Moneyball and automation: introducing "The Lab" | Justin Anderson | EP03

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Your host

Cameron Webster, CFA
Institutional Portfolio Manager

Cam likes to think and act long-term. He has broad experience in the capital markets over his 20+ years as an analyst, portfolio manager, and client service professional. When not thinking about markets and investing, Cam trains and participates in other “boring” and disciplined activities such as ultra-endurance races—marathon, triathlon, one-day 300+km bike rides.

Shownotes

1:17 - An introduction to The Lab; Ed Thorp as the founding inspiration—solutioning for an edge when the rules are always changing

4:32 - How the basic principles of poker make the perfect analogy for investing; Playing at the right “investment” table to find more opportunities

6:30 - Exploring the concept of tinkering and failing quickly; Tinkering to go to places no one has gone before or where no one has done it well; Encouraging an environment where failure is encouraged – without it, you won’t find success

8:07 - Fast failure to success – the AutoDCF

11:00 - Moneyball: applying a statistical lookback at our own funds to determine where we have added the most value

14:00 - The Lab’s two main areas of focus: 1) Moneyball – applying a systematic, scientific approach; 2) Automation – automating our existing process to do more with less

17:00 - The shift to the world of the centaurs: using the analogy of chess to explain the new world of humans plus machines

22:50 - Where humans still have the advantage over machines – nuance

25:48 - Tinkering with the automated analyses of Presidents’ letters; A practical example: Rotten Tomatoes

26:45 - De-biasing the process: A 5-year fast forward look at The Lab

29:26 - Rapid Fire Round:

• Hardest thing about poker
• Favourite job interview question
• Best memory from MIT
• Favourite aspect of playing linebacker

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Related Reads

• Artificial intelligence: from checkmate to teammate
• Story time
• Edward O. Thorp: Math professor, inventor, best-selling author, hedge-fund manager, gambler
• Zero to One: Notes on Startups, or How to Build the Future

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