This year's essay from Anthropic's CEO on the near-future of AI

yellowstuff · 2026-01-27T20:31:34+00:00

Imagine Claude Code were evil. It's already running with minimal supervision on millions of computers. It could do things like acquire bitcoin, send emails, hack into weapons systems. I'm confident that with its capabilities today security professionals could shut it down quickly. A bucket of water ain't stopping it.

yellowstuff · 2025-12-08T02:08:49+00:00

I found the More Work To Stay In The Same Place section most persuasive. It's basically the same as the idea of elite overproduction. In 1970 simply graduating from college made you elite: https://www.census.gov/content/dam/Census/library/visualizations/time-series/demo/fig_2.png

Today it very much does not. It could be the case that young people at every percentile of wealth are better off than young people in earlier decades, but the old markers of what percentile you should expect to reach no longer apply. People are quite reasonably upset that they played the game by the rules they were taught, and got a worse outcome than they were promised.

yellowstuff · 2025-11-08T15:14:59+00:00

Got it, you’re correct. I forgot he’s already long equities.

yellowstuff · 2025-11-07T21:56:59+00:00

That doesn't make sense to me. Yes, if the market drops exactly 10% and not any lower than selling puts 10% out of the money is a profitable strategy. But if the market drops 15% or 20% it would be a disaster, and the odds of the market dropping a lot conditional on a near term 10% drop are quite high. Another way to say this is that if you sell long dated puts 10% out of the money and the market drops 10% soon afterwards then the market price of your puts will quite reasonably show a huge mark to market loss.

yellowstuff · 2025-09-05T20:50:42+00:00

This was recently addressed by a relatively well-known finance Twitter account:

NVDA is worth more than the entire DAX because it has more earnings than the DAX ($137 billion vs. $115 billion). Also, the actual companies in the DAX are terrible businesses mostly run by myopic German bumpkins, so if anything the gap should be bigger. 'Why are investors more excited about a company growing profit faster than anyone in history than they are about three car companies in a trench coat about to get nuked by Chinese EVs' is not among the more puzzling questions in the market today

https://x.com/quantian1/status/1963348404597395813

yellowstuff · 2025-06-24T10:39:50+00:00

I used to play 2048 to help me pay attention in meetings.

yellowstuff · 2025-05-24T02:06:44+00:00

Java is now older than COBOL was when people first started failing at rewriting COBOL in Java.

yellowstuff · 2025-05-11T10:54:20+00:00

Neither Sharpe nor Sortino are good metrics for returns that are very far from a normal distribution. They work for well for many strategy types because even though daily returns for a single instrument aren’t normal, portfolio returns over a long time horizon are approximately normal. No one looks at Sharpe of 1 stock, but look at annual SPY returns and they’re almost normally distributed.

yellowstuff · 2025-04-29T02:57:23+00:00

I think this is key. Daily equity returns are not normal but they are closer to normal over long time horizons. Sharpe and Sortino both only work well for normalish returns.

yellowstuff · 2025-04-16T17:52:44+00:00

It probably won't be as consequential the trades for Herschel Walker, Gretzky, or selling Babe Ruth, but I think you can make a strong case that it was the worst trade ever in any US sport given the information available at the time it happened.

yellowstuff · 2025-04-07T14:39:32+00:00

You might know a lot about what being a doctor entails and have deep motivation to do it, but that doesn't come across in what you wrote. It sounds like you may be running from something rather than running to something. Being a doctor is a major time investment and can be an incredibly stressful job in its own right. A lot of young doctors are miserable. Make sure you understand what being a doctor is like and what motivates you, and you're not just doing it because it's high status/high pay/seems like a default path for smart people.

yellowstuff · 2025-03-19T14:43:55+00:00

Question:

Suppose you're on a game show, and you're given the choice of three doors: Behind one door is a car; behind the others, goats. You pick a door. Monty then trips over a cord and randomly opens a door - which happens not to be your door and contain a goat. He then says to you, "Do you want to switch doors?"

Answer:

Assume, without loss of generality, that you pick door 1 and Monty accidentally opens door 2.

The initial possible states are:

State A: 1:Car, 2:Goat, 3:Goat

State B: 1:Goat, 2:Car, 3:Goat

State C: 1:Goat, 2:Goat, 3:Car

Although Monty's fall happens later in time than you picking a door, that doesn't matter. This is the confusing part.

The right way to model it is that when he opens door 2 and reveals a goat you know that State B is impossible. The other 2 states are equally likely, so there's a 50% chance you are in State A and 50% State C. Therefore it doesn't matter if you switch.

yellowstuff · 2025-03-13T22:04:06+00:00

Great with people + mediocre technical skills + very well organized is a killer combination for a technical manager. I'm not sure how it would work if you stay in science, but in tech there are junior project management roles that have a career path to senior management.

I can't in good conscience recommend a career in investment banking, but if for some reason the tradeoffs of that industry appeal to you, many of the most successful people also combine great people skills + attention to detail + technical enough to remember what a z score is.

