Speaker 1: But knowledge to work and grow your business with c
Speaker 1: i T from transportation to healthcare to manufacturing. C i
Speaker 1: T offers commercial lending, leasing, and treasury management services for
Speaker 1: small and middle market businesses. Learn more at c i
Speaker 1: T dot com put Knowledge to Work. Hello, and welcome
Speaker 1: to another episode of The Odd Lots podcast. I'm Joe
Speaker 1: Wisenthal and I'm Tracy Alloway. So, Tracy, before we uh,
Speaker 1: before we got on here, you were joking that today's episode,
Speaker 1: if we wanted, we could probably go for three hours,
Speaker 1: or at least I could. Yeah, I'm I was joking
Speaker 1: about that, and I'm laughing right now because I think
Speaker 1: I can sense your excitement from thousands and thousands of
Speaker 1: miles away from New York. Yeah, I'm not going to
Speaker 1: deny that I'm extremely excited about today's episode, and if
Speaker 1: we didn't have time constraints, we could probably go a
Speaker 1: long time. But I really think our guest today is
Speaker 1: right in the sweet spot of some of the biggest
Speaker 1: themes that we've covered on this podcast and all the
Speaker 1: time that we've done it. Wait, so who is it
Speaker 1: and why do you think that? So we're not We're
Speaker 1: We're just gonna completely dispense with all the preamble and
Speaker 1: jump straight into the guests and just just get right
Speaker 1: into it. Well, I have a major preamble that I
Speaker 1: want to give before we get to the guests. But
Speaker 1: why don't you say who it is? Because I know
Speaker 1: that you you want to talk about him. Okay, I'm
Speaker 1: very excited. Our guest today is maybe the first sort
Speaker 1: of legit celebrity that we've had on the Odd Lots podcast.
Speaker 1: His name is Hikaru Nakamura. He is one of the
Speaker 1: top chess players in the entire world right now. He's
Speaker 1: rated around number seven. I believe he he was a prodigy,
Speaker 1: he earned his he became a grand master at age ten.
Speaker 1: If Wikipedia is correct. He's mad, he's giving a face.
Speaker 1: I don't know if that's completely agurd, but very young.
Speaker 1: And in addition to being a chess phenomen he also
Speaker 1: does other stuff like trading options and at times play
Speaker 1: poker competitively. So he's just a completely sweet spot Odd
Speaker 1: Lots guest here, all right, And obviously we've had a
Speaker 1: lot of episodes about trading and investing. We've also had
Speaker 1: episodes in the past about chess and poker, so I
Speaker 1: can see how you would be very very enthusiastic about
Speaker 1: this one. Here is my major preamble for you, Joe.
Speaker 1: I know absolutely nothing about chess. In fact, I find
Speaker 1: chess extremely frustrating because whenever I play with my husband,
Speaker 1: he doesn't let me win ever. In fact, he uses
Speaker 1: that what's that thing where you win in like two moves?
Speaker 1: That's so cringe, so cringe the the scholars mate, Well,
Speaker 1: whatever it is, he's done it to me several times now,
Speaker 1: and I fall for it every single time. So everyone
Speaker 1: is just going to have to bear with me asking
Speaker 1: very very basic questions about chess. But I actually read
Speaker 1: on Hikaru's Wikipedia page as well that he has an
Speaker 1: uncommon enthusiasm for chess and is known for being far
Speaker 1: more approachable than other players of his abilities. So I'm
Speaker 1: I'm sure he's going to humor me, right, Well, I
Speaker 1: think that sounds like an ideal guest. So I say
Speaker 1: we should just get started, Karo. Welcome up, Welcome to
Speaker 1: the show. That's good to be here, Joe. So you
Speaker 1: were making a face. I said something about when you
Speaker 1: achieved grand master status? When did you become a grand master?
Speaker 1: And uh, I think it said you got there faster
Speaker 1: than Bobby Fisher did, Is that right? Yeah? So, um,
Speaker 1: so when you referred to being ten years old, that's
Speaker 1: when I became the youngest master. That's slightly lower ranking,
Speaker 1: but um, at the time, at least they had they
Speaker 1: kept that record in the Guinness Book of World Records.
Speaker 1: So when I was very young, like I was trying
Speaker 1: to get to that level and so that was important.
Speaker 1: But I became a grand master I was fifteen years old.
Speaker 1: I was about a month and a half younger than
Speaker 1: Bobby Fisher. So that made me the youngest American grand
Speaker 1: master in the world at the time. I guess that's impressive.
Speaker 1: Uh when did you so, you know, it's always sort
Speaker 1: of an interesting question with sort of young prodigies phenomens.
Speaker 1: What was the moment early on where someone or you
Speaker 1: recognize that you were on a different level than other
Speaker 1: people who were learning at the same time. Well, I think, um,
Speaker 1: it's not so much that I was on a different level.
