Wednesday, April 24, 2024

Chinese AI Regaining Some Lost Glory: SenseTime's Stock Halted In Hong Kong After Jumping As Much As 36%

Ha! We just flashed-back on SenseTime in Monday's post on the British real-time facial recognition vans and apps: ICYMI: The Most Valuable AI Start-up In the World Does Facial Recognition.

From Bloomberg, April 23/24:

China’s SenseTime Surges 36% After Unveiling a New AI Model

  • US-blacklisted firm unveils fifth version of its AI platform
  • The company is one of many racing to develop generative AI

SenseTime Group Inc.’s stock soared its most in more than two years after releasing the latest version of its SenseNova generative AI model, highlighting the intense interest surrounding China’s efforts to develop artificial intelligence.

The shares gained as much as 36% after the company revealed SenseNova 5.0 during its Tech Day event in Shanghai. The ChatGPT-like platform has “significantly” improved in terms of linguistic and creative capabilities, Chairman Xu Li said in a statement. Trading in the stock was suspended after the abrupt surge but will resume Thursday.

SenseTime is among a growing number of Chinese corporations and startups exploring ways to develop an answer to OpenAI’s ChatGPT. In 2023, it joined Baidu Inc. and Alibaba Group Holding Ltd. in developing its own inhouse generative AI platform. The potentially transformative technology has since become a key area in which Beijing is encouraging local companies to compete with their US counterparts.

The company said in a filing it was unaware of any reasons for the dramatic share price surge apart from SenseNova 5.0, which comes with about 600 billion parameters. “It achieved significant improvements in knowledge, mathematics, reasoning and coding capabilities, and its performance is generally comparable to GPT-4 Turbo,” the company said in the filing.

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iIkVKMkAduMI/v2/pidjEfPlU1QWZop3vfGKsrX.ke8XuWirGYh1PKgEw44kE/-1x-1.png

....MUCH MORE

The story at BiometricUpdate is headlined:

New LLM version boosts SenseTime stock to fraction of former price

Electric Vehicles: "Goldman Sachs says escalating price war in China’s EV market could ensnare BYD, push sector into losses"

Its a tough business.

From the South China Morning Post, April 24:

  • Overall industry profitability could become negative in 2024, if BYD introduces 10,300 yuan (US$1,421) price cut, US bank says
  • Overall profit for EVs across the board has declined from 2,100 yuan to negative 1,600 yuan since July last year: Goldman report
Further discounts offered by carmakers in a price war in mainland China’s electric vehicle (EV) market could ensnare even the likes of top seller BYD, Goldman Sachs said.

Its net profit could become zero if BYD offers another price reduction of 10,300 yuan (US$1,421) per vehicle, a fresh sign that an escalating price war in the world’s largest EV market will become detrimental to the fast-growing industry, the US bank said in a report released on Tuesday.

“If another 10,300 yuan price cut comes about (in line with our assumption for BYD), we estimate overall industry profitability could turn negative in 2024,” Goldman said. The discount would represent 7 per cent of the company’s average selling price for its vehicles, Goldman added. BYD mainly builds budget models priced from 100,000 yuan to 200,000 yuan.

Since July last year, the overall profit for EVs across the board has declined from 2,100 yuan to negative 1,600 yuan, driven by a 21,000 yuan price drop, or 11 per cent of the cars’ average selling price, the report said.

Weak interest in EVs due to concerns about a battered economy and incomes during the first quarter of this year have resulted in a wave of price cuts at key carmakers on the mainland....

"Rush for US Dollars May Be Around the Corner, Mizuho Says"

That would certainly shake things up.

From Bloomberg via yahoo Dinance, April 24:

The swaps market is flashing warnings there could be a dash for dollar liquidity on a scale last seen at the start of the pandemic, according to Mizuho International Plc.

Andra Belcea, head of cross-currency swaps trading at Mizuho, flags the cross-currency basis — a measure of the extra cost non-US banks face when sourcing dollars offshore instead of through their US-based branch.

Derived from the cost of exchanging cash flows in one currency for those in another, it shows the cost of dollars is now near the lows seen after central banks took emergency steps to pump liquidity into markets in the wake of the pandemic.

“Risky asset classes are doing great,” said Belcea. “But the market is wondering when the music will stop.”

There were tremors earlier in the month, when the situation in the Middle East threatened to escalate, triggering a jump in demand for dollars. A year ago, the collapse of Silicon Valley Bank in the US spurred a much bigger rush.

And if US rates remain lofty, US banks may allocate more dollars onshore, buying Treasury bills or parking them at the Fed’s reverse repo facility instead of lending them overseas....

....MORE

S&P Cuts San Francisco's Credit Rating Outlook From Stable To Negative

A bit behind the curve there S&P.

From the San Francisco Chronicle, April 22:

San Francisco’s post-pandemic downturn threatens city’s historically strong credit rating 

Weakness in San Francisco’s commercial real estate market and the slow-moving recovery of economic drivers such as tourism stand to jeopardize the city’s ability to repay its debt, according to S&P Global Ratings.

The financial services firm this week downgraded its outlook on the city’s outstanding general obligation and appropriation debt from “stable” to “negative.” The move comes as office vacancy in San Francisco hit a record 36.6% in the first quarter of the year, exacerbating the city’s fiscal challenges in the wake of the pandemic. 

San Francisco is projected to face a $245 million budget deficit in the coming fiscal year and a $555 million deficit in the following year. The shortfall could balloon to more than $1 billion by 2027 if expenditures continue to outpace revenue growth. 

S&P said in a release that it believes that San Francisco’s “management will be challenged to make the cuts needed to restore it to budgetary balance during the outlook horizon, which could lead to rating pressure if the city’s general fund reserves decline precipitously.”....

....MORE

Also at the Chronicle:

Empty S.F. office tower formerly valued at $62 million sold for $6.5 million

"Corporate silence on impactful trends not securities fraud, US Supreme Court rules"

 From Reuters, April 12:

Shareholders cannot sue companies for fraud if they flout a rule requiring disclosure of trends expected to affect their bottom line unless the omission makes another statement misleading, the U.S. Supreme Court ruled on Friday.

The 9-0 ruling authored by liberal Justice Sonia Sotomayor handed a victory to Macquarie Infrastructure in a proposed shareholder class action accusing the company of failing to disclose that its revenues were vulnerable to an international phase-out of high-sulfur fuel oil between 2016 and 2018.
 
The justices reversed a decision by the New York-based 2nd U.S. Circuit Court of Appeals to allow the class action brought by Hedge fund Moab Partners to proceed. A federal judge earlier had dismissed the litigation.
 
