Richard Craib: WallStreetBets, Numerai, and the Future of Stock Trading | Lex Fridman Podcast #159

The following is a conversation with Richard Craib, founder of Numerai, which is a crowdsourced hedge fund, very much in the spirit of WallStreetBets, but where the trading is done not directly by humans, but by artificial intelligence systems submitted by those humans. It's a fascinating and extremely difficult machine learning competition, where the incentives of everybody is aligned. The code is kept and owned by the people who develop it. The data, anonymized data, is very well organized and made freely available. I think this kind of idea has a chance to change the nature of stock trading and even just money management in general by empowering people who are interested in trading stocks with the modern and quickly advancing tools of machine learning. Quick mention of our sponsors. Audible Audiobooks, Chara-Labs machine learning company, Blinkist app that summarizes books, and Athletic Greens all-in-one nutrition drink. Click the sponsor links to get a discount and to support this podcast. As a side note, let me say that this whole set of events around GameStop and WallStreetBets has been, uh, really inspiring to me as a demonstration that a distributed system, a large number of regular people are able to coordinate and collaborate in taking on the elite centralized power structures, especially when those elites are misbehaving. I believe that power, in as many cases as possible, should be distributed, and in this case, the internet, as it is for many cases, is the fundamental enabler of that power, and at the core, what the internet and its distributed nature represents is freedom. Of course, the thing about freedom is it enables chaos or progress or sometimes both, and that's kind of the point of the thing. Freedom is empowering but ultimately unpredictable, and I think in the end, freedom wins. If you enjoy this podcast, uh, subscribe on YouTube, review it on Apple Podcasts, follow on Spotify, support our Patreon, or connect with me on Twitter @lexfridman. And now, here's my conversation with Richard Craib. From your perspective, can you summarize the important events around this amazing saga that we've been living through of WallStreetBets, the subreddit, and GameStop? And in general, just what are your thoughts about it from a technical to the philosophical level?

I think it's amazing. It's like my favorite story ever. Uh- (laughs)

(laughs)

Like, when I was reading about it, I was like, "This is the best." Um, and it's- it's also, you know, connected with my company, which we can talk about, but what I liked about it is, like, I like decentralized coordination, and looking at the mechanisms that these r/WallStreetBets users use to hype each other up, to get excited, to prove that- that they bought the stock and they're holding. Um, and- and then also to see that how big of an impact did that decentralized coordination had. Um, it really was a big deal.

Were you impressed by the distributed, uh, coordination, the collaboration amongst, like, I don't know what the numbers are. I know Numerai's looking at the data. After all of this is over and done, it'd be interesting to see, like, from a- a large-scale distributive system perspective to see how everything played out, but just from your current perspective, what we know, is it obvious to you that such incredible level of coordination could happen, where a lot of people come together in a distributed sense, there's an emergent behavior that happens after that?