birb_cromble
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User ID: 3236
It might be worth moving this over into the finance thread, but I am at least partially putting my money where my mouth is.
I'm of the opinion that the current LLM hype is starting to hit the second knee of the S-curve, both financially and technically.
Technically, exponential growth leads to exponential friction, and it looks to me like the real-world improvements in model capabilities are slowing down between generations. Anecdotally, it feels like the models are increasingly fungible and most of the ostensible improvements have come from harnesses, which are regular old software engineering. I think there's something there, but I think LLM tech represents a local maximum. I'm eagerly watching whatever Yann Lecun is cooking up at AMIL, because the general concept of a world model seems to map better to what we think of as "intelligence". His paper on energy models, specifically, is fascinating.
Financially, I think a lot about the "during a gold rush, sell shovels" aphorism. I also think about Buffett and Munger's rules of investing. Meta and Oracle are buying shovels, but using them to dig their own graves, so far as I can tell. I don't think Anthropic and OpenAI are ever going to be able to support their valuations, and per their S-1, xAI has already pretty much given up. If Google dies, it'll be for reasons other than AI spending. Nvidia has a good product and a good moat for now, but various specialized competitors are nipping at their heels while Chinese cards may develop into direct competitors.
In other words, I think the tech is going to continue developing, but I think a lot of the current players are in for a rude reminder of market on market fundamentals by 2H 2027 or so. I know you've bemoaned "financialization" in the past, but at the end or the day the economy is just people buying and selling things, and fuck me if it doesn't seem like some of these companies are trying to act like that's not true.
Where does that leave me? I'm moving down the stack. If the tech is going somewhere, it has to run on real things and interact with the real world eventually. Companies doing physical things are riskier to start than pure software, but they're less likely to get disrupted once they establish themselves. I've largely stopped investing in funds that hold significant amounts of meta, oracle, Tesla (because I think they may absorb SpaceX), and even Nvidia. On the other hand, I'm expanding my positions in funds that hold TSMC, ASML, and Lam Research. I am watching Cerebras, but I won't invest until I better understand how they're using software to get around defects on their enormous chips.
Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
I'm not a mod, but please don't lead with accusations of bad faith. It's clear you have a lot of experience in this area, and I fear you're assuming that the layman's level of expertise is much higher than it is.
birb_cromble
5d ago
past like 5+ years
2022 was an apocalyptically bad year for bonds. It was the worst year in history. The runner up was 1803. How does your four year look?
Beyond that, are you looking at share appreciation or total yield?
birb_cromble
5d ago
You can pry my minus sign dash from my cold, dead hands.
birb_cromble
5d ago
It could still be, but I'm too old to keep track of that shit anymore.
birb_cromble
5d ago
People like MLID have been floating rumors about Intel killing their consumer GPUs since about ten seconds after ARC came out. At this point I take rumors of cancellation as evidence of an imminent release.
birb_cromble
5d ago
For tax loss harvesting specifically there's a limit, but I'm going to go out on a limb and assume that somebody with Trump's net worth has access to tax avoidance schemes that don't even have names yet.
birb_cromble
6d ago
How does the price of SLV and the NAV of SLV correlate to the spot price of physical silver? Reading the prospectus, it seems like it is actually holding a fair amount of physical silver in trust, but I'm out traveling for the weekend and I can't really dig.
birb_cromble
6d ago
I think we might be talking past each other. I was talking about treasury inflation protected securities.
Charitably, it could be tax loss harvesting. At high net worth and income strategies like that can get pretty intense.
birb_cromble
6d ago
I wish TIPS weren't taxed the way they are. It seems almost perfectly self-defeating
birb_cromble
6d ago
This is going to sound insane, but learn to write music in standard notation. I'm a lot of ways, it's a very simplified programming language.
birb_cromble
6d ago
I'm in a weird place with Nvidia. I'm invested in them indirectly through various funds, but I'm getting a little concerned.
In my neck of the woods, you can't buy 2B limestone anymore. It doesn't matter how much money you have, the quarries are completely tapped on supply. They can only sell at the rate they can get it out of the ground. Since you need that for leveling foundations and making concrete, that must be slowing down data center construction. If that's true, and something like 80% or more of Nvidia's revenue is from data center build outs, I worry what even a small to medium hiccup in construction could do. How long could they sit on inventory before investors get antsy?
birb_cromble
6d ago
I come from a bad home life, and the part about deconstructing what you have learned really resonates. I didn't really know what normal people were like until I was in my late 20s.