Speaker 1: There are there are a lot of talented young kids
Speaker 1: who played chess, and um, I think it was just
Speaker 1: that I had this this will will in, this motivation
Speaker 1: with within me to just keep trying to win every
Speaker 1: game all the time and UM. And when when you
Speaker 1: start performing, even at like eleven or twelve years old,
Speaker 1: by being strong grand masters, UM, it certainly shows that
Speaker 1: you have talent and and it's it's a matter of
Speaker 1: taking that talent and just keep keeping up and keep
Speaker 1: going forward with it and UM. And basically, I would
Speaker 1: say from the time I was about fifteen, I had
Speaker 1: a certain inclination that I might become a professional chess player,
Speaker 1: but it wasn't until I was probably nineteen or twenty
Speaker 1: that that actually came to fruition because I've had a
Speaker 1: lot of many other interests in my life, so there
Speaker 1: there have been many other things that I've I've been
Speaker 1: doing with my time as well. Was chess something that
Speaker 1: you were naturally attracted to at a young age? And
Speaker 1: you know, if so, what did you like about it? Well?
Speaker 1: I think when when you think about chess, you hear
Speaker 1: a lot of stories about these kids who are just
Speaker 1: great from the time that they first started playing. It's
Speaker 1: just they're they're just amazing and they just win every
Speaker 1: game the start. UM. Whereas for me, that certainly wasn't
Speaker 1: the case when I when I started out playing my
Speaker 1: first tournament, for example, I played four games and I
Speaker 1: lost every single one, and the first year that I
Speaker 1: played chess, I did not have many great results, and
Speaker 1: my parents actually stopped me from playing for about six months.
Speaker 1: And it was only when I came back that that
Speaker 1: some something clicked and I just happened to start winning games,
Speaker 1: um and then from there it just kept, you know,
Speaker 1: I just kept going forward. But certainly it's not something
Speaker 1: that I had a natural talent for, and actually most things, um,
Speaker 1: I don't seem to have a natural talent, which in
Speaker 1: a way, I think is a good thing, because I
Speaker 1: think the harder you have to work for something, um,
Speaker 1: the better you become at it. And when you hit
Speaker 1: the when you hit the wall, you kind of you
Speaker 1: you keep trying, you find a way to persevere. Whereas
Speaker 1: there there have been a lot of other kids who
Speaker 1: were much better than I was when they were young,
Speaker 1: but it's just it was a straightforward path, and so
Speaker 1: they just became really good, really quickly, and then at
Speaker 1: a certain point they hit the wall and they didn't
Speaker 1: know how to how to go from there because they
Speaker 1: just couldn't couldn't improve. And I basically had to learn
Speaker 1: how to improve from the very start. So I think
Speaker 1: it's it's uh for me at least, it's been very
Speaker 1: useful that I don't have a natural talent for a
Speaker 1: lot of things. Talk about that a little bit more
Speaker 1: breaking through because I think had something a lot of
Speaker 1: people experience and all kinds of endeavors where maybe they
Speaker 1: hit a wall for their talent or they can't figure
Speaker 1: out how to take it to the next level. What
Speaker 1: was it? I mean, anyone could say you have to
Speaker 1: work hard and concentrate, but even that often doesn't do
Speaker 1: it for a lot of people. So that process of
Speaker 1: figuring out your problem, solving it, and actually being able
Speaker 1: to make material gains in your improvement, what did that entail? UM?
Speaker 1: I mean obviously working hard, I mean it is a
Speaker 1: big part of it, but I think in general it's
Speaker 1: just you know, believing, believing in yourself, believing in the
Speaker 1: process no matter what. UM I think. There there were
Speaker 1: many times when I stopped, stopped improving, and and one
Speaker 1: one good example was when I was about seventeen years old.
Speaker 1: I had become a really strong grand master. I was
Speaker 1: top one hundred in the world, but I was stuck
Speaker 1: around fiftie in the world, and for a period of time,
Speaker 1: I went to college I quit chest for for about
Speaker 1: seven to eight months, um, and just by being away
Speaker 1: from it. When I came back, of course I i
Speaker 1: started working hard again, but I just learned how to
Speaker 1: enjoy it. And I think it's it's important that besides
Speaker 1: the hard work that you have to you have to
Speaker 1: enjoy it. You have to really be into and be
Speaker 1: passionate about it, because otherwise, uh, otherwise you're just not
Speaker 1: going to go anywhere. And um, I think I think
Speaker 1: for me it was it was just learning how to
Speaker 1: enjoy it again and kind of like remembering what the
Speaker 1: whole point of it was in the first place, which
Speaker 1: is you know, it's a game, but you you want
Speaker 1: you want to have fun, you want to do well,
Speaker 1: but just enjoying enjoying everything about it. How did you
Speaker 1: actually turn professional? And how does the business of being
Speaker 1: a professional chess player actually work? Like? How are you
Speaker 1: rewarded for playing games? Are there sponsorships? How do you
Speaker 1: make money? So? Yeah, so chess, um, it's it's one
Speaker 1: of those fields where it's very much a meritocracy, so
Speaker 1: it's all based on your results and going professional. It's
Speaker 1: not like like a major sport, for example, where you
Speaker 1: know a team drafts you or something along those lines. Basically, uh,
Speaker 1: you just decide on your own to just devote your
Speaker 1: life to laying chess and um, and they're there are
Speaker 1: people in the world who would consider themselves professional chess
Speaker 1: players who are who are not even grand masters. So um,
Speaker 1: there there are. There are a lot of different ways
Speaker 1: of defining a professional. But UM, I would say that
Speaker 1: probably the top twenty five thirty players in the world
Speaker 1: make a very good living playing it. Um in large
Speaker 1: part because the major events with big sponsors, UM, they
Speaker 1: are invitational only, so you have maybe the top ten,
Speaker 1: top fifteen players in the world and in some order
Speaker 1: who are invited and therefore, um, outside of that, it's
Speaker 1: very hard. Usually you go from tournament to tournament, country
Speaker 1: to country just trying to earn a living, and it's
Speaker 1: it's very difficult, which is why there are a lot
Speaker 1: of people who I think when they're younger, like in
Speaker 1: their early twenties, they try to play chess professionally, but
Speaker 1: at some point if they don't break into that top
Speaker 1: twenty five, top thirty in the world, UM, they they
Speaker 1: eventually quit. And as far as the rankings go, every game, UM,
Speaker 1: you you gain points or you lose points based on
Speaker 1: what you're elo ranking is UM and whether the opponent
Speaker 1: you're playing as lower ranked or higher ranked than you.