Sotomayor wrote that while the anti-fraud provision of a federal law called the Securities Act of 1933 clearly prohibits companies from telling misleading half truths, it does not automatically apply when a company remains silent....
....MUCH MORE
 
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Private Equity/Infrastructure: "Carlyle sees a cash cow in AI electricity boom"

From Semafor, April 17:

The Scoop
The private equity firm Carlyle Group is courting artificial intelligence-focused data centers as anchor customers for a series of large solar power farms it’s building in the Arizona desert.

Two years after Carlyle founded its own renewable-energy development company, Copia Power, construction is underway on its first project: a $2 billion, 1.5-gigawatt solar-and-storage project outside of Phoenix. A second, similar project is expected to break ground nearby later this year, and a third 1.5-gigawatt facility is in development for the near future. Although the customers Copia Power initially locked in are fairly routine — the local utility and the hardware chain Lowe’s — the company is now shifting its focus to target tech companies, which have emerged as the U.S. power market’s most voracious buyers of low-carbon electricity, Pooja Goyal, Carlyle’s chief investment officer for infrastructure and head of renewables, told Semafor.

“We knew there was going to be a lot of demand from corporate customers for the energy from these projects,” she said. “But we definitely did not take into account the demand pull from AI that is happening right now. That’s become a major accelerator to the original investment thesis.”....

....MUCH MORE

FTX: "Sam Bankman-Fried agrees to help FTX investors in lawsuits against Tom Brady, Larry David"

From the New York Post, April 22:

Investors in Sam Bankman-Fried’s bankrupt crypto firm FTX agreed to drop their claims against the convicted fraudster in exchange for his cooperation in lawsuits against other defendants — including celebrities Tom Brady, Gisele Bundchen and Larry David who promoted the company before its stunning collapse.

According to the settlement — filed by a group of FTX investors in Miami federal court Friday — Bankman–Fried would be free of any civil liabilities from the multi-district litigation now and in the future, according to Bloomberg.

As part of the proposed settlement, which still needs approval from a judge, Bankman-Fried has agreed to hand over all nonprivileged documents detailing his assets and his investment in Google and Amazon-backed artificial intelligence startup Anthropic, an affidavit certifying his net worth as negative and documents about other defendants in the lawsuits, Bloomberg reported.

Bankman-Fried is also set to provide the group of FTX investors with any information he can about the accountants, lawyers and venture capital firms that worked with his disgraced exchange, which collapsed in November 2022 after Bankman-Fried swiped user funds to plug an $8 billion debt at sister company Alameda Research.

NFL legend Brady, his ex-wife Gisele Bundchen and “Curb Your Enthusiasm” star David, along with Steph Curry, Shaquille O’Neill and Naomi Osaka had appeared in ads promoting FTX and are fighting lawsuits brought by shareholders....

....MUCH MORE

Prop bet: If President Biden loses his bid for re-election, Bankman-Fried and Pa Bankman and Ma Fried are on the Presidential pardon list. Any takers? 

RAND Corporation CEO On The Here-and-Now Dangers Of Artificial Intelligence

As we saw in April 14's RAND: "Artificial Intelligence and Biotechnology: Risks and Opportunities" the RAND Corporation has very deep connections to AI, going back almost seventy years.

From Wired, April 23:

A National Security Insider Does the Math on the Dangers of AI
Jason Matheny, CEO of the influential think tank Rand Corporation, says advances in AI are making it easier to learn how to build biological weapons and other tools of destruction.

Jason Matheny is a delight to speak with, provided you’re up for a lengthy conversation about potential technological and biomedical catastrophe.

Now CEO and president of Rand Corporation, Matheny has built a career out of thinking about such gloomy scenarios. An economist by training with a focus on public health, he dived into the worlds of pharmaceutical development and cultivated meat before turning his attention to national security.

As director of Intelligence Advanced Research Projects Activity, the US intelligence community's research agency, he pushed for more attention to the dangers of biological weapons and badly designed artificial intelligence. In 2021, Matheny was tapped to be President Biden’s senior adviser on technology and national security issues. And then, in July of last year, he became CEO and president of Rand, the oldest nonprofit think tank in the US, which has shaped government policy on nuclear strategy, the Vietnam War, and the development of the internet.

Matheny talks about threats like AI-enabled bioterrorism in convincing but measured tones, Mr. Doomsday in a casual suit. He’s steering Rand to investigate the daunting risks to US democracy, map out new strategies around climate and energy, and explore paths to “competition without catastrophe” in China. But his long-time concerns about biological weapons and AI remain top of mind.

Onstage with WIRED at the recent Verify cybersecurity conference in Sausalito, California, hosted by the Aspen Institute and Hewlett Foundation, he warned that AI is making it easier to learn how to build biological weapons and other potentially devastating tools. (There’s a reason why he joked that he would pick up the tab at the bar afterward.) The conversation has been edited for length and clarity.

Lauren Goode: To start, we should talk about your role at Rand and what you’re envisioning for the future there. Rand has played a critical role in a lot of US history. It has helped inform, you know, the creation of the internet—

Jason Matheny: We’re still working out the bugs. [*]

Right. We’re going to fix it all tonight. Rand has also influenced nuclear strategy, the Vietnam War, the space race. What do you hope that your tenure at Rand will be defined by?

There’s three areas that I really want to help grow. First, we need a framework for thinking about what [technological] competition looks like without a race to the bottom on safety and security. For example, how can we assure competition with China without catastrophe? A second area of focus is thinking about how we can map out a climate and energy strategy for the country, in a way that is acceptable to our technology requirements, the infrastructure that we have and are building, and gets the economics right.

And then a third area is understanding the risks to democracy right now, not just in the United States but globally. We're seeing an erosion of norms in how facts and evidence are treated in policy debates. We have a set of very anxious researchers at Rand who are seeing this decay of norms. I think that's something that's happening not just in the United States but globally, alongside a resurgence of variants of autocracy.

One type of risk you’ve been very interested in for a long time is “biorisk.” What’s the worst thing that could possibly happen? Take us through that.

I started out in public health before I worked in national security, working on infectious disease control—malaria and tuberculosis. In 2002, the first virus was synthesized from scratch on a Darpa project, and it was sort of an “oh crap” moment for the biosciences and the public health community, realizing biology is going to become an engineering discipline that could be potentially misused. I was working with veterans of the smallpox eradication campaign, and they thought, “Crap, we just spent decades eradicating a disease that now could be synthesized from scratch.”.... 

....MUCH MORE

Still a few bugs in the system. Ha Ha.

Tesla Q1 2024 Earnings Call Transcript (TSLA)

In pre-market action the stock is up $17.47 (+12.07%) at $162.15.

