More Money Stuff
July 14, 2025 - Money Stuff: Musk Has Money and xAI Wants Some
The Musk Mars Conglomerate
What is the point of investing in Tesla, if not to also invest in xAI or whatever else Elon Musk is cooking up?
Pest Control Stuff
Wharton MBA to packaging Pest Control
But in our modern superstar economy, it is hard to attract fancy business-school graduates to work for pest-control companies in Missouri. “I am using my Wharton MBA to get into pest control”: No, bad, not prestigious. But “search funds” (and, more broadly, “private equity”) are a more prestigious rebranding of “pest control.” “I am using my Wharton MBA to raise a private fund to go out and do a leveraged acquisition of a business with strong cash flows and use that as a platform to roll up an industry”: Yes, good, now we are cooking. And if the business is pest control that’s fine!
July 15, 2025 - Money Stuff: Put the Crypto in the Index Funds
Vanguard Strategy
Exposure to crypto via Index funds
But the simplest and laziest way to get sort-of-index-ish exposure to crypto is to own the total US stock market, because the stock market now includes an ever-growing supply of crypto treasury companies. You might not want crypto in your stock index fund — Vanguard doesn’t want crypto in its stock index funds — but the whole point of an index fund is that you don’t want to invest in what you want! (Or in what a fund manager wants.) You don’t trust yourself (or your fund manager) to want the right things. You want to invest in what the market wants, and what the market wants is crypto.
AI for quants
There was a post long time ago by Matt something along the lines of "What would you do if you have the knowledge of entire world populations needs, what's on their mind, what are they thinking about, ..." in reference to Google, the answer is sell Ads. This sounded very profound, on some level over simplified, but probably not far off from actual reality. Like many Money Stuff themes, this tech industry as a Ad Serving enterprise comes up frequently as well. Here's the latest installment but in the wake of AI battles in Tech.
The most important modern meta-skill is statistical inference with computers. If you can cause a computer to look at a big pile of data and use it to make predictions, there are many things you can do with that skill. You can, for instance, advance humanity’s understanding of distant galaxies. In some ways that is the paradigmatic use case; people who hire machine learning researchers love to hire astrophysics PhDs.[4] In other ways, it is not the paradigmatic use case, because it is extremely difficult to make money by advancing humanity’s understanding of distant galaxies. Neil deGrasse Tyson seems to do well, but otherwise it’s a pretty small market. There are other, more lucrative use cases. If you can train a computer on a pile of data about soccer or hockey, and then use it to predict which young prospects will become good soccer or hockey players, that is a skill worth many, many millions of dollars, and so we talk from time to time around here about soccer and hockey astrophysicists. But even that is small potatoes compared to the big three, each of which is worth many hundreds of billions of dollars:
- Training a computer to predict which advertisements to show to people online.
- Training a computer to predict which stocks will go up.
- Training a computer to predict the best next word in an essay, or the next pixel in a picture.
These are normally called “big tech,” “quant finance” and “AI labs,” respectively, though all of those labels are somewhat loose.
OpenAI hiring all the quants:
I feel like there was a period where big tech could out-compete quant finance for astrophysicists, because big tech could say “we are changing the world, while quant finance is just moving money around.” And then everyone figured out that big tech was just “optimizing ads.” But now we are still in the honeymoon period for AI, so AI labs can out-compete quant finance by saying “we are changing the world, while quant finance is just moving money around.” In two years you’ll be like “optimizing engagement for ChatGPT gets boring,” or “optimizing universal surveillance for our AI overlords gets boring,” but for now it is world-changing and exciting. Also though the money is better
July 17, 2025 - Money Stuff: Everyone Wants a Bitcoin Treasury
Resumes
Your AI writes the résumé, their AI reads it, and if your AIs come to an agreement then maybe you can meet in person.