Speaker 1: So let's saig here a little bit, because in the
Speaker 1: intro we talked about how chess isn't your only pursuit.
Speaker 1: It's not your only passion. You're also into trading and
Speaker 1: options trading. In fact, you tweet, UM. I think you
Speaker 1: actually tweet a lot. I've seen more tweets I think
Speaker 1: about options, various options trades that you do than chess,
Speaker 1: at least as far as I've noticed. Where did that
Speaker 1: come from? UM, I've I've always had an interest in
Speaker 1: finance since I was very young. UM. When I was
Speaker 1: about fourteen or fifteen, my my my mom bought me
Speaker 1: a couple of books that it was just about general
Speaker 1: general investing UM, and I happen to read them and
Speaker 1: I found it found it quite interesting, quite fascinating, UM.
Speaker 1: How the markets work, UM, you know, in investing in companies,
Speaker 1: trying trying to make money UM over the long term.
Speaker 1: And so I kind of started with a very small
Speaker 1: account UM. And it remained that way for a long time.
Speaker 1: Primarily I was just trading in equities UM. But about
Speaker 1: a year and a half ago I started I started
Speaker 1: getting into options. Originally it was because I started looking
Speaker 1: into um uh you know, writing calls against stock that
Speaker 1: I had purchased, and from there kind of I started
Speaker 1: looking at more options strategies and a few people I know,
Speaker 1: I'm very fortunate in that regard um have been options
Speaker 1: traders professionally, and so they they've helped me along the
Speaker 1: way to you know, kind of figure out how how
Speaker 1: to learn strategies and go from there. This might be
Speaker 1: a slightly random question, but is there any direct relation
Speaker 1: between what you do when it comes to chess and
Speaker 1: the way you trade options. I think one of the
Speaker 1: main things is not just options, but markets in general,
Speaker 1: is um that chess players tend to be very analytical.
Speaker 1: And I think that when you're looking at the markets,
Speaker 1: whether it's options, whether it's equities, no matter what the
Speaker 1: time frame, you have to be analytical. You have to
Speaker 1: look at it from a perspective of you know, planning ahead,
Speaker 1: trying to figure out what can go right, what can
Speaker 1: go wrong? What are what are the very scenarios? UM.
Speaker 1: It's much with options. You know, if you're if you're
Speaker 1: doing um, you know, say like a a spread for example,
Speaker 1: or if you're doing like you know, ratios or just
Speaker 1: straight you know, calls or puts um trying to figure out,
Speaker 1: you know, based on certain events, what happens, you know,
Speaker 1: what's the breaking point assuming it you know, you don't
Speaker 1: it doesn't go uh, you know, straight up or straight down, um,
Speaker 1: and going from there. So in general, it's just being
Speaker 1: very analytical and thinking ahead. That's that's the biggest correlation there.
Speaker 1: There are, in fact, a lot of people I know
Speaker 1: growing up who actually have ended up in finance as well,
Speaker 1: and I don't think that's a coincidence. Now, a lot
Speaker 1: of people would say that there's a fundamental difference between
Speaker 1: any sort of trading activity and chess, And of course
Speaker 1: the sort of big gap is the role of chance
Speaker 1: and the role of psychology playing a much more outsized
Speaker 1: role in markets. And so you can calculate something perfectly
Speaker 1: in chess and then you can execute it, and if
Speaker 1: it's if you calculated correctly, there's nothing your opponent can do,
Speaker 1: where as all kinds of things can happen in markets.
Speaker 1: You could have the perfect strategy and then something could
Speaker 1: come out of nowhere, or there could be a bubble
Speaker 1: or some sort of panic that totally destroys the calculations.
Speaker 1: You know, there's this element that doesn't exist on the chessboard.
Speaker 1: How hard is it to shift thinking from one realm
Speaker 1: to another? For me, it's not that hard. And and
Speaker 1: actually it brings up something else that I'm kind of
Speaker 1: curious about, which is I've actually thought that trading is
Speaker 1: a little bit closer to poker in some ways from
Speaker 1: that standpoint, and um, I'm a little bit curious to
Speaker 1: kind of try it out because originally I played, I
Speaker 1: played some poker, and then then then I eventually got
Speaker 1: into trading. So it's kind of like, because I was
Speaker 1: a strong chess player, I couldn't handle the chance element
Speaker 1: in poker, whereas I seem to handle handle the chance
Speaker 1: and the risk management much better in trading. So I'm
Speaker 1: kind of curious to say, like, go from this and
Speaker 1: then play some poker again soon and see if see
Speaker 1: if it changes, because that is a very big difference.
