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The Sunday Drive - 12/17/2023 [#89]

👋🏼 Hello friends,

Greetings from Saratoga Springs, NY! Let's take it easy and enjoy a leisurely Sunday Drive around the internet. 


🎶 Vibin'

With just a little over a week until Christmas, lots of folks are starting to reach the point of Holiday music fatigue. Well… NOT ME!

It’s not really a traditional Christmas tune, but this week I’m vibin’ to one of my favs. I hope you enjoy Please Come Home for Christmas by The Eagles.


💭  Quote of the Week‌

It always seems impossible until it's done.
– Nelson Mandela


📈  Charts of the Week

Source: Tier 1 Alpha

The above table highlights the performance of various equity indices YTD through 10/31/2023. The monumentally strong performance of the Nasdaq 100 (QQQ) as compared to the small cap indices has been breathtaking and unprecedented. The takeaway up to that point was BIG = GREAT, small = BAAAAAD.


Source: Tier 1 Alpha

The table above shows the dramatic reversal in the performance of the Russell 2000 small cap index from its 1 year lows through 12/14/2023. This is especially true as compared to prior small cap cycles.

While the beginnings of small cap rotations can be quite powerful and swift, cycles of small cap outperformance have historically tended to have some staying power too.

I continue to be of the view that as interest rates continue to decline, the equity markets should hold up well in 2024, but the smaller cap parts of the market will continue to play catch up as compared to their mega-cap counterparts outperforming them, perhaps by quite a lot.


🚙 Interesting Drive-By's

This week we have articles on UPenn, AI, and medical research:

💰 The UPenn Controversy and a Wall Street M&A Deal - from Liz Hoffman

In the weeks before Scott Bok abruptly resigned as chair of Penn’s board of trustees, Wall Street critics of the university’s handling of antisemitism on campus were quietly planning to complicate Bok’s day job, as CEO of investment bank Greenhill, in an effort to pressure him, people familiar with the matter said.

Greenhill, which floundered for years under Bok’s leadership, was sold earlier this month to Mizuho, the big Japanese bank. But before the deal was completed, Wall Street executives had been discussing an idea: Buy shares of the company and petition a Delaware court for internal Greenhill records related to Bok’s tenure as Penn’s board chair, people familiar with the discussions said.

It never went anywhere, and the deal was completed on schedule Dec. 1. But it shows the internecine ideological battles on Wall Street right now, whose executives — many of them major university donors — have been the loudest critics of schools including Penn and Harvard. [link]

🤔 The Automagical Future: How AI is Transforming our Daily Lives - from Peter Diamandis

Note: The next in the AI blog series from Dr. Diamandis which I’ve been sharing recently.

What happens when embedded intelligence is everywhere?

Imagine a physical and digital world that is continuously customizing itself to meet your preferences—a world that is “automagical.”

What will this feel and look like?

For example, enter any room and the lighting, music, and temperature are adjusted to your needs. Or enter a store to shop for an item, or a restaurant to get your favorite meal, and if you have “self-ID” turned on, the store’s AI knows who you are and what you’re looking for, having it ready to save you time.

Come home after a stressful day at work, and your preferred drink is waiting for you while your favorite comedian is playing on your wall screen.

Your home, car and office are continuously monitoring your health vitals. And should you want to learn a new language (though instantaneous translation is now available almost everywhere), your home AI will prompt you in the language of your choice, offering helpful hints in English where needed. [link]

🩺 The Power of Prompting from the Microsoft Research Blog

Note: One of the things that interests me about AI is how it might be deployed in the field of healthcare. Though a bit technical, I found this blog post pretty interesting and it makes me want to learn more about this topic.

Today, we published an exploration of the power of prompting strategies that demonstrates how the generalist GPT-4 model can perform as a specialist on medical challenge problem benchmarks. The study shows GPT-4’s ability to outperform a leading model that was fine-tuned specifically for medical applications, on the same benchmarks and by a significant margin. These results are among other recent studies that show how prompting strategies alone can be effective in evoking this kind of domain-specific expertise from generalist foundation models. [link]

🤓 Vortex Cannon from the Science Girl on X

No day is complete until you’ve had target practice with your Air Vortex Cannon [link]


👋🏼 Parting Thought


If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em (“X” ‘em?) at me.

Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed.

‌I hope you have a relaxing weekend and a great week ahead. See you next Sunday...

Your faithful financial provocateur,