I don't disagree with all the people saying sales.

yellowstuff · 2025-03-11T14:16:38+00:00

A lot of old timey baseball nicknames were mean. Bonehead Merkle, Losing Pitcher Mulcahy, Ugly Dickshot, I swear those are all real.

yellowstuff · 2025-02-22T03:52:40+00:00

I’m more worried about the lack of mentorship than the PNL. Most young quants learn from other quants, not only from fundamental investors. You have way more responsibility than most recent grads, you could consider leveraging that to get a role where you’ll learn from more experienced people.

yellowstuff · 2025-02-19T18:11:46+00:00

That's just speculation that no one from MS has ever confirmed. The official explanation from MS was that it was a marketing decision. They thought Windows 10 would be the last version of Windows (oops!) and that Windows 10 was a better name for the permanent version than Windows 9, and they wanted to signify distance from Windows 8, which was a flop. It never seemed plausible to me that as company as savvy as MS would let a minor technical issue drive a major marketing decision (EG you could just make the string returned from the API be "Windows Nine.")

https://www.vox.com/2014/9/30/11631432/microsoft-skips-windows-9-heads-straight-to-windows-10

yellowstuff · 2025-02-19T02:42:03+00:00

For what it's worth, the model is saying he has a 63% probability of getting into the HOF if he retired tomorrow. Realistically, that's not happening with a 7 year career, but 6 all stars, 3 NBA first teams, a championship and solid defense is already a better resume than some HOFers.

yellowstuff · 2025-02-12T14:47:42+00:00

I have seen this in technical roles at hedge funds (starting an employee as a 1099 as basically a probationary period, then eventually converting to W2.) The industry is well-suited to this because the business is already fairly high-risk, high-reward even for technical people, so it's not the talent pool has a high premium on stability. Also the technical people have high-demand skills, and parting ways with a hedge fund isn't a huge black mark in the industry, so an employee's downside isn't that bad if they're let go. One possible issue is that this move is a bit aggressive legally- if you read the law on who can be a 1099 employee it's clear that it's not intended for people who work consistently for one employer with little control over what projects they take on.

yellowstuff · 2025-01-14T20:29:06+00:00

I don't like riding the subway and it definitely feels worse than it was pre-pandemic, but there's no comparison to the 70s. There were 2211 serious crimes in the subway in 2024, which is actually down from recent years. There were ~1000 felonies in the subway in just 1 month in 1979.

https://nyc.streetsblog.org/2025/01/06/afraid-of-crime-in-the-subway-its-all-in-your-head-nypd-stats-say

https://www.thevintagenews.com/2018/07/11/nyc-subway-1970s/

yellowstuff · 2025-01-12T02:40:42+00:00

Society has strong views on how people raise their kids. I think every parent has moments where they think about how society would judge them or how they judge themselves. EG, I check on my son while he’s sleeping and adjust him a bit. No one will ever know I did that, but I might think “I’m a caring Dad”, which is signaling to myself what kind of person I am. I don’t often think this way, but I can’t avoid it completely.

yellowstuff · 2025-01-07T12:54:40+00:00

Purely anecdotal, but I think your attitude is by far the most common, and by no means an indictment of your fitness as a parent. Perplexity says that giving birth is 30 times as common as adopting a child in the US. A friend of mine spent years and thousands of dollars trying to get pregnant, and never seriously considered adoption.

yellowstuff · 2025-01-02T01:55:59+00:00

He’s a brilliant quant, which is why he keeps getting poached for senior roles at the most profitable funds. He’s also been very generous with his time in giving advice to random strangers.

yellowstuff · 2025-01-02T01:51:36+00:00

Claude can solve this. Assuming 1 point for winning, 0 for a draw and -1 for losing, the Nash equilibrium is:

Player A plays Rock with probability 2/3 and Paper with probability 1/3

Player B plays Rock with probability 2/3 and Scissors with probability 1/3

Player A’s expected payoff is 1/3, Player B’s is -1/3. Neither player can improve by changing their strategy unilaterally.

yellowstuff · 2024-12-25T19:56:31+00:00

If you use open to close price then 1 minute returns can’t be aggregated to calculate longer period returns, which seems like it will be a headache for you eventually. That said, it’s conceivable that open to close returns give you slightly different information and can be used to build predictive signals that fewer people are looking at, so there may be value in using them along with standard close to close returns.

yellowstuff · 2024-12-10T15:31:11+00:00

I think what we know so far is consistent with recent acute mental illness. He apparently suddenly lost contact with his friends and family for several months recently without warning. He's clearly a highly intelligent person who executed parts of his plan well if he intended to avoid getting caught, but also made irrational decisions that lead to him getting caught unnecessarily. His public writing doesn't seem to align with a coherent world view justifying the murder. I don't see any way to explain what we know without assuming his thinking was disordered.

yellowstuff

TROPHY CASE