Speaker 1: That that is. Uh, the biggest difference is that in chess,
Speaker 1: if you play well, um, I mean I would say
Speaker 1: probably at the time something good will happen. You might
Speaker 1: not win the games. Your opponent plays very well but
Speaker 1: you aren't gonna lose if you make, say, forty good
Speaker 1: moves in a row, and so therefore that that is
Speaker 1: a big difference. But for me, UM, I've I find
Speaker 1: that I don't have that much difficulty switching and making
Speaker 1: just straightforward decisions. UM. For me, it seems much more
Speaker 1: logical actually with trading that it does with chess in
Speaker 1: a way. Yeah, So I have to say, UM, poker
Speaker 1: is probably the analogy that we hear the most when
Speaker 1: it comes to trading. Uh. And you said you played
Speaker 1: a little bit of poker in the past. Did you
Speaker 1: find it more difficult than chess or can you kind
Speaker 1: of walk us through what your performance was like on
Speaker 1: that front. Yeah, I found a poker quite difficult. And
Speaker 1: it's for the exact reason that you would think that
Speaker 1: the trading should be difficult compared to chess, which is that, UM,
Speaker 1: I felt like I was making a lot of the
Speaker 1: right decisions more often than not, but the results were
Speaker 1: were not right. I would end up you know. I mean.
Speaker 1: The best example is when I played the World Series
Speaker 1: of Poker or the Main Event and an eleven and UM,
Speaker 1: in that event, I played tight, I played normal, normal
Speaker 1: solid poker and then at the end of the second day,
Speaker 1: and probably like the last twenty minutes, I ended up
Speaker 1: with this hand where I had kings and the other
Speaker 1: guy had a pair of eights, and uh, on the
Speaker 1: flop there was an eight and and I busted out
Speaker 1: that way despite really not doing anything anything wrong at all. Um.
Speaker 1: And that's just one example. But I think that at
Speaker 1: the time I found it very hard because again compared
Speaker 1: to chess, uh, that there is that luck. You can
Speaker 1: make all the right decisions, but then somehow you you lose,
Speaker 1: so you're all the tournament or you you know, you
Speaker 1: bust in the cash game. It's like it's a very
Speaker 1: strange feeling. Um from that standpoint. But for for me,
Speaker 1: I don't know what the difference is, but I have
Speaker 1: found with trading it's much easier for me than than
Speaker 1: than it was with poker. But of course I haven't
Speaker 1: played poker seriously in a few years, and maybe it
Speaker 1: would be an interesting experience experiment to go back to
Speaker 1: playing some poker now just to see if see if
Speaker 1: because I have this experience with trading, whether it's a
Speaker 1: little bit different. Let's take a right now for a
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Speaker 1: more at c i T dot com. Put knowledge to work,
Speaker 1: and we're back with Karu Nakamura, one of the top
Speaker 1: chess players in the entire world and therefore obviously also
Speaker 1: one of the top players in the US. We're also
Speaker 1: talking about his experience having played poker, his experience and
Speaker 1: options trading car The obvious sort of follow up is
Speaker 1: that all of these areas, whether it's poker, trading, chess,
Speaker 1: the nature of active participation has changed dramatically due to
Speaker 1: the use of computers artificial technology the top. It was
Speaker 1: probably a point or no one imagined that the top
Speaker 1: chess computers could compete with the top humans. Now that
Speaker 1: question has been changed. Obviously, computers have completely changed the
Speaker 1: way markets trade or you know, changed the balance of um,
Speaker 1: how humans interact with it. Computers are getting better and
Speaker 1: better all the time at a poker as well. Let's
Speaker 1: talk about this a little bit in chess. How have
Speaker 1: computers in your view changed the game? How have they
Speaker 1: changed your preparation? How do you see them having influenced it? Basically,
Speaker 1: I think the main thing that's changed with computers UM
Speaker 1: is that at this point in time, because it becomes
Speaker 1: so strong, you just automatically assume that they're right. So,
Speaker 1: for example, if you put a certain chess position and
Speaker 1: you have one of the computer engines analyzing it, you
Speaker 1: just trust the evaluation what it says. You know, white's
Speaker 1: whites better, whites winning, or the position is completely even,
Speaker 1: you trust it without without a second thought. Whereas in
Speaker 1: in the early days, UM saying the nineties, for example,
Speaker 1: computers could come up with evaluations were wrong and a
Speaker 1: human would still be right. A human wouldn't know the
Speaker 1: understand the position better, whereas now, UM, that's not the case.
Speaker 1: You just it's just flat out the computer's right, you're wrong.