Below are the words that are adding billions ($50+) to the company's valuation. 

Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one.

With that, here are the thoughts of the cultural observer Sting in his seminal work "De Do Do Do, De Da Da Da" as the conclusion of this intro:

"....Poets priests and politicians 
Have words to thank for their positions 
Words that scream for your submission 
And no-one's jamming their transmission...."



And the words. From MarketBeat, April 23, 2024:
Provided by AlphaStreet
Tesla Q1 2024 Earnings Call Transcript 

[Operator Instructions] But before we jump into Q&A, Elon has some opening remarks. Elon?

Elon Musk
Chief Executive Officer at Tesla

Thanks, Martin. To recap, in Q1, we navigated several unforeseen challenges as well as the ramp of the updated Model 3 in Fremont. As we all have seen, the EV adoption rate globally is under pressure and a lot of other auto manufacturers are pulling back on EVs and pursuing plug-in hybrids instead. We believe this is not the right strategy and electric vehicles will ultimately dominate the market. Despite these challenges, the Tesla team did a great job executing in a tough environment and energy storage deployments of Megapack, in particular, reached an all-time high in Q1 leading to record profitability for the energy business. And that looks likely to continue to increase in the quarters and years ahead. It will increase.

We actually know it will, so significantly faster than the car business as we expected. We also continue to expand our AI training capacity in Q1 more than doubling our training compute sequentially. In terms of the new product road map, there's been a lot of talk about our upcoming vehicle line in the next -- in the past several weeks. We've updated our future of vehicle lineup to accelerate the launch of new models ahead, previously mentioned start of production in the second half of 2025. So we expect it to be more like the early 2025, if not late this year.

These new vehicles, including more affordable models will use aspects of the next-generation platform as well as aspects of our current platforms, and we'll be able to produce on the same manufacturing lines as our current vehicle lineup. So it's not contingent upon any new factory or massive new production line, it will be made on our current production lines much more efficiently. And we think this should allow us to get to over 3 million vehicles of capacity when realized to the full extent.

Regarding FSD Version 12, which is the pure AI-based self-driving, if you haven't experienced this, I strongly urge you to try it out, it's profound. And the rate of improvement is rapid. And we've now turned that on for all cars with the cameras and inference computer everything from Hardware 3 in North America. So it's been pushed out to, I think, around 1.8 million vehicles, and we're seeing about half of people use it so far and that percentage is increasing with each passing week. So we now have over 300 billion miles that have been driven with FSD V12. And since the launch of full self-driving -- supervised full self-driving, it's become very clear that the vision-based approach with end-to-end neural networks is the right solution for scalable autonomy. And it's really how humans drive. Our entire road network is designed for biological neural nets and eyes. So naturally, cameras and digital neural nets are the solution to our current road system.

To make it more accessible, we've reduced the subscription price to $99 a month, so it's easy to try out. And as we've announced, we will be showcasing our purpose built Robotaxi or Cybercab in August. Yeah. Regarding AI compute. Over the past few months, we've been actively working on expanding Tesla's core AI infrastructure. For a while there, we were training constrained in our progress. We are, at this point, no longer training constraint, and so we're making rapid progress. We've installed and commissioned, meaning they're actually working 35,000 H100 computers or GPUs. GPU is wrong word, they need a new word. I always feel like a winds [Phonetic] when I say GPU because it's not. GPU stands -- G stands for graphics. Roughly 35,000 H100S are active, and we expect that to be probably 85,000 or thereabouts by the end of this year and training, just for training. We are making sure that we're being as efficient as possible in our training. It's not just about the number of H100s, but how efficiently they're used.

So in conclusion, we're super excited about our autonomy road map. I think it should be obvious to anyone who's driving Version 12 and it is only a matter of time before we exceed the reliability of humans in not much time with that. And we're really headed for an electric vehicle and autonomous future. And I go back to something I said several years ago that in the future, gasoline cars that are not autonomous will be like riding a horse and using a flip board [Phonetic]. And that will become very obvious in hindsight. We continue to make the necessary investments that will drive growth and profits will test in the future, and I wanted to thank the Tesla team for incredible execution during this period and look forward to everything that we have planned ahead. Next.

Martin Viecha
Vice President of Investor Relations at Tesla

Thank you very much, and Vaibhav has some comments as well.

Vaibhav Taneja
Chief Financial Officer at Tesla

Thanks. It's important to acknowledge what Elon said, from our auto business perspective, we did see a decline in revenues quarter-over-quarter and these were primarily because of seasonality, uncertain macroeconomic environment and other reasons, which Elon had mentioned earlier. Auto margins declined from 18.9% to 18.5%, excluding the impact of Cybertruck.

The impact of pricing actions was largely offset by reductions in per unit costs and the recognition of revenue from Autopilot feature for certain vehicles in the U.S. that previously did not have that functionality. Additionally, while we did experience higher cost due to the ramp of Model 3 in Fremont and disruptions in Berlin, these costs were largely offset by cost reduction initiatives.

In fact, if we exclude Cybertruck and Fremont Model 3 ramp costs, the revenue from auto margins improved slightly. Currently normalized Model Y cost per vehicle in Austin and Berlin are already very close to that of Fremont. Our ability to reduce costs without sacrificing on quality was due to the amazing efforts of the team, in executing Tesla's relentless pursuit of efficiency across the business. We've also witnessed that as other OEMs are pulling back on their investments in EV, there is increasing appetite for credits, and that means a steady stream of revenue for us. Obviously, seeing others pull back from EVs not the future we want. We would prefer it, the whole industry went all in.

On the demand front, we've undertaken a variety of initiatives, including lowering the price of both the purchase and subscription options for launching extremely attractive leasing specials for the Model 3 in the U.S. for $299 a month and offering attractive financing options in certain markets. We believe that our awareness activities paired with attractive financing will go a long way in expanding our reach and driving demand for our products. Our Energy business continues to make meaningful progress with margins reaching a record of 24.6%. We expect the energy storage deployments for 2024 to grow at least 75% higher from 2023.

And accordingly, this business will begin contributing significantly to our overall profitability. Note that there is a bit of lumpiness in our storage deployments due to a variety of factors that are outside of our control, so deployments may fluctuate quarter-over-quarter.

On the operating expense front, we saw a sequential increase from our AI initiatives, continued investment in future projects, marketing and other activities. We had negative free cash flow of $2.5 billion in the first quarter. The primary driver of this was an increase in inventory from a mismatch between builds and deliveries as discussed before, and our elevated spend on capex across various initiatives, including AI compute. We expect the inventory build to reverse in the second quarter and free cash flow to return to positive again.

