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Can Kensho Bring Google Style Search To Stock Picking?

Stashed in: Peter Thiel, Warren Buffett, @paulg, Innovation, Investing, Startup, Silicon Valley, @mikejudge, HBO

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Kensho’s software, dubbed Warren (as in Mr. Buffett), offers up a simple Google-like text box into which you can pose very complex questions–all in plain English. Stuff like: Which cement stocks go up the most when a Category 3 hurricane hits Florida? (The biggest winner? Texas Industries.) Ditto for defense stocks when North Korea fires a test missile? (Raytheon, General Dynamics, Lockheed Martin.) Which Apple supplier’s share price goes up the most when the company releases a new iPad? (OmniVision, which makes the sensors in the iPad camera.)

Teams of hedge fund analysts can spend days answering these kinds of questions, assuming they can find all the data. Out of the box Warren can find answers to more than 65 million question combinations in an instant by scanning more than 90,000 actions such as drug approvals, economic reports, monetary policy changes, and political events and their impact on nearly every financial asset on the planet. Its software runs on Amazon’s Web servers in Nasdaq’s supersecure FinQloud computing network. “This essentially is giving you a quant army,” says Nadler.

If deployed widely Warren could shake up the $26 billion financial data market long dominated by Bloomberg and Thomson Reuters, and democratize the tools now closely held by Wall Street megabanks and the elite quant hedge funds like Bridgewater Associates, D.E. Shaw and Renaissance Technologies.

I've seen the best minds of my generation obsessed with arbitrage instead or creating things.

I like democratization.

It just seems more focused on money than solving the world's problems. 

On the trope of Silicon Valley startups saying their work is "making the world a better place"

I suppose some of the stuff they're doing is making the world a better place, it's just what's interesting to me is it always seems to me to be this obligatory thing that they have to throw in there, and that's why we made fun of it in the series. Some people are making the world a better place, some maybe aren't, but it's just funny that most of it, it's just capitalism. They're trying to make their companies as big and profitable as possible, which is fine, but it's always shrouded in this "we're making the world a better place" stuff. ...

HBO's Silicon Valley S1:E7 tries to make this point. 

Yeah, the scene at Disrupt where every pitch involving making the world a better place is hilarious!

I love this description:

The sesame seed scene hinges on Peter Gregory, the lead investor behind Pied Piper, the compression software startup at the heart of the show. Gregory is maybe 75 percent Thiel, 15 percent Paul Graham, and 10 percent Quora questions. Another promising startup in his portfolio begs Gregory for an "emergency capital injection" of $15 million in order to avoid shutting down. However Gregory, played by the late great Christopher Evan Welch, is more consumed by a sudden curiosity about fast food.

"Have many of you ever eaten at Bur-gur King?

Well, I was just driven past one. And while I know that their market cap is $7 billion plus, I realize I am unfamiliar with their offerings. Is it popular among your peers? Is it. . . enjoyed?

And their selection consists solely of these bur-gurs of which they are presumably king [tiny laugh]?"

Only later in the episode do we see how Gregory's circuitous neural pathways lead him from hamburger buns to cicadas to Indonesian sesame futures, which will make him a tidy $70 million, enough for a $15 million bridge loan to keep the startup alive and save its employees.

Wait, he died?!

Yes, very sad.  

"Christopher Evan Welch Died Four Months Before His Breakout Role in Silicon Valley"

Very sad. He's great.

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