Anything Professor Sanjay Bakshi writes is always an insightful read
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François Chollet on Compression vs Intelligence:
While intelligence leverages compression in important ways in representation learning, intelligence and compression are by nature opposite in key aspects.
Because intelligence is all about generalization to future data (out of distribution) while compression is all about efficiently fitting the distribution of past data. If youâre optimal at the latter, youâre terrible at the former.
If you were an optimal compression algorithm, the behavior policy you would develop during the first 10 years of your life (maximizing your extrinsic rewards such as candy intake, while forgetting all information that appears useless as per past rewards) would be entirely inadequate to handle the next 10.
Intelligence is about generating adequate behavior in the presence of high uncertainty and constant change. If you could have full information and if your environment were static, then there would be no need for intelligence â instead, compression would give you an optimal solution to the problem of behavior generation. Evolution would simply find the optimal behavior policy for your species and would encode it in your genes, in a compressed, optimally efficient form.
But thatâs not our reality. And thatâs why intelligence had to emerge. So you can adapt to situations youâve never seen before, and that none of your ancestors has ever seen before.
The way children learn is via play, driven by intrinsic curiosity. 90% of what they learn appears entirely useless when judged through the lens of their past. But part of that useless stuff is exactly what will enable them to make sense of the future. And itâs impossible to tell in advance which part.
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Full Transcript from CNBCâs âCharlie Munger: A Life of Wit and Wisdom
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This is great. Always great insights from the guy.
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Good talk by Ian Bremmer; views on â
Risks:
- War middle east
- Possible future of Ukraine war
- Chinese economy
- US vs China
- US presidential election
- Political unrest in the US
Opportunities:
- India! Stable, great outlook, pragmatism.
- Stronger EU
- Mexico doing well
- US: AI boom, Texas leading green energy; robust economy
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Battery swap is the answer for B2C delivery
Sun Mobility Swap Point
I have been seeing âSun Mobilityâ swap points everywhere in Delhi. I never thought too much about it until yesterday.
Yesterday I heard Chetan Maini(1) (2) speak about the logic of swappable batteries, particularly for fleets focusing on intra-city deliveries. Let me lay out his argument as I understand it.
Imagine youâre Zomato or Swiggy. Youâre not just a food delivery app; youâre also managing the fleet delivering this food. Youâve got to think about delivery costs that youâll eventually need to pass on to someoneâeither the customer ordering the food or the restaurant.
Now think about Zypp or Eveez (as shown in the image above). Both are electric scooter fleet operators. They pitch to Zomato, offering to handle deliveries within a certain price range. Now, the differentiator for them is going electric. Electricity for scooters costs less than petrol, so thereâs a margin to play with here. Zypp then partners with Sun Mobility (Chetan Mainiâs company), whoâs invested heavily in batteries and swap points across the city. This setup means a Zypp rider can just swap a dying battery for a charged one as needed. This swapping happens within minutes at a Sun Mobility swap point.
Zypp can keep initial costs low by buying scooters without batteries, which are cheaper than traditional vehicles. And the per-unit electricity cost from Sun Mobility is easily covered by the delivery fees from Zomato, which in turn, gets passed on to Zomatoâs customers.
Now, letâs consider the alternative approach which Zypp can take. Zypp decides to go solo, buying a fleet of EVs with fixed batteries. They face a hefty upfront cost, the headache of managing a charging network, and the anxiety of batteries running dry or, worse, facing a defect. Itâs a fleet managerâs nightmare, considering the debt and interest payments that donât stop even when the scooters are off the road.
This is my current reading of this space. I will update as and when my thinking evolves further.
Notes:
(1) Chetan is the founder of Indiaâs first electric car Reva.
(2) Link to the chat. Start listening from 1:21:30
Disclosure: Please note that I may hold investments in the companies mentioned. I encourage you to conduct thorough due diligence before making any investment decisions.
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Swappable batteries could be an interesting idea. NitiAyog had released a policy paper on it. Can be accessed on their site:
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Not related to investing.
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Pattern Recognition Opportunities and Limits (Michael J. Mauboussin & Dan Callahan)
Interesting read.
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âJust fitting one chart to another is not research, and certainly not a basis for investment decisions. If you invest your money based on these charts, you deserve to be separated from it.â
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India at 125: Reclaiming the Lost Glory and Returning the Global Economy to the Old Normal
https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=22341
Good one
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Itâs amazing how Ben Evansâs year-end presentations are always insightful.
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Over the last 60 years, a lot of R&D has gone to bring the cost of compute down to near zero. This led to a personal device in every hand. We also have had the cost of distributing this compute down to near zero as well. That brought the marginal cost of software down to zero, which is basically the reason the internet exists. The next 30 years is going to bring the cost of intelligence down to zero.Capex & Opex supercycles â the dusk of SaaS and the dawn of AI-SaaS | by Hemant Mohapatra | Dec, 2023 | Medium
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Some anecdotes from Howard Marksâ memo Fewer Losers or More Winners
If we avoid the losers, the winners will take care of themselves.
bond investors improve their performance not through what they buy, but through what they exclude â not by finding winners, but by avoiding losers.
risk avoidance is likely to result in return avoidance. Thereâs such a thing as the risk of taking too little risk. Most people understand this intellectually, but human nature makes it hard for many to accept the idea that the willingness to live with some losses is an essential ingredient in investment success.
amateur tennis is a loserâs game: The winner is usually the person who hits the fewest losers. If you can just keep the ball in play long enough, eventually your opponent will hit it off the court or into the net
You can win by having a few winners but fewer losers or by having a lot of losers but more winners. Neither maximizing winners nor minimizing losers is necessarily enough. Itâs all in the balance.
In favor of index investing:
-The performance of the equity indices is often dominated by a few stocks or groups of stocks.
-The gains of the leaders can make them seem expensive, arguing for profit-taking.
-Human nature â especially the desire to avoid regret â adds to the motivation to sell.
-By definition, if you reduce your holdings of the winners relative to their representation in the indices and these winners continue to outperform, youâll have a tough time keeping up.
"If you look at the chart of a stock thatâs been up for 25 years and say, âMan, I wish Iâd owned that stock,â think about all the days you would have had to talk yourself out of selling.â
If alpha is the ability to earn return without taking fully commensurate risk, investors possessing it can do so by either reducing risk while giving up less return or by increasing potential return with a less-than-commensurate increase in risk.
Source: Fewer Losers, or More Winners?
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Opposing view regarding battery swapping:
It actually makes sense for commercial use, ather is mostly a premium 2W and their customers would want to own the battery whereas for commercial use the fixed asset which is the bike needs to be used for a longer time to generate sizeable returns on the asset so batter charging for 4-5 hrs or even fast charging leads to faster degradation of battery thus swapping being convenient so it does have a different use case. In fact when Ather started they wanted to make their batteries swappable to reduce the upfront cost but for a premium e2W this did not work out.
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