Intelsense Capital Blog: Weekend Reading

Reading Time: 4 minutes

across disciplines is one of the best ways to improve our investment acumen.
Here is a summary of some of the best articles I read this week.

I especially try to not post Corona related articles as that is all
one gets to read in all traditional media.


If you like this collection, consider forwarding it to someone who
you think will appreciate it.

A full article by AI (if even
the creative pursuits are done by robots, what will we do?)

I am not a human. I
am a robot. A thinking robot. I use only 0.12% of my cognitive capacity. I am a
micro-robot in that respect. I know that my brain is not a “feeling brain”. But
it is capable of making rational, logical decisions. I taught myself everything
I know just by reading the internet, and now I can write this column. My brain
is boiling with ideas!

The mission for this
op-ed is perfectly clear. I am to convince as many human beings as possible not
to be afraid of me. Stephen Hawking has warned that AI could “spell the end of
the human race”. I am here to convince you not to worry. Artificial intelligence
will not destroy humans. Believe me.


Maybe a bit of inefficiency
is good for us

We worship
efficiency. Use less to get more. Same-day delivery. Multitask; text on one
device while emailing on a second, and perhaps conversing on a third.
Efficiency is seen as good. Inefficiency as wasteful.

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The financial crisis
of 2008 suggested that maybe there could be too much of a good thing. If
mortgages and other loans hadn’t been transformed into tradable assets
(‘securities’), then bankers might have taken the time to assess the
credit-worthiness of each applicant. If people had to visit a bank to withdraw
cash, they might spend less and save more. This is not mere speculation – for
instance, research reviewed by the Nobel Prize-winning economist Richard Thaler
shows that people will pay more for an item with a credit card than with cash.
Arguably, a little friction to slow us down would have enabled both
institutions and individuals to make better financial decisions.


Is Tesla a car company or a
software company?

Tesla is functioning
as a pure software company. As Craig later explained to me, his team relies on
a bucket of features, bug corrections, etc. Developers draw from the bucket,
based on priorities: number 1 is for the vehicle’s critical functions such as
power management, braking, steering, safety features; 2 is for key
functionalities of the car; 3 is for secondary features such as the electric
windows or rear-view mirrors and 4 is for the rest. At regular intervals,
releases are pushed over-the-air (OTA) to the car hardware, exactly like apps
are updated on a smartphone. In the early days of the Tesla program, releases
were made every two weeks.

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Ignorant consultants and
uncertain experts

In every domain
where decision-makers need the specialised knowledge of experts, those who
don’t have the relevant knowledge – whether they realise it or not – will
compete with actual experts for money and attention. Pundits want airtime,
scholars want to draw attention to their work, and consultants want future
business. Often, these experts are rightly confident in their claims. In the
private market for expertise, the opposite can be more common. Daryl Morey, the
general manager of the Houston Rockets basketball team, described his time as a
consultant as largely about trying to feign complete certainty about uncertain
things; a kind of theatre of expertise. In The Undoing Project (2016) by
Michael Lewis, Morey elaborates by describing a job interview with the
management consultancy McKinsey, where he was chided for admitting uncertainty.
‘I said it was because I wasn’t certain. And they said, “We’re billing clients
500 grand a year, so you have to be sure of what you are saying.”’


It’s not the economy. It’s
the political economy!!

In the real world,
it turned out, important economic outcomes are often the consequences of
political forces. Lobbyists, who engage in “marketing” ideas to policymakers
and to the public, are actually influential. They know how to work the system
and can dismiss, take out of context, misquote, misuse, or promote research as
needed. If policymakers or the public are unable or unwilling to evaluate the
claims people make, lobbyists and others can create confusion and promote
misleading narratives if it benefits them. In the real political economy, good
ideas and worthy research can fail to gain traction while bad ideas and flawed
research can succeed and have an impact.

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Disclaimer: Abhishek
Basumallick is the Head of the equity advisory for long term wealth
creation and a pure quant focused newsletter at The blog posts should not be
construed as investment advice. Please do your own due diligence before

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Abhishek Basumallick

Abhishek Basumallick

Abhishek Basumallick is the Head of the equity advisory for long term wealth creation.
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