Is there anybody here who is in a similar position or otherwise qualified to offer any valuable input?
There have been three things that have been valuable for me:
- A caring and patient partner. She knows about everything that has happened to me, and she'll point out that I'm behaving irrationally without judging me for it
- Exposure to "normal" people and family dynamics. My partner's family is well adjusted, loving, and wholesome. It took me about two years before I could actually believe that any of that was true. Once I did, it was easier to trust strangers as well. The idea that people will simply ask how your day was without ulterior notices was one of the most alien concepts I've ever experienced.
- Highly focused therapy. If you're around a toxic person (or people) during your formative years, it can really fuck up your sense of self, and self worth. It causes you to develop a lot of behaviors and reactions that were adaptive in that toxic environment, but are highly maladaptive outside that environment. Be careful if you go this route. A lot of assembly-libe practicioners try to tell you that you have anxiety and send you on your way with instructions to count five things you can smell before popping an Ativan. That doesn't really help.
I don't know if it helps, but I hope it does.
birb_cromble
6d ago
Apparently it's somewhat vulnerable to prompt injection as well.
birb_cromble
6d ago
Most of the incapable models too, from what I've seen of internal systems at client sites.
birb_cromble
6d ago
30 year Treasury yields are popping off
The longer-dated 30-year Treasury bond yield was last trading more than 3 basis points higher at 5.183%. It briefly hit 5.197% during the session, marking its highest level since July 2007.
The 10-year U.S. Treasury note yield — the key benchmark for mortgages, auto loans and credit card debt — was up 4 basis points to 4.667%. Earlier in the session, it climbed to 4.687%, or its highest level since January 2025
This doesn't seem like a great sign. It does make me wonder what kind of risk premium you'd accept before buying a 30 year right now. My gut feel, given current conditions, is that 5.2% is too low. I might start thinking seriously about it at 6%, but if we hit 6%, I think we'd have enough other problems that I might not have the money to spend on one.
More broadly, I'm getting concerned about stagflation. Inflation is persistently coming in above targets, consumer sentiment is in the shitter, and outside data center construction, the economy has been more or less flat for about six quarters now. Am I being overly pessimistic here?
birb_cromble
6d ago
Taking a long position like you are is not comparable to your suggestion of a short. Shorts have uncapped risks and a much more specific time horizon. "The market can remain irrational longer than you can remain solvent" is much more true for shorts. There were people who shorted tech stocks in the 2001 bubble and went bankrupt because they missed the crash by few months. There were similar people during the housing crisis. That doesn't mean they were directionally wrong - it means that timing is hard.
birb_cromble
6d ago
The biggest issue was the fact that I was doing rotations and mirroring on images that were too big to fit into memory all at once. Not only did I have to learn the math, I also had to figure out how to do it in chunks. The tiffs were tiled. The jpegs were not. It was not a good time.
birb_cromble
7d ago
Oh believe me.
I didn't go into engineering for a reason.
birb_cromble
7d ago
I work in software and I was doing a bunch of image processing on tiffs and jpegs.
It probably would have been easier if the project didn't also have a tight deadline, and my manager at the time wasn't also implying that my job was riding on it.
birb_cromble
7d ago
Learning Latin was bad enough. Please don't make me go through another classical language.
birb_cromble
7d ago
Vampire the masquerade was a big nerd thing at the time, especially in the artistic side. Anne Rice was still taken seriously too. Horror in general was a surprisingly big deal then compared to now.
Somebody introduced me to Warhammer for the first time in the 90s. Thank God I didn't take to it.
In the 90s, the nerd/punk overlap mirrored the nerd/metalhead overlap of the 80s. The live music scene was going through something of a golden age with the festivals starting back up in earnest (Lollapalooza, Lilith, HFStival, Woodstock 99).
Cell phones existed, but not everyone had them and they didn't work well. As I write this, how much of this 1980s nostalgia is a top-down consensus campaign by writers who just don't want to deal with how cell phones negate 90% of the easy ways to create danger and tension in a narrative?
birb_cromble
7d ago
Good luck teaching yourself matrix math, complex variables, calculus, circuit theory and laplace analysis on the job.
I had to teach myself matrix math on the job. 0/10 - would not recommend.
Anecdotally, I'm seeing a lot more of that around me. Punk is making a raging comeback.
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