Speaker 1: You trust what it says, period, end of story. And
Speaker 1: so because of that, Um, one of the main things
Speaker 1: that that has changed is there are a lot of
Speaker 1: positions which in the past you would have thought one side,
Speaker 1: the way they're playing is very unusual, it's dubious, it's
Speaker 1: not quite correct, it's not correct play. And because of computers,
Speaker 1: if you see a position now where there's some strange moves,
Speaker 1: the computer says it's completely fine, and you just you
Speaker 1: believe that it's not. It's not like before, whereas if
Speaker 1: I played some position against a cast brought, for example,
Speaker 1: he would just you know, he would just go, that's
Speaker 1: not good. You don't know what you're doing, your complete
Speaker 1: pots or whereas now because of the computer. Uh, he
Speaker 1: couldn't really say that, because the computer just it understands
Speaker 1: chest so so much better. And basically the main thing
Speaker 1: is that now almost any position in the game of chess,
Speaker 1: if you find the right moves, is probably okay unless
Speaker 1: you're just complete losing. There always are going to be
Speaker 1: defensive resources. So Joe and I have talked about this
Speaker 1: a number of times now. But in markets, you know,
Speaker 1: the rise of machines as well as passive investing has
Speaker 1: I think it's fair to say, given way to a
Speaker 1: sense or maybe an existential crisis for fund managers, like
Speaker 1: there's just a sense that you can never beat the
Speaker 1: market or the machines now. Um So when it comes
Speaker 1: to chess and computers, does the rise of computers just
Speaker 1: make playing chess less fun? Like knowing that a computer
Speaker 1: is all powerful and always has the right decision, does
Speaker 1: that make the game less enjoyable for you? It does
Speaker 1: at times. I think. Another another big thing that's happened
Speaker 1: in chess as you have these huge databases with millions
Speaker 1: and millions of games as well, So it's not just
Speaker 1: the computer analysis, it's also the factory of databases, which
Speaker 1: means that probably the first like ten to fifteen moves
Speaker 1: of every single game, both sides are gonna know exactly
Speaker 1: what they're doing, which means that it's getting deeper and
Speaker 1: deeper where you reach a new position where it's just
Speaker 1: the human is just you know, like I'm playing against
Speaker 1: someone else. It's it's become deeper and deeper in the game.
Speaker 1: That makes it quite a bit less fun at times,
Speaker 1: because because it's just like you, you don't play at
Speaker 1: the start. You you're just repeating whatever the computer says.
Speaker 1: And then uh, somewhere in the early middle game, somewhere
Speaker 1: around like the move in the game, you're you're starting
Speaker 1: to play the game, whereas in the past it might
Speaker 1: have been like the fifth move or the tenth move.
Speaker 1: So it just keeps getting deeper and deeper, and that
Speaker 1: that does take quite a bit of the fun out
Speaker 1: of it because it makes it a lot harder to win.
Speaker 1: But at the same time, um, it's also a challenge,
Speaker 1: and it's it's fun to to try and out prepare
Speaker 1: your opponents, to try and try and just you know,
Speaker 1: outsmart them and beat them, so it cuts both ways.
Speaker 1: So just to clarify what you're saying is you'll play
Speaker 1: games with someone and the first fifteen moves or more
Speaker 1: will be identical to numerous games that have been played,
Speaker 1: and only deeper than that will one of you have
Speaker 1: played a new move that hadn't been played before. So
Speaker 1: in theory, you know, as as a trader, in theory,
Speaker 1: you shouldn't be able to make money trading. I mean
Speaker 1: there's this whole school of thought essentially efficient markets that
Speaker 1: someone trying to do active stock selection or active any
Speaker 1: sort of active trading shouldn't really be doable, that no
Speaker 1: one has any more information or insight or anything, and
Speaker 1: that if you do make money over a period of
Speaker 1: time that it might be luck something like that, And
Speaker 1: with computers being able to research and analyze probabilities so aggressively,
Speaker 1: in theory, it should be even harder than it has
Speaker 1: been in the past to exploit inefficiencies. Why why is
Speaker 1: that an endeavor that you think you can make money in? Um, Well,
Speaker 1: I mean, to be be fair, I do them next.
Speaker 1: So it's not just I'm not a hundred percent trading
Speaker 1: I also do do pass that in a trading component.
Speaker 1: Why do you feel like it's an area that is
Speaker 1: worth your time and worth trying to beat the system?
Speaker 1: I mean I I I enjoy a challenge. I mean,
Speaker 1: to to be frank, I enjoy a challenge. On It's
Speaker 1: quite difficult. It takes a lot of time, a lot
Speaker 1: of a lot of work, and even then you still
Speaker 1: aren't always going to be right. Um. I mean I
Speaker 1: wasn't right this morning on caterpillar for example. But um,
Speaker 1: but but in general, uh, you know, I think, um,
Speaker 1: I really, I really enjoy the process. So maybe over
Speaker 1: the long run it's not going to pan out, But
Speaker 1: but I enjoy the process, and I've been successful in
Speaker 1: the past year. Wait, what was your caterpillar trade? Oh?
Speaker 1: I was for some reason, I was expecting, uh, expecting
Speaker 1: them to go down. I did a put spread on them.
Speaker 1: I was expecting, uh, because of the commodity prices for
Speaker 1: them to not uh not report and the and the
Speaker 1: stock for what it's worth is up about six and
Speaker 1: a half percent. You know, I'm letting our viewers now,
Speaker 1: I know you you probably are feeling the pain of
Speaker 1: that trade today. I just want to you know, but
Speaker 1: another thing also, uh, you know, like there's a there's
Speaker 1: another trade, for example, which I'm not doing well in,
Speaker 1: which is Tesla. But I think one thing that that
Speaker 1: I also enjoy is because I'm just a you know,
Speaker 1: a retail UH investor, is that through traveling around a lot,
Speaker 1: I get to have a different perspective on certain things.
