Byrne Hobart
Longreads
- Jack Despain Zhou and Lillian Tara: Schools Should Pursue Excellence . A good piece arguing that schools have gone too far towards detracking and ought to admit that not every student has identical interests or abilities—and that educational inequality can mean giving brilliant people more time to contribute to society. In the long run, the impact of education on success is very noisy at an individual level, but someone of an average life expectancy who attends K-12 and then gets a four-year degree will spend a little over one fifth of their life in school, so the school years themselves are a material chunk of the "long term" in question! It's easier to see why detracking is so odd if you look at it in a broader context. I haven't been in formal schooling since my early twenties, and not once since then have I ever been told that I need to listen to a lecture on something I already know, or read a book I've already read, purely because of the year on my birth certificate. This simply does not exist in the adult world, and nobody runs their life this way (unless they're subject to particular union or occupational licensing rules). Tracking by age is very convenient for information-starved bureaucracies, but if student performance is being tracked electronically, there's no excuse but inertia.
- Jonathan Franklin writes in Bloomberg about car theft rings. Theft is a bit like natural resource extraction, where sometimes an incredible level of inefficiency, graft, and regulatory burden is tolerable. It's also sensitive to technological shocks: the auto theft business has been in a technology-driven bull market lately, since techniques for stealing cars have proliferated online, and it's easier for buyers to communicate their preferences (just like this classic study on how introducing mobile phone service in Kerala reduced fluctuations in fish prices). As with many other industry inflection points, a benign regulatory environment helps: "By mid-2024[, one prolific twelve-year-old car thief] had been arrested 22 times. A 2022 Maryland judicial reform stipulated that children under the age of 13 can’t be charged with property crimes, so the police returned the boy to the custody of his parents."
- D.E. Shaw on using optimizers to turn stock picks (or other ideas) into an optimal portfolio. This piece is good on an object level, particularly on some of the points it makes about how counterintuitive portfolio construction can be. But it's also good in the meta sense that over time, much more of your life is going to be run by either software tools like this that you use, or tools that somebody else uses to decide what an app should suggest that you do. If you look at an algorithmic feed, log into a service like Netflix, order something online, etc., you're already interacting with something that's trying to optimize your behavior (maximize your engagement) based on a portfolio of users, and it's good to have intuitions about how this works. Via @0xFaust12
- Dwarkesh Patel interviews Jeff Dean and Noam Shazeer. Self-recommending: one of the tradeoffs people face in any kind of knowledge work is between getting very good at one specific domain and having broad knowledge of everything adjacent to it. One hack is to spend a long enough time in a given field that the things that used to be concrete have turned into abstractions, but they're abstractions that you deeply understand. (In finance, there's a surprising degree of skill transfer between yelling on the trading floor a generation ago and running a sophisticated automated market-making operation today.) The interview is also fun because of the bits where the two interviewees suddenly switch into cooking-up-a-new-project mode—maybe one thing that makes organizations effective is the ability to create and sustain a shared state of flow. And the piece has a very good anecdote about career happiness. When they're asked what their favorite time working at Google was, they both have the same answer: a tie between right at the beginning, and right now.
- Brian Potter has an energy cheat sheet. It's very hard to have intuitions about relative energy consumption, especially living in such an energy-abundant world: "1 gallon of gas stores more energy than 2 weeks worth of food. The energy in a barrel of oil is only slightly less than what’s required to move a multi-ton shipping container thousands of miles across the ocean and more than what’s in a ton of TNT." And some assumptions about energy are at least a bit politicized; air conditioning is more of a US than a European thing, for reasons that have a lot to do with latitude. But heating, rather than cooling, is the big driver of household energy consumption. Despite the climate and geopolitical externalities, drilling deep beneath the earth's surface to extract liquified or gaseous homeostasis is still an amazing accomplishment.
- In this week's issue of Capital Gains, we look at the limits to financial engineering. If you're dealing with knowns, or known-unknowns, you can always find a financial structure that gives everyone the exact slice of risk/return that they want. But when it comes to unknown-unknowns—will this drug cure cancer? Will this AI fix everything? Will people really rent DVDs by mail?—it's usually the simplest financial structures that work best.
- And in this week's episode of The Riff, we're talking about how to use Deep Research, how to understand Elon's offer for OpenAI, and why a US sovereign wealth fund doesn't make all that much sense. Listen with Spotify/Apple/YouTube.
The Diff’s trade/investment-pitching contest is coming up soon. If you’re interested, please sign up here, and let us know if you’re part of a group that would like to participate. We’re aiming to finish the contest in late March and would like to get a finalized list of participants over the next week.
And, as a reminder, The Diff has an associated AngelList syndicate, which includes deals sourced through the newsletter.
Open Thread
- Drop in any links or comments of interest to Diff readers.
- To the extent that reshoring is real, it’s going to include some of the same leapfrogging that makes developing markets grow so quickly. What are some cases where China’s supply chain has prematurely optimized, and where a new US-based (or US-friendly) replacement can avoid the same mistakes?
Diff Jobs
Companies in the Diff network are actively looking for talent. See a sampling of current open roles below:
- A premier proprietary trading firm is looking for smart generalists to join their investor relations team, working with external investors, rating agencies, and the internal finance team. Investment banking and/or investor relations experience preferred. Quantitative background and technical aptitude a plus. (NYC)
- Ex-Ramp founder and team are hiring a high energy full-stack engineer to help build the automation layer for the US healthcare payor-provider eco-system. (NYC)
- An OpenAI backed startup that’s applying advanced reasoning techniques to reinvent investment analysis from first principles and build the IDE for financial research is looking for software engineers and a fundamental analyst. Experience at a Tiger Cub a plus. (NYC)
- A hyper-growth startup that’s turning customers’ sales and marketing data into revenue is looking for a forward deployed engineer who is excited to work closely with customers to make the product valuable for them. (SF, NYC)
- A growing pod at a multi-manager platform is looking for new quantitative researchers, no prior finance experience necessary, 250k+ (NYC)
Even if you don't see an exact match for your skills and interests right now, we're happy to talk early so we can let you know if a good opportunity comes up.
If you’re at a company that's looking for talent, we should talk! Diff Jobs works with companies across fintech, hard tech, consumer software, enterprise software, and other areas—any company where finding unusually effective people is a top priority.