As we prepare the company for the next phase of growth, we had to make the hard but necessary decision to reduce our head count by over 10%. The savings generated are expected to be well in excess of $1 billion on an annual run rate basis. We are also getting hyper focused on capex efficiency and utilizing our installed capacity in a more efficient manner. The savings from these initiatives, including our cost reductions will help improve our overall profitability and ultimately enable us to increase the scale of our investments in AI.

In conclusion, the future is extremely bright and the journey to get there while challenging will be extremely rewarding. Once again, I would like to thank the whole Tesla team for delivering great results. And we can open it up to Q&A....

....MUCH MORE

Also at The Motley Fool  

And as our outro:

....Don't think me unkind
Words are hard to find
They're only cheques I've left unsigned
From the banks of chaos in my mind....

Recently: 

"A South Korean woman says she fell in love with a fake Elon Musk who talked up a storm about building Gigafactories and luxe helicopter rides. Then she gave him $50,000"

"LIVE BLOG: Tesla Q1 2024 earnings call"

 "Is Elon Musk About To Force Everyone To View Tesla As An AI Company After Earnings?" (TSLA)

"On Earnings Calls, Do Executives Mumble on Purpose?"

"Ahead Of Next Week's Tesla Earnings Report, A Reminder (TSLA)

"A South Korean woman says she fell in love with a fake Elon Musk who talked up a storm about building Gigafactories and luxe helicopter rides. Then she gave him $50,000"

 From Business Insider via AOL, April 24:

  • A South Korean woman lost $50,000 after falling in love with a fake Elon Musk.
  • The Musk impersonator befriended her on Instagram, where he told her he "contacts fans randomly."
  • Fake Musk then claimed he could make the woman rich by helping her invest her money.

A South Korean woman says she lost $50,000 to a con artist who was posing as Elon Musk.

"On July 17 last year, Musk added me as a friend on Instagram. Although I have been a huge fan of Musk after reading his biography, I doubted it at first," the woman, who declined to provide her real name, told South Korean broadcaster KBS in an "In Depth 60 Minutes" interview that aired April 19, per a translation from The Korea Herald.

The woman said she began to believe that she was conversing with the real Musk after the person she was talking to sent her photos of what appeared to be Musk's ID card and images of himself at work.

"'Musk' talked about his children and about taking a helicopter to work at Tesla or Space X," she told KBS. "He also explained that he contacts fans randomly."

The fake Musk, the woman said, even shared details about a meeting that the real Musk had with South Korean President Yoon Suk Yeol in April 2023. The impersonator said Yoon told "Musk" to build Tesla's Gigafactories in Seoul and Jeju.

"'Musk' even said 'I love you, you know that?' when we made a video call," the woman said, referencing a video call with what was likely to be a deepfake of Musk....

....MORE

Tuesday, April 23, 2024

"Goldman says we're still in phase 1 of AI's stock-market takeover. Here's how they expect phases 2 through 4 to play out"

From Business Insider via Yahoo Finance, April 22:

  • Markets are still just in the first phase of an AI-led upsurge, Goldman Sachs wrote in a recent research note.
  • Nvidia is the central piece in the opening inning, but analysts still see more upside in further phases of the AI story.
  • The firm says eventually, AI will broaden to benefit other sectors, such as computer services.

Artificial intelligence has already propelled markets into overdrive, and yet this equity power fuel is nowhere close to running low, Goldman Sachs said.

Instead, stocks are just in the first phase of the AI-led upsurge, which will broaden out to uplift more and more sectors, the bank said in a Tuesday post.

"If Nvidia represents the first phase of the AI trade, Phase 2 will be about other companies that are helping to build AI-related infrastructure," it said. "Phase 3 deals with companies incorporating AI into their products to boost revenue, while Phase 4 is about the AI-related productivity gains that should be possible across many businesses."

Here's a deeper rundown of Goldman's AI timeline:

First phase
Ever since ChatGPT sparked the AI race in late 2022, chipmaker Nvidia has catapulted in markets. Given that its semiconductors are the basis for this emerging software, the company has made itself a cornerstone of the technological transition, climbing as much as 590% in this period.

"Remarkably, though, those gains have been entirely driven by earnings growth: The company's price-to-earnings ratio is barely higher than it was at the start of last year," Goldman said.

Supporting the view that the first phase is not over, analysts see even more gains ahead. Recently, Evercore ISI put out a bull target of $1,540, representing 81% upside from Friday's stock price.

"We think investors underestimate the importance of the chip+hardware+software ecosystem that Nvidia has created," analysts said.

Second phase

Eventually, Goldman expects other firms to benefit from the AI buildout, though this isn't limited to just semiconductor producers and designers. Cloud providers, computer equipment makers and security software developers will all have a part to play.

That also extends to real world infrastructure, as AI will need expansive data centers to run it — a boost to everything from real estate to the utility sector.

It's a bet also made by investing legend Steve Eisman, who previously explained that the new GPUs require three times as much electricity as traditional hardware. The accelerated power demand will amplify spending on grid improvements and the companies that run it.

Third phase....

....MUCH MORE

"Danish Heirs to Sell $72 Million Rare Coin Collection After 100 Years" (plus the Methuselah Trust of Hartwick College)

From Bloomberg, April 23:

An unusual and iron-clad will locked one of the most important coin collections in the world away for a century. 

The descendants of the Danish butter magnate Lars Emil Bruun waited exactly 100 years to claim their now $72 million inheritance. Not by choice.

At least one grandchild reportedly tried and failed to break Bruun’s will, which specified that his 20,000-piece coin collection should remain intact and stored away, then be sold at auction after a century elapsed.

Now, finally, the time has come. The trove of coins and medals will be sold over several years via the coin auction house and dealer Stack’s Bowers. The first tranche of the collection is set to hit the block this fall. “When I first heard about the collection a couple years back,” says Vicken Yegparian, the company’s vice president for numismatics, “I was flabbergasted that something like this could exist.”

Safekeeping Cultural Patrimony
Over the course of his life, Bruun (1852-1923) created a monumental collection of coins, medals and paper currency, predominantly from countries with some connection to Scandinavia.

“You’ve got Denmark, Norway, Sweden and then places that used to be under Danish or Norwegian or Swedish rule,” says Yegparian, name-checking places as varied as the Danish West Indies (now the US Virgin Islands) and Tranquebar (now Tharangambadi), a onetime Danish outpost in India. Bruun even collected English coins from when the Danes ruled the country. “There’s a huge run of coins from King Canute of England,” Yegparian says.

Once Bruun had accumulated all these objects, though, he began to weigh their national significance.