Speaker 1: You know. It's like, um, everyone says Tesla's UH is
Speaker 1: overvalued right now, and I think I think it is.
Speaker 1: But for example, I was in Italy last week, and
Speaker 1: I was in southern Italy, no less, and I was
Speaker 1: really surprised to see that on the weekend down town
Speaker 1: there was there was some some sort of exhibition. It
Speaker 1: was for electric cars. And I think that when you
Speaker 1: see things like that, it also it also it changes
Speaker 1: the perspective a little bit. You don't have the standard
Speaker 1: standard view like I would if I'm just here when
Speaker 1: I actually get out and I see certain things, um
Speaker 1: like that or unfortunately things like in retail where you
Speaker 1: go to malls and you see, uh, nobody, nobody there.
Speaker 1: I mean, I think I also find that to be
Speaker 1: one of the advantages as well of just being being
Speaker 1: who I am, traveling around a lot, I get a
Speaker 1: lot of different perspectives and I think that does help
Speaker 1: me with trading. Tracy and I were in a Hong
Speaker 1: Kong a little over a year ago, and I remember
Speaker 1: being pretty stunned by how many Tesla's were on the road.
Speaker 1: So I know what you mean in terms of getting
Speaker 1: out and being uh, you know, having feeling like you
Speaker 1: have a new piece of information that you didn't have before. Yeah,
Speaker 1: I mean, because I think it's like I've traveled around
Speaker 1: the US a lot, but I mean, if you go
Speaker 1: to somewhere in the middle of the country, I mean,
Speaker 1: one place where I've spent a fair amount of time
Speaker 1: would be St. Louis, I mean, you don't see Tesla's.
Speaker 1: I don't think I've seen a single Tesla when I've
Speaker 1: been out there. I've seen Tesla's, you know, I'll see
Speaker 1: them in New York or San Francisco or Florida, but
Speaker 1: never in the middle of the country, despite traveling around
Speaker 1: a lot. So it's I think, uh, it's it's quite
Speaker 1: nice to have that extra perspective, that extra viewpoint for um,
Speaker 1: for for making possible trades. Yeah, I think research and
Speaker 1: data is clearly of growing importance for trading and investing.
Speaker 1: And Joe and I we've talked about this on the
Speaker 1: show before as well. But this idea that we have
Speaker 1: news sources of proprietary data now like you know, you
Speaker 1: have hedge funds that have access to satellite data that
Speaker 1: shows which factories in China are manufacturing a lot, and
Speaker 1: that kind of throws up some questions about data inequality
Speaker 1: in the market. I'm just wondering when it comes to chess.
Speaker 1: You mentioned the idea that you know, you have these
Speaker 1: big databases that show all the moves in thousands and
Speaker 1: thousands of various games of chess. Do certain people have
Speaker 1: better databases or better computational power when it comes to that, Uh,
Speaker 1: In terms of database is known. In terms of computational power,
Speaker 1: certainly there there is a difference because some people will
Speaker 1: spend some extra money and go out and buy supercomputers
Speaker 1: or just have clusters of various computers altogether. Um, And
Speaker 1: I think when I say that not, I would say
Speaker 1: not all the top players have that. So there there
Speaker 1: are some computational advantages if if you, you know, spend
Speaker 1: the money. Obviously, this whole debate about humans versus computers
Speaker 1: or computers augmenting the ability of humans is it has
Speaker 1: much broader macro implications for the economy. This is an
Speaker 1: endless source of debate about whether humans will have any
Speaker 1: jobs to do, or whether there will be a few
Speaker 1: people with jobs programming computers and the rest of us
Speaker 1: will be unemployed and living on a drip of soilent
Speaker 1: and basic income check or something like that. I'm curious,
Speaker 1: you know, you whether through the chess experience, because I
Speaker 1: think in chess there's two things. There's man versus computer chess,
Speaker 1: but also chess or computers. As you've said, aiding your play,
Speaker 1: whether you have some perspective on where you see sort
Speaker 1: of the future of work and the future of human ingenuity. Well,
Speaker 1: the first thing that I'm gonna say is actually on Chustell.
Speaker 1: One of the really weird things is that when humans
Speaker 1: play against humans most games and in a draw, it's
Speaker 1: something like six of games and in a draw. But
Speaker 1: when you have computer programs playing against each other, there
Speaker 1: are a lot less draws. Most of the games are decisive,
Speaker 1: which should not make any sense whatsoever, because you figure
Speaker 1: the computers. Again, what is the difference between one computer
Speaker 1: and another computer? Um, And I'm not a computer guy,
Speaker 1: so I can't really explain it. But It's kind of
Speaker 1: amazing when you think about it. That like when two
Speaker 1: computers that should be the same same computational power and
Speaker 1: ability they play, one computer wins, which I think bodes
Speaker 1: very well for the future of chess UM in general.
Speaker 1: But us as far as the world UM, I don't know.
Speaker 1: It's it's hard to say because UM. I actually was
Speaker 1: was down in Florida recently. UM and there's this this
Speaker 1: I T company which builds UM builds various platforms through
Speaker 1: AI UM and using bit bit chain technology. And uh,
Speaker 1: certainly jobs are going to disappear with AI going forward.
Speaker 1: But at the same time, you also need people to
Speaker 1: train and build build these platforms and and and everything.
