how do you differ from tinygrad?
Readit Newsfairestvalue commented on Show HN: Luminal – Open-source, search-based GPU compiler github.com/luminal-ai/lum... · Posted by u/jafioti
fairestvalue commented on OpenAI Plots Charging $20k a Month for PhD-Level Agents slashdot.org/story/25/03/... · Posted by u/miles
We're in the early days, like back when Uber offered $2.50 rides anywhere in San Francisco. They burned through tons of cash for years but had $9.8bn net income last year.
Uber and Lyft are literally the textbook examples of (local) network effects.
OpenAI is not.
fairestvalue commented on Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios · Posted by u/jjmaxwell4
Yes we've thought about them a fair bit.
We believe that in most ETFs right now the transaction costs are largely factored into either the expense ratio or the ETF bid-ask spread, exactly due to the redemption mechanism you discussed. See section titled Spread of the Underlying Securities in an ETF Basket in the following PDF and the following quote:
"If a market maker has to obtain a portion of the ETF constituents on the secondary market to then deliver into the fund as part of the basket process, the cost of acquiring those names should be reflected in the ETFs bid/ask spread — as costs are traditionally passed through to the end customer."
https://www.ssga.com/library-content/pdfs/etf/au/spdr-au-etf...
Also we take estimated spread costs into account when running our portfolio optimization. A higher bid-ask spread as measured by past 1 month NBBO p50 spread generally gets penalized in