Having lived through the devastation of World War I, Bruun was understandably skittish about Denmark’s cultural patrimony. As a consequence, he decided to frame his collection as a sort of backup to the Royal Danish Collection of Coins and Medals, “as a redundancy and a protection against something happening to the existing collection,” says Brian Kendrella, president of Stack’s Bowers. Bruun decided that after 100 years, if the national collection had remained intact, it would be safe to sell his own collection at public auction. Proceeds were willed to his direct heirs.

And so for the past 100 years his collection has sat, mostly undisturbed, available to scholars when they’ve asked and locked away to everyone else, Kendrella says.

Living With a Gold Mine

Through the auction house, his heirs declined to comment. The Danish media have been interested in this story for years, however, and from time to time, Bruun’s descendants have commented publicly on the looming inheritance, with one noting that his father was a taxi driver and that he might “buy a new golf set” if and when the collection was sold.

The irony, Yegparian says, is that by stashing away his collection for 100 years, Bruun managed to successfully safeguard his family’s intergenerational wealth.... 

....MUCH MORE

These long time-horizons really can be tricky and Mr. Brunn is to be commended for his understanding of possible issues. When the Nazis invaded Denmark in April 1940 the value, if not the valuation, of having these tiny treasures dispersed and separate from the Royal collection would be made obvious.

For a slightly different long term asset see:

The Methuselah Trust of Hartwick College (Updated)

"LIVE BLOG: Tesla Q1 2024 earnings call"

 The scribes at Teslarati are doing the hard work.

April 23:

Tesla’s (NASDAQ:TSLA) Q1 2024 earnings call comes on the heels of the company’s Q1 2024 Update Letter, which was released after the closing bell on Wednesday, April 23, 2024. 

Tesla posted total revenues of $21.3 billion, with automotive revenues at $17.3 billion for the first quarter of 2024. The company also posted non-GAAP earnings per share of $0.45 and GAAP EPS if $0.34 for Q1 2024. Tesla also posted $1.2 billion GAAP operating income in Q1, $1.1 billion GAAP net income in Q1, and $1.5 billion non-GAAP net income in Q1. 

The following are live updates from Tesla’s Q1 2024 earnings call. I will be updating this article in real-time, so please keep refreshing the page to view the latest updates on this story. The first entry starts at the bottom of the page.

16:26 CDT – Hello, everyone, and welcome to our live blog of Tesla’s first-quarter 2024 earnings call. While Tesla did not exactly meet analyst expectations, the company’s first-quarter results were positively received by shareholders. As of writing, Tesla shares are trading up 8.14% in Wednesdaays’ after-hours. It’s been a while since TSLA shares saw such movement....

The call is just getting started, check their site often or wait until a transcript appears from one of the transcription services in a few hours or tomorrow.

SITE

There will be errors, transcription and otherwise, there always are.

The stock is trading at $156.24 up $11.56 (+7.99%) after hours.

"Generative A.I. Arrives in the Gene Editing World of CRISPR"

From The New York Times, April 22:

Much as ChatGPT generates poetry, a new A.I. system devises blueprints for microscopic mechanisms that can edit your DNA.

Generative A.I. technologies can write poetry and computer programs or create images of teddy bears and videos of cartoon characters that look like something from a Hollywood movie.

Now, new A.I. technology is generating blueprints for microscopic biological mechanisms that can edit your DNA, pointing to a future when scientists can battle illness and diseases with even greater precision and speed than they can today.

Described in a research paper published on Monday by a Berkeley, Calif., startup called Profluent, the technology is based on the same methods that drive ChatGPT, the online chatbot that launched the A.I. boom after its release in 2022. The company is expected to present the paper next month at the annual meeting of the American Society of Gene and Cell Therapy.

Much as ChatGPT learns to generate language by analyzing Wikipedia articles, books and chat logs, Profluent’s technology creates new gene editors after analyzing enormous amounts of biological data, including microscopic mechanisms that scientists already use to edit human DNA.

These gene editors are based on Nobel Prize-winning methods involving biological mechanisms called CRISPR. Technology based on CRISPR is already changing how scientists study and fight illness and disease, providing a way of altering genes that cause hereditary conditions, such as sickle cell anemia and blindness.

Previously, CRISPR methods used mechanisms found in nature — biological material gleaned from bacteria that allows these microscopic organisms to fight off germs.

“They have never existed on Earth,” said James Fraser, a professor and chair of the department of bioengineering and therapeutic sciences at the University of California, San Francisco, who has read Profluent’s research paper. “The system has learned from nature to create them, but they are new.”

The hope is that the technology will eventually produce gene editors that are more nimble and more powerful than those that have been honed over billions of years of evolution....

"Yuan internationalization drive hits a local speed bump" (slow motion devaluation)

From Asia Times, April 23:

Chinese companies reluctant to convert FX earnings into yuan as incentives rise for PBOC to let the currency fall  

As Chinese leader Xi Jinping works to increase the yuan’s role in global trade and finance, he’s encountering an unexpected speed bump: mainland companies.

New data from the People’s Bank of China (PBOC) suggest corporate chieftains are dragging their feet on converting foreign-exchange earnings into local currency.

In March, FX deposits rose to US$833 billion from $779 billion a month earlier, signaling that businesses are slow-walking moves to swap earnings into their home currency.

The most obvious explanation: higher offshore interest rates that are contributing to a weaker-than-expected yuan.

“This huge positive yield spread is not evaporating anytime soon,” says Alvin Tan, currency strategist at RBC Capital Markets.

The rate differential between the US and China is the most positive since 2007. “This powerful fundamental fact,” Tan notes, “is enough to explain why Chinese exporters are reluctant to exchange dollars for yuan.”

It’s also another reason for Beijing’s currency managers to resist the urge to chase a falling yen downward in the months ahead. It might backfire in ways that run counter to Xi’s grand vision for “yuanization.”

Granted, Xi and Premier Li Qiang have so far resisted the urge to devalue. But as Asia’s biggest economy hits intensifying headwinds, a weaker exchange rate could be just the thing to juice exports and ensure gross domestic product (GDP) stays near 5% and deflationary pressures remain in check.

There are myriad reasons why Team Xi and PBOC Governor Pan Gongsheng have not chased the yen lower.

For one thing, it would make it harder for property development giants to make offshore bond payments, raising the odds of more China Evergrande Group-like defaults. For another, it could make China an even bigger flashpoint ahead of the November 5 US election....

....MUCH MORE

We've been looking at the role of China's dollar-denominated debt in the policy-making context for years. Here's a post fromm 2020:

"China is underestimating its US$3 trillion dollar debt and this could trigger a financial crisis, says economist"
This is an old warning, November 16, 2018, but very important for an understanding of the high wire act the PBOC and the Government/Communist Party are embarked on....

