Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Single best idea, We'll be quick today. CPI report. Lots
Speaker 2: of good bank earnings as well. Secretary Bessett and conversation
Speaker 2: with John Farrell always interesting, particularly on tariffs. We had
Speaker 2: a really interesting and eclectic show. Barry Ridholds joined, of
Speaker 2: course out with his acclaimed book How Not To and Vast,
Speaker 2: and he went all Greek letters on us. He mentioned
Speaker 2: alpha in beta. There are different Greek letters that set
Speaker 2: up the dynamic of our time series moves. Beta is
Speaker 2: your movement relative to a core index. If you have
Speaker 2: a beta under one, you're not as moving as the SPX,
Speaker 2: If you have a beta over one, you're moving more
Speaker 2: than the SPX. Standard ports five hundred elphas. Just making
Speaker 2: money here is Barry Ritholtz. I'm not losing money.
Speaker 1: Stockpickers, other than the handful of the half a dozen
Speaker 1: people we all know, our household names tend to underperform
Speaker 1: a broad index. So you can't get alpha if you're
Speaker 1: not at least starting with beta. So if you want
Speaker 1: to make the core of your portfolio a broad index,
Speaker 1: and then you want to decorate that tree with specific
Speaker 1: stocks or specific sectors knock yourself out. But to strictly
Speaker 1: focus on picking stocks and guaranteeing that, hey, maybe this
Speaker 1: year I'll out perform, maybe this year will underperform seems
Speaker 1: like an excessively risky strategy. Better to at least guarantee
Speaker 1: yourself what the market's going to give you. If you
Speaker 1: want to try and build on that.
Speaker 2: Go ahead. I'll editorialize off that brilliance from Barry Ritholds.
Speaker 2: Another Greek letter's Theta. Theta is for the time change,
Speaker 2: and of course that's the X axis on any chart.
Speaker 2: The more out your investment is on theta, the less
Speaker 2: alpha you want to do. And what Berry's saying is
Speaker 2: on a four to oh one k figure out the
Speaker 2: index you like best, etc. Etc. And stick with it.
Speaker 2: There's a thing called our squared, which we don't talk
Speaker 2: about in July. But the answer is get your basic
Speaker 2: investment in gear and then you can comfortably do Bolt
Speaker 2: lines mister Ridhold suggesting you'll find alpha with quality investments
Speaker 2: wrapped around that foundational beta support. I'm exhausted after all
Speaker 2: of that, never exhausted to talk to Gene Monster of
Speaker 2: deep Water Asset Management. There's a whole different change coming
Speaker 2: on AI. I've really noticed it just in the last
Speaker 2: say two months, a more nuanced discussion Monster an artificial intelligence.
Speaker 3: It turns out that each of these models, with the
Speaker 3: exception of Lama, Lama is pretty weak. And so but
Speaker 3: if you look at the other four primary models, they
Speaker 3: all have kind of different strengths. And so ultimately, is
Speaker 3: that I think of AI as more of like a personality,
Speaker 3: is that the world isn't going to be centered on
Speaker 3: one personality. We won't want that, and so each of
Speaker 3: these models has a slightly different personality and slightly different strengths.
Speaker 3: And so that's what we are seeing is if you're
Speaker 3: gonna say, what's like the best model kind of putting
Speaker 3: everything all together, it's probably open AI GPT today, and
Speaker 3: then Rock and Gemini kind of close behind.
Speaker 2: Gene Monster there as we get to the technology season.
Speaker 2: He was a little cautious here on the opportunities for Microsoft.
Speaker 2: I think that was a surprise of the interview. Look
Speaker 2: for that interview in its entirety out at Bloomberg dot com,
Speaker 2: on our podcast, on Apple, on Spotify, and on YouTube podcasts.
Speaker 2: This is a single best idea