Speaker 1: And uh, like when I was in Florida, there were
Speaker 1: a lot of a lot of kids coming straight out
Speaker 1: of college who are doing this. So I think jobs
Speaker 1: are certainly going to disappear. I don't know if it's
Speaker 1: the end of the world, but I mean, I think
Speaker 1: going forward, there will probably have to be some sort
Speaker 1: of a shift in terms of jobs, job skills and
Speaker 1: and all that, because certain jobs like I think being
Speaker 1: a mechanic for example, UM are just gonna simply vanish
Speaker 1: over the next ten to fifteen years. It's really odd
Speaker 1: that games played between computers are more decisive than games
Speaker 1: played between humans. But on some level, I guess if
Speaker 1: you're a chess spectator, that would be more desirable, right, Like,
Speaker 1: would you ever get a situation where we all go
Speaker 1: to chess tournaments and we just watch one robot play
Speaker 1: another robot? Um? I I don't know. Maybe if that happens,
Speaker 1: I'm not gonna be playing chess a better better just
Speaker 1: to do something else all the time. Um, But yeah,
Speaker 1: I think you know that that that's actually a big,
Speaker 1: big problem with chess, for example, is because the the
Speaker 1: database has become so so good in the players have
Speaker 1: also just become so good through learning from the computers.
Speaker 1: The margin of difference is so small that most games
Speaker 1: do end and draws, and for spectators that's not exciting
Speaker 1: at all. Um. So there have to be some changes
Speaker 1: in chess, and I think it's a it's if you
Speaker 1: look at it, that's, you know, a microcosm of the
Speaker 1: bigger picture as well. Do you ever worry that? Like,
Speaker 1: so there's one At one point when people thought the
Speaker 1: chess that computers would never be able to compete with humans.
Speaker 1: There was obviously this view that there was something in chess,
Speaker 1: or there's something in poker or any of these other
Speaker 1: games that required an intuitive, creative element that could never
Speaker 1: be programmed into the computer. And then of course computers
Speaker 1: don't have any creativity or intuition, but they do have
Speaker 1: raw calculation power, and it turns out that that's enough
Speaker 1: to make them really good at chess. Do you ever
Speaker 1: worry there's like something unromantic about it, in the sense
Speaker 1: that it turns out that sort of intuition and creativity
Speaker 1: and these sort of skills that we think of as
Speaker 1: innately human maybe aren't worth very much. Yeah. I think
Speaker 1: it's it's a little bit depressing, you know. For me actually,
Speaker 1: like Caspar Lost a Deep Blue, it was already I
Speaker 1: think probably twenty years ago now, so I think there's
Speaker 1: ninety six, wasn't it. It was? Yeah, I remember being
Speaker 1: there and like at that point, like we had started
Speaker 1: to accept the computers are better, and like for me
Speaker 1: it was it was so bizarre. Um. Actually, another speaking
Speaker 1: of another game was go where Uh it was it's,
Speaker 1: you know, it's more difficult than chess. You can't compute it.
Speaker 1: And then then like you have this computer just destroy
Speaker 1: this world champion. It was just like this whole weird
Speaker 1: flashback to to what happened like twenty years ago. Um
Speaker 1: so I think in a way it's sad, but um
Speaker 1: if we can still learn from computers and uh become
Speaker 1: better at various skills, and I don't think it's all
Speaker 1: all for not. I have one question, which is, if
Speaker 1: you are a human, what's your what's your number one
Speaker 1: tip for someone with a very basic knowledge of chess
Speaker 1: who is very tired of constantly losing. Just pick up
Speaker 1: a book or go online and find some some some
Speaker 1: some quick tactics, like some tactics in the first like
Speaker 1: five moves of the games, some basic tactical sequences, just tricks,
Speaker 1: play for trucks, all right, I have to I have
Speaker 1: two final questions. Uh. The first one is very closely
Speaker 1: related to tracies. I have a thirteen month old daughter,
Speaker 1: and I want her to be the next car Nakamura.
Speaker 1: Of course, what's the how would you you know? I'm
Speaker 1: not just looking for technical tricks, but I want to
Speaker 1: turn her into a great chess player one day if
Speaker 1: she wants to be. What's the best way to uh
Speaker 1: start training her? Well, nowadays it's it's so easy, um.
Speaker 1: I mean just going online and on any of the
Speaker 1: various chess sites, just just studying tactical sequences um or
Speaker 1: just looking at various games. I mean, there's so much
Speaker 1: information out there that it's not hard to get started,
Speaker 1: um by by any means. As I said before, there
Speaker 1: are a few a few different chess sites like chest
Speaker 1: dot com. I think it is probably the main one
Speaker 1: where you can just go get a free account and uh,
Speaker 1: look at games or do some tactics and and that's
Speaker 1: the easiest way to get started. All right, I'll sit
Speaker 1: here in front of the computer today and this show
Speaker 1: you know longer with the chess dot com account by
Speaker 1: your one year older book. Yeah, I was gonna say that.
Speaker 1: That's another thing, is like when I became grand master
Speaker 1: at fifteen, that was a big deal. That was quite
Speaker 1: young at the time. But nowadays they're there are kids
Speaker 1: who are becoming grand masters at uh twelve or thirteen.