And 2019:
SCMP: "China exchange rate drop could continue into 2020 as it tries to offset US tariff impact, analysts say"
Everything is connected.
One consideration that we are not seeing get enough play is the dollar denominated debt that Chinese companies have issued. More below but first up the South China Morning Post...

And:

China Has $3 Trillion of Dollar Denominated Debt. That Is A Potential Disaster
With Treasury Secretary Mnuchin last month reiterating his concern that China was devaluing the yuan (SCMP: China is letting value of yuan slide to offset trade war ...) I thought it time to re-post this piece from November 2018.

China is in a bit of a bind with the yuan. While devaluing would indeed offset the tariffs, it would also increase both the interest expense and maturity pay-off cost of all that dollar denominated debt....

Be all that as it may be, it looks like the Chinese-powers-that-be have decided to do the slow-motion devaluation and  it is costing more and more yuan to buy a dollar, with 8:1 sometime in 2025 being quite possible.

But if so, woe unto the German exporters. there's a reason Scholz was in Beijing. 
From TradingView, the last month of USDCNY action:

Chart Image

 

You can see why the Chinese companies would like to keep their FX reserves in FX.

"On Earnings Calls, Do Executives Mumble on Purpose?"

From the University of Chicago's Booth School of Business, Chicago Booth Review, February 26, 2024:

Research finds a link between vocal delivery and investor reaction.
Earnings calls are meant to be a simple, direct way to get information to investors, but sometimes the audio leaves listeners struggling to understand. Could that be deliberate?

Research by Seoul National University’s Bok Baik, Chicago Booth PhD student Alex G. Kim, MIT PhD student David Sunghyo Kim, and Korea University’s Sangwon Yoon suggests it might. They explored how the quality of the vocal delivery on earnings calls can influence investors’ trading in the moment, and find that market reactions tend to be more subdued when delivery is poor and listeners struggle to understand what is being said. The researchers contend that managers may even deliberately modulate the quality of their vocal delivery on the basis of their own economic incentives.

A variety of prior studies have established that the tone of earnings calls, and even the obtuse language and erroneous expressions that executives sometimes use, affect investor reactions. Baik, Kim, Kim, and Yoon instead focused on qualities that can hamper the clarity of vocal delivery, such as mumbling, mispronunciation, and lazy diction.

The researchers analyzed nearly 29,000 quarterly earnings calls occurring between 2008 and 2020 from almost 2,000 companies, limiting the calls to those that took place during market trading hours and focusing on the portion of the calls in which managers presented results.

They used an open-source model based on a deep-learning algorithm that converted audio files to letters, which were then combined into words and ultimately text. When doing this, the model generated a probability value, which represented the certainty of each audio-to-letter conversion. When there was a high probability for one particular letter, the researchers inferred clarity in the audio. But when the probabilities were more diffuse, they deemed the text to be less listenable and harder to understand. (For example, if the letter “a” was pronounced clearly, the model gave it a probability of 1—or else it might give it a 50 percent chance of being an a and a 50 percent chance of being an e.) The researchers took advantage of the probabilities that the model calculated to develop a score for audio clarity.

Using a regression analysis, they find that when the quality of vocal delivery fell, trading activity was more subdued than normal. On the other hand, clear delivery was associated with more active market reactions. When vocal-delivery quality was high, analysts were more likely to issue early forecast revisions even before an official earnings call transcript was released. High-quality vocal delivery also appeared to strengthen the media hype (measured by text sentiment analysis of coverage), as well as the positive relationship between earnings surprises and abnormal market reactions.

The link between vocal quality and trading activity....

....MUCH MORE

Also at the CBR:

How to Get into the Top 1 Percent of Dating Profiles 

"Is Elon Musk About To Force Everyone To View Tesla As An AI Company After Earnings?" (TSLA)

It is possible that Mr. Musk knows more about electric vehicles and the retail market for electric vehicles than I do. And it is possible that he intuits something about the industry or the regulatory or government policy framework toward electric vehicles that he hopes to either guard against or take advantage of.

And it's possible he's just a self-made centibillionaire loony.

From Investor's Business Daily, April 22:

All eyes will be on Chief Executive Elon Musk Tuesday during Tesla's (TSLA) first quarter earnings call as investors look for clarity and insight into his strategy and whether Musk is rebranding Tesla in plain sight. TSLA shares sank Monday.

It has become increasingly evident in recent weeks that Musk and Tesla are shifting toward an increased focus on autonomy, Full Self-Driving (FSD) and its robotaxi program as EV demand has slowed in 2024.

With Tesla's first quarter earnings and revenue release late Tuesday, Wall Street might be getting some answers.

Last week, Tesla announced plans to lay off more than 10% of its global workforce, with key executives leaving the company, and Musk saying it is part of the next "phase of growth."

The layoffs come after Reuters reported on April 6 that Tesla has switched focus from the $25,000 next-generation Model 2 in favor of prioritizing efforts on its robotaxi program. Following the report, Musk quickly announced that Tesla will unveil the robotaxi on Aug. 8.

Musk also took to X, formerly Twitter, on April 6 and said "Tesla is an AI/robotics and sustainable energy company." The Tesla chief has long said the company is more than just an auto company, but his recent proclamation signals a shift away from the automobile label.

A key question for the Tesla earnings call is whether Elon Musk is shelving the Model 2 for several years.

Adding to the uncertainty, Tesla last week requested shareholders ratify Musk's $56 billion 2018 compensation plan despite a Delaware court voiding the plan earlier this year. The shareholder meeting is scheduled for June 13. Musk in January posted on X that he was "uncomfortable growing Tesla to be a leader in AI & robotics without" around 25% voting control.

Tesla Stock: Moving Away From EV Business
On Monday, TSLA shares fell 3% to 142.65 in Monday market action, hitting a fresh 52-week low of 138.80 intraday.

Tesla stock dropped around 2% on Friday, diving 14% for the week and undercutting April 2023 lows.

Deutsche Bank analyst Emmanuel Rosner on Thursday wrote it now appears Tesla's future is tied to "cracking the code on full driverless autonomy," which represents a "significant technological, regulatory and operational challenge."

The analyst added that the shift in focus to the robotaxi is "thesis-changing" and that it could undergo a "potentially painful transition in ownership base" with EV investors "throwing in the towel" and "eventually replaced by AI/tech investors with considerably longer time horizon."

Meanwhile, Morgan Stanley analyst Adam Jonas wrote Wednesday that "it seems" Tesla is exiting the traditional EV auto industry.

"This doesn't mean that Tesla won't keep selling cars (including new launches) for many years to come," Jonas added.

