Numerai

“What they're doing is downloading a dataset, and the dataset is about, I think it's over a million rows long. So it's just millions of numbers between zero and one. You can download it, by the way, anyone can. You can just go to a website and download it. But …”

“Data science is not quant. None of these people were quants. None of them had any background in quant. They're just the types of people who can solve abstract problems to do with data.”

“Turns out I spent that 250,000 dollars in about three months and ran out of money pretty much the day of first round seeding the company as with a venture investment from Howard Morgan and Bill Trenchard.”

“In fact, our cryptocurrency is more liquid than some stocks, and so people will earn some of it, maybe they'll earn 10,000 dollars by staking on Numurai, and then they'll go to Coinbase and sell it into dollars, or they'll keep staking it on their model.”

“And that mechanism is something we pioneered back in 2017, long before most people had heard about staking.”

“They just model the data, and that's what, what's happening at Numeri, and just like Google Translate, they can be a lot better than a professional Translator on certain languages, and Numeri can be better than a professional investor.”

“If you make a mediocre model that's very uncorrelated, you can do particularly well. Because of its lack of correlation is actually helping Numeri more than a good model that's correlated with the one we already have.”

“There are now almost 2000. Three years ago, it was 40. We only had 40 features, and now it's 2000, and over that same period, the number of data scientists submitting models has grown from a hundred to five and a half thousand.”

“Well, there was a time in 2018 when NMR, our cryptocurrency, was down maybe, yeah, more than 80%, maybe 90%. And in that year, our user base doubled.”

“We get the predictions sent to us now every day, but we only trade quite slowly. So we'll only turn over the portfolio quite slowly, minimizing our market impact. And we end up holding positions for three or four months.”

“With a single model, you can get very high accuracy with that type of image detection. That's sort of like a solved problem. And therefore, why would you need to do crowdsourcing? That's a solved problem. But stock market is never solved. It's a permanent race…”

“They're giving us a signal, which is just a long vector of predictions, 5000 predictions on every stock in the universe. And we take those predictions. We compute the stake weighted average.”

“To go from 52 to 52 and a half is massive in terms of your Sharpe ratio returns, volatility. And so the fact is, it's just one of these industries where a tiny bit helps.”

“And Numeri is factor neutral. So we will have the optimizer take out country risk, sector risk, factor risk.”

“The biggest one was cracking staking. I mean, we had a period where, yes, we were getting a lot of people submitting models, but we couldn't trust them. We couldn't trust that they would keep working out of sample. We didn't even know who the people were, but …”

“Numeri has created the highest paying data science tournament on the internet. We pay out more than Kaggle does, and we've paid out over thirty million dollars since we started.”

“That's, in some ways, the opposite of machine learning, which is a path of saying, we have no idea what patterns are Real or we don't have any theory. We don't have any hypothesis, but we do have a large data set. What can we learn in that data set that will g…”

“We don't even build the models. Our data scientists do, and we don't even know what they built. Like, they might have used a neural network, or they might have done something else. We don't know.”

“If we stuck a seven day momentum feature into Numerai's dataset, the Numerai users would like it and their models would pick up on it. But coming to trade execution, we wouldn't want to trade that fast. And then we wouldn't actually make any money from that.”

“It's about 500 stocks long and 500 stocks short, and a lot of the position sizes are kind of equal weight. Some that are higher than others, but it's basically, we never have more than three percent of the fund in one name.”

“I talk about Numerize being a kind of AI version of Millennium. Millennium, they do not have all the same people they had 20 years ago working at Millennium. They have a totally dynamic system of PMs coming in and out, and that's how year over year they've pro…”

“Large language models, which is probably the most hyped thing in the world, is actually something I want to have Numeri become the best at. And I think we have a shot at it because Machine learning is so in our DNA. So I think that's something I'm excited abou…”

“We had a big conference in San Francisco called Numicon. Where we had probably the largest gathering of Kaggle grandmasters in real life ever.”