Speaker 1: So it just keeps getting younger and younger and uh
Speaker 1: and and again who knows where that's going to lead
Speaker 1: as well? I have one other question. So I used
Speaker 1: to be I'm not very good at chess, but I
Speaker 1: used to play a lot when I was in college,
Speaker 1: and that was I graduate in two thousand and two,
Speaker 1: so you're probably like early teens at that point. And
Speaker 1: my friends and I who played, we were aware of you.
Speaker 1: So it's very exciting because we knew about this young guy,
Speaker 1: Kara Nakamura was becoming one of the best in the world.
Speaker 1: And I yesterday I texted a friend and I said, oh,
Speaker 1: we have Nackamara on the podcast, and he was really excited.
Speaker 1: But he wants to know you have a prediction for
Speaker 1: the two thousand eighteen Chess Olympiad because I know the
Speaker 1: US one in its pretty extraordinary. That was in Buku
Speaker 1: and Azerbaijan. How's it looking for we? We should be
Speaker 1: the favorites. Uh, I mean, the one thing I will
Speaker 1: say is it felt way too easy winning this last
Speaker 1: time in Azerbaijan, So there's there's some kind of, uh,
Speaker 1: there's this weird feeling that like somehow if we do
Speaker 1: when it's not going to be as easy as it was.
Speaker 1: So I think we're we're probably the favorites. But uh,
Speaker 1: it's also Russia, I would say, one of the two,
Speaker 1: one of the classic the classic countries, and again exactly alright,
Speaker 1: Hakaro knackermar thank you so much. Been a great pleasure
Speaker 1: to chat with you, and thanks for coming on the
Speaker 1: Odd Lots podcast. Problem. So, Tracy, I'm not gonna lie.
Speaker 1: I really enjoyed that it totally lived up to the hype,
Speaker 1: as I said at the end, and I've been following
Speaker 1: her Car's I have have been aware of her Car's career
Speaker 1: for like fifteen years now, and so it's pretty thrilling
Speaker 1: to get to chat with him. You know, I'm just
Speaker 1: reading the Wikipedia entry again and it sends it says
Speaker 1: that he is sometimes nicknamed the h bomb because of
Speaker 1: his explosive style of playing. Do you know what that means?
Speaker 1: I imagine it's aggressively, aggressively tactical and stuff. But he's
Speaker 1: still here real quickly, her Carl, what what does that?
Speaker 1: Where's that nickname come from? Yeah, it's it's just it's
Speaker 1: just being a very aggressive player, trying to win every
Speaker 1: game at all costs, from from when I was a
Speaker 1: bit younger. Well, I'm lead up. We got to get
Speaker 1: an answer to that, no, And I really sort of
Speaker 1: appreciated the perspective. I mean, you know, we sort of
Speaker 1: talk about this eternal sort of epic battle of humans
Speaker 1: versus computers and robots, and we sort of act like it's, uh,
Speaker 1: like there's this zero sum element and one is going
Speaker 1: to win out. But I like this idea that, yeah,
Speaker 1: there is of that, but then there's also this way
Speaker 1: in which computers make humans way better at doing human tasks,
Speaker 1: like being able to play a much more advanced game
Speaker 1: of chess, or being able to learn chess at a
Speaker 1: much earlier age, and now they're all these young grand masters.
Speaker 1: So kind of gave me an optimistic, kind of optimistic
Speaker 1: on that. Really I don't know, so, I mean I
Speaker 1: just kind of see like chess in some respects is
Speaker 1: kind of at the forefront of the man versus machine argument, right,
Speaker 1: and like, yes, yes, people can use computers to augment
Speaker 1: their own performance, but ultimately, when humans are pitted against computers,
Speaker 1: the computers are the ones that went out. And I mean,
Speaker 1: just going back to my experience, I get really frustrated
Speaker 1: with the game because I never ever win. And so
Speaker 1: I wonder, if you're a human constantly competing against a machine,
Speaker 1: if eventually you just give up, you know, you should
Speaker 1: really buy a booker. I'm sure you're not that you
Speaker 1: could find some local grandmasters to teach you probably you know,
Speaker 1: you know, actually try to improve it the game, yes, okay,
Speaker 1: I I will try maybe, And I will say one
Speaker 1: other thing is frustrating, is it It might be to
Speaker 1: lose every game. There's nothing more boring than winning every game.
Speaker 1: So you're actually, I think you're getting on the You're
Speaker 1: you're on the right side of the equation. Is that
Speaker 1: how the computers feel? You think they're like, oh my god,
Speaker 1: I've just won another game. They probably are on that note.
Speaker 1: This has been another episode of the Odd Lots podcast.
Speaker 1: I'm Joe Wisn't Thal. You can follow me on Twitter
Speaker 1: at the Stalwart, and I'm Tracy Alloway. I'm on Twitter
Speaker 1: at Tracy Alloway. And you can follow Hakaru on Twitter
Speaker 1: at GM Hakaru, where you can see all of his
Speaker 1: uh later. I don't know about all of them, but
Speaker 1: his chest exploits and many of his options trades, including
Speaker 1: a recent trade on Young China that apparently worked out
Speaker 1: pretty well. So thanks for listening. Put knowledge to work
Speaker 1: and grow your business with c i T. From transportation
Speaker 1: to healthcare to manufacturing. C i T offers commercial lending, leasing,
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Speaker 1: learn more at c I T dot com put knowledge
Speaker 1: to work