Bracing For Q1 Earnings
With few details on Musk's strategy on the robotaxi and the next-generation vehicle, investors and analysts seem skittish ahead of the upcoming first quarter earnings call Tuesday after the market closes.

Analysts project Q1 earnings falling more than 42% to 49 cents per share with sales declining nearly 5% to $22.2 billion. If Tesla Q1 EPS comes in as expected, it would be the lowest quarterly level since the EV giant hit 48 cents per share in Q2 2021. It would be the first year-over-year revenue decline since early in the pandemic.

Tesla recently recast Full Self-Driving from FSD Beta to supervised FSD. That suggests that the EV giant could recognize more deferred FSD revenue, giving EPS a boost. As a result, Tesla's cash flow will be an important number to watch in Q1.

Tesla also began in April offering free FSD trials with the purchase of a new vehicle. Then, over the weekend, the EV company lowered the annual FSD price by 33% to $8,000. This move comes two weeks after he cut the monthly FSD subscription price to $99 per month, down from $199 per month.

Tesla reported in early April that global first quarter deliveries totaled 386,810 while it produced 433,371 vehicles. The deliveries included a combined 369,783 Model 3 and Model Y units along with 17,027 "other" vehicles. Tesla's 386,810 deliveries tally in Q1 undercut even the lowest estimates and marks the lowest quarterly deliveries since 344,000 in Q2 2022.

The EV giant blamed the first quarter performance on issues with the production ramp-up of the updated Model 3 along with factory shutdowns....

....MUCH MORE

If interested see also April 18's "Ahead Of Next Week's Tesla Earnings Report, A Reminder (TSLA)"  

Monday, April 22, 2024

Meanwhile, In Britain: "How facial recognition technology has changed policing"

This is nothing new for our Chinese readers and it is no surprise that the most surveilled Western city is keen on the technology but it is still a bit jarring when you think through the implications.

From The Times, April 5:

Scanning tool is the biggest game-changer for officers since DNA, says Met’s intelligence director

https://www.thetimes.co.uk/imageserver/image/%2Fmethode%2Ftimes%2Fprod%2Fweb%2Fbin%2F14803245-08ed-45fb-b156-0d807d4e2775.jpg?crop=1600%2C900%2C0%2C0&resize=1500

Police use vans with facial recognition cameras that scan the streets

Similar to the government’s artificial intelligence safety conference last year, the planned policy statement includes “guardrails and safeguards” that it ­believes will demonstrate to the public how the controversial technology will not impinge on their privacy. There are also hopes that it can be introduced at fixed cameras at railway stations.

Live facial recognition uses cameras attached to the top of police vans to scan the faces of people as they walk past, immediately assessing them against a wanted list and alerting officers if there is a match.

Chris Philp, the minister for policing, said that it had “revolutionised” crime detection and £230 million would be spent on police technology, including more facial recognition vans, over the next four years....

....MUCH MORE

If interested we have a few hundred posts on facial recognition and attempts at defeating same including this oldie-but-goodie from 2018:

ICYMI: The Most Valuable AI Start-up Inthe World Does Facial Recognition

Some thought us mad with our focus on countermeasures to the surveillance state. But there was a method to that madness.

We've looked at responses ranging from simple dazzle camouflage back in 2013's How to Hide From Cameras:

http://static.squarespace.com/static/514f916de4b04c6ad186e00d/514f94d2e4b05df537e5224e/514f94d2e4b05df537e5267d/1231283416153/DAZZLE.jpg/1000w

To hairstyles + makeup that confuse facial recognition algos:

https://i.guim.co.uk/img/media/396302866244e3539e54bc5571e27fb512f1e59f/62_0_885_531/master/885.png?w=620&q=55&auto=format&usm=12&fit=max&s=eefd8e09624ac90c3d07802fa5fe591b
...but this raises its own set of problems, not the least of which is 
taking a half hour to apply just so you can go down to the lobby.

To Hyperface clothing with thousands of pseudo-facial "hits" that simply overwhelm the computer:
"Anti-Surveillance Clothing Aims to Hide Wearers From Facial Recognition "

https://i.guim.co.uk/img/media/f28edd54e33cb391aea9f19448b8ff11ecb5fa54/25_0_663_398/master/663.png?w=620&q=55&auto=format&usm=12&fit=max&s=b052101fa6e1777fe2c8bfdf7ff395f7

From the scholarly stuff such as "Fooling The Machine: The Byzantine Science of Deceiving Artificial Intelligence".
To, as noted in ""Magic AI: 'These are the Optical Illusions that Trick, Fool, and Flummox Computers.":
...First though a bit of housekeeping.
Just so you know, I don't actually use the make-up techniques featured in the earlier posts. Despite the fact they have some efficacy at fooling the camera they make you look like a moron to human observers on the street. Better to just put on some glasses and blend into the crowd.
https://hips.hearstapps.com/toc.h-cdn.co/assets/cm/14/37/540fe7c50c224_-_tc-iconic-kennedy-weddings-9.jpg
Can you pick out the Kennedys in this photo?

Here's why we cared: There is big money in this stuff!!
From Bloomberg, April 8: 

China Now Has the Most Valuable AI Startup in the World
SenseTime Group Ltd. has raised $600 million from Alibaba Group Holding Ltd. and other investors at a valuation of more than $3 billion, becoming the world’s most valuable artificial intelligence startup.

The company, which specializes in systems that analyze faces and images on an enormous scale, said it closed a Series C round in recent months in which Singaporean state investment firm Temasek Holdings Pte and retailer Suning.com Co. also participated. SenseTime didn’t outline individual investments, but Alibaba was said to have sought the biggest stake in the three-year-old startup.

With the deal, SenseTime has doubled its valuation in a few months. Backed by Qualcomm Inc., it underscores its status as one of a crop of homegrown firms spearheading Beijing’s ambition to become the leader in AI by 2030. And it’s a contributor to the world’s biggest system of surveillance: if you’ve ever been photographed with a Chinese-made phone or walked the streets of a Chinese city, chances are your face has been digitally crunched by SenseTime software built into more than 100 million mobile devices.

The latest financing will bankroll investments in parallel fields such as autonomous driving and augmented reality, cover the growing cost of AI talent and shore up its computing power. It’s developing a service code-named “Viper” to parse data from thousands of live camera feeds -- a platform it hopes will prove invaluable in mass surveillance. And it’s already in talks to raise another round of funds and targeting a valuation of more than $4.5 billion, according to people familiar with the matter.

