What we’re reading (9/8)
“We Will See More Spikes In Inflation” (The Market). “In Mr. Rogoff’s [Harvard Professor of Economics and Public Policy Ken Rogoff] view, the global financial markets are facing fundamental changes in the coming years. ‘I think we’re at a turning point. We’re entering a period where volatility is just going to be higher,’ he says. ‘We’re not going back to this world of very reliably low inflation and low interest rates.’”
“In Praise of High-Volatility Alternatives” (Cliff Asness, AQR). “Everyone knows that it’s compound returns over time that matter, and everyone knows that volatility (‘vol’) is a drag on compound returns. E.g., 30% up and then 30% down is 9% down; 50% up and 50% down is 25% down. And, to go to extremes, one -100% means compound returns are -100% forever (there’s no compounding your way out of Hades). But there’s a caveat that often gets left out. What everyone knows is true is only true if we are discussing an investor’s whole portfolio. If anyone believes that only compound returns matter for the components (I’ll call these ‘line items’) of the whole portfolio, particularly modest-sized line items, particularly diversifying ones, then they are actually wrong.”
“Apple Looks To AI To End iPhone Slump” (Wall Street Journal). “Will artificial intelligence help Apple sell more iPhones? That question looms over the tech giant Monday as it holds its annual fall product event, where it is set to unveil a new generation of iPhones. The iPhone 16 lineup isn’t expected to have many new hardware features—beyond the usual faster chips and improved cameras. Instead, Apple is expected to promote its new AI feature, called Apple Intelligence, as a main selling point. So far, consumers have yet to embrace AI capabilities as a primary reason to upgrade. Apple’s leading smartphone rival, Samsung, has heavily promoted its latest devices’ AI capabilities. AI was only a minor selling point for carriers after the initial batch of sales, according to surveys BayStreet Research conducted at U.S. carrier stores.”
“OpenAI Is Fighting To Keep Cofounder Ilya Sutskever’s Files Secret” (Business Insider). “OpenAI apparently doesn't want anyone poking around its former co-founder’s computer. Lawyers in a high-profile copyright lawsuit between OpenAI and book authors are fighting over whose files should be subject to discovery. In a heavily redacted letter to the judge filed on Thursday in New York federal court, lawyers for the Author's Guild said OpenAI has objected to including six current and former employees as ‘custodians’ in the lawsuit. A custodian refers to someone in possession of relevant evidence that would need to be turned over during the discovery process.”
“Jittery Home Buyers Want The Election To Be Over Before They Make Their Move. ‘Nobody Knows What’s Going To Happen.’” (MarketWatch). “Fall is traditionally a slower time for home sales, but this year, buyers seem extra wary. Uncertainty over the presidential election, questions over the direction of the U.S. economy, and confusion about new rules for home-buying brought on by the National Association of Realtors legal settlement have some buyers hitting the brakes on what could potentially be the biggest purchase they will ever make. Not to mention the possibility of a Federal Reserve interest-rate cut on the horizon. Applications for mortgages fell in August to the lowest level since last October, when mortgage rates neared 8%. The decline in applications was “puzzling,” given that it followed a sharp drop in rates[.]”
