already high game stuff, but it was just strange to me that there was someone telling me at a party how to trade stocks who was like 21 years old and started to look into it. And he did make, he made it, yeah, he made 140% in one day. He was right. And now he's supercharged. He's a little bit wealthier. And now he's going to wait for the next thing and this decentralized entity is just going to get bigger and bigger.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “Yeah, exactly. The reason I found out, I've known about Wall Street bets for a while, but the reason I found out about GameStop was just I met somebody at a party who told me about it, and he was like 21 years old, and he's like, it's going to go up 100% in the next one day.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “Think it does, yeah. You definitely need to let people. One of the things that people have compared it to is the Occupy Wall Street, which is let's say some very sincere liberals like 23 years old, whatever, and they go out with signs and they have some kind of case to make. But this isn't sincere, really. It's like a little bit more nihilistic, a little bit more YOLO. And therefore, a little bit more scary. Because who's scared of the Wall Street Occupy Wall Street people with the science? Nobody. These hedge funds really are scared. I was scared of the Wall Street Bets people. I'm still scared of them.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “Well, yeah, the cool thing is they weren't doing anything. The Reddit people weren't doing anything exotic. It was a creative trade, but it wasn't exotic. It wasn't just buying the stock. Okay, maybe they bought some options too, but it was the hedge fund that was doing the exotic thing. So I like that. It's hard to say, well, you know, we've got together and we put all our money together. And now there's a company out there that's worth more. Wrong with that, yeah, right, but it doesn't talk about the motivations, which is, and then we destroyed some hedge funds in the process.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “It's a zero sum game. If someone's already shorted a stock and you can make them short squeeze, it's actually a positive sum game. So yes, some redditors will make a lot of money, some will lose a lot, but actually the whole group will make money. And that's really why it was such a clever thing for them to do.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “Really, that if you are a hedge fund and you take a big short position in a company, there's a certain level at which you can't sustain holding that position. There's no limit to how high a stock can go, but there is a limit to how low it can go, right? So if you short something, you have infinite loss potential. And if the stock doubles overnight, like GameStop did, you're putting a lot of stress on that hedge fund. And that hedge fund manager might have to say, you know what, I have to get out of the trade. And the only way to get out is to buy the bad stock that they don't want. Like they believe will go down. It's an interesting situation, particularly because it's not zero sum. If you say, let's all get together and make a bubble in watermelons, you buy a bunch of watermelons, the price goes up, comes down again.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “Exactly. What was strange with this one? It wasn't just Let's All Buy Tesla. We love Elon. We loved Tesla. Let's all buy Tesla because that we've heard before, right? Everybody likes Tesla. Now they do. So what they did with this in this case, they're buying a stock that was bad. They're buying it because it was bad. And that's really weird because that's a little bit too Galaxy brain for a decentralized community. How did they come up with it? How do they know that was the right one? And the reason they liked it is because it had really, really high short interest. It had been shorted more than its own float, I believe. And so they figured out that if they all bought this bad stock, they could short squeeze some hedge funds. And those hedge funds would have to capitulate and buy. Stock at really, really high prices”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “No contract. The users are anonymous. But they are little things that do help. So, for example, if you've posted a really good investment idea in the past, that exists on Reddit as well. And it might have lots of upvotes. And that's also kind of like giving credibility to your next thing. And then they are also putting up screenshots like this is the trades I've made and here's a screenshot. Now you could fake the screenshot, but still, it seems like if you've got a lot of karma and you've had a good performance on the community, it somehow becomes credible enough for other people to be like, you know what? He actually probably did put a million dollars into this. And you know what? I can follow that trade easily.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “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 Valley is one of them.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “Think it's amazing. It's like my favorite story ever. Like when I was reading about it, I was like, this is the best. And it's also, you know, connected with my company, which we can talk about. But what I liked about it is like, I like decentralized coordination and looking at the mechanisms that these are 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.”

    2021-02-07 · Lex Fridman Podcast · #159 – Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading · IDENTIFIED FROM THE TRANSCRIPT · source