“We’re going to explore several new strategic directions and that’s why we shall spend more money on building infrastructure,” SenseTime co-founder Xu Li said in an interview. The company turned profitable in 2017 and wants to grow its workforce by a third to 2,000 by the end of this year. “For the past three years the average revenue growth has been 400 percent.”...MUCH MORE
Both Futurism and Quartz zoomed in (CCTV term) on the surveillance bit:
World’s Most Valuable AI Startup Also Happens To Be Part of “the World’s Biggest System of Surveillance”
The billion-dollar, Alibaba-backed AI company that’s quietly watching people in China

Some of our previous posts on various related subjects:
"The selling of facial recognition technology—and the staggering consequences"
Facial recognition In China
We'll be coming back to what has become a bit of an obsession on the blog, and the countermeasures thereto, but for now, just some of the applications. Remember, this isn't the state of the art, this is stuff that is being deployed right now.
The state of the art is really spooky....
 
"Who Owns Your Face?"
"China’s Surveillance State: AI Startups, Tech Giants Are At The Center Of The Government’s Plans"
"Casino ATMs are Using Facial Recognition to Spot Money Launderers in Macau"
DNA Techniques Could Transform Facial Recognition Technology
 Bank Robbers’ Aluminum Invisibility Cloaks Foiled by CCTV
Memo: New York Calling For Face Recognition Cameras At Bridges, Tunnels
Adversarial Images, Or How To Fool Machine Vision
Cargill Invests In Facial Recognition For Cows
And many, many more. Use the 'search blog' box if interested. 

Now, if you'll excuse me for a bit, I have to go out in public for a bite to eat:


https://media.allure.com/photos/58e4005b82145034c5ad10da/master/pass/Untitled-3.jpg

"Volkswagen electric car sales plunge: Why are Europeans returning to petrol?"

From EuroNews, April 11:

Sales of Volkswagen electric vehicles in Europe fell by almost a quarter in the first three months of the year as consumers returned to petrol.

The company said in its latest financial update on 10 April that sales of all-electric vehicles declined by 24% in Europe, while sales grew by 91% in China, year-over-year.

However, overall, the company said it increased its vehicle deliveries by 3% to 2.10 million vehicles with the main drivers being China, South America and North America.

"Vehicles with combustion engines increased by 4% to 1.97 million units, overcompensating the slight decline of 3% to 136,400 all-electric vehicles (BEV). In this segment, strong growth in China (+91%) did not fully offset the decline in Europe (-24%)....

....MUCH MORE

Bridgewater: "Ray Dalio’s Famous Trade Is Sputtering and Investors Are Bailing"

 From Bloomberg via Yahoo Finance, April 22:

It was an irresistible pitch. Give us your money, executives at Ray Dalio’s Bridgewater Associates and other hedge funds said, and we’ll funnel it into a money-minting, sure-thing strategy for the long haul. But now, after five years of sub-par returns, many of the institutional investors who sunk large sums into risk-parity funds, as they’re known, are demanding the money back.

Investors including public pensions in New Mexico, Oregon and Ohio have yanked out cash, slashing the size of the funds by an estimated $70 billion from their peak three years ago. For many, the pleas from firms for more time — that the next decade in markets is unlikely to resemble the last — ring hollow.

“It’s been disappointing for a long time,” said Eileen Neill, managing director at Verus Investments, an adviser to New Mexico’s roughly $17 billion public employee pension, which axed its risk-parity allocation in December. “The only time risk parity was really successful was at the time of the Great Financial Crisis and that was really its heyday.”

The lackluster run through the post-pandemic booms and busts has rattled faith in an allocation method pioneered by Dalio, who built Bridgewater into the world’s largest hedge fund. The strategy focuses on diversification across assets based on how volatile each is, and often uses leverage to optimize returns relative to the risks taken.

It flourished after the 2008 financial crisis as investors sought a way to protect themselves from the next big cataclysm. But as investors went on to plow back into stocks, they lagged in the up years. Then when markets cracked in 2022 — pummeling safe assets like US Treasuries — they were hit even harder.

All told, risk parity funds have lagged global 60/40 funds every year since 2019, according to a broad index of the industry.

That’s driven investors to pull out cash, cutting the amount in such funds to about $90 billion by the end of 2023 from a peak of about $160 billion in 2021, according to Verus estimates compiled from eVestment data.

First launched in 1996 to manage Dalio’s trust assets, it was billed as a way to use deep economic research to craft the best possible portfolio, instead of trying to call the next big thing.

Rather than pile on risk to chase big returns, the strategy generally involves diversifying across a broader array of assets like commodities and bonds and making each an equal driver of the portfolio’s volatility. To keep the risks balanced, the exposures can be dialed up or down based on how much prices are swinging around, making the strategy Wall Street’s favorite scapegoat in a selloff.

A Tough Environment
To the strategy’s proponents, the decision to bail just as stock prices hit new records reflects a classic investing error.

“That really is reasoning from the past decade, which I will claim is more exceptional,” said Otto van Hemert, director of core strategies at Man AHL, which runs about $15 billion in risk parity....

....MUCH MORE

Related 

Some of our posts on Bridgewater and/or its founder. Most recently:

Ray Dalio: "Are We In A Bubble?"

He says no but he was also pushing investments in China* that are now down 50 - 60%. 

He's such an odd duck. I mean most multi-billionaires are odd ducks, it's sort of a prerequisite for the self-made or a condition of employment for inheritors but even in this cohort he sticks out.

I on the other hand think things are bubbly but will get even more bubblicious as long as "the grass shall grow and excess liquidity flow." (apologies to all the U.S. - indigenous treaty writers of a couple centuries ago) 
And embedded therein: 
"Is Dalio's Bridgewater A Fraud? Here Are The Troubling Questions Posed By Jim Grant"—UPDATED II
Bridgewater, World’s Largest Hedge Fund, Is Building An Algorithmic Model Of Ray Dalio's Brain
Frederick Taylor and Ray Dalio's Brain: "Working for an Algorithm Might Be an Improvement"
Bridgewater's Ray Dalio Really Didn't Like The Wall Street Journal Story on His Brain (he's also against fake news)
"Why Ray Dalio is wrong about China"
Speaking of China, Bridgewater's Ray Dalio Has Some Thoughts
"Western Greed Fuels China's Domination"
It's good to name names. Unfortunately Dalio, Dimon, Fink and Cook sounds like the law firm from hell....

If interested see also:

September 2021: "Dalio’s Hedge Fund Risks Being Dumped by Pension on Weak Returns"

March 4, 2019
Bridgewater's Dalio Cuts His Odds of a Recession Occurring Before the Next U.S. Presidential Election.
Our bet, from two years ago had the U.S. stock market peaking this year and a recession to follow in 2020.
We'll be revisiting that prognostication....

"Why Ray Dalio is wrong about China"
No, not because of "Chinese Hedge Fund Jumps 258% After Dumping Ray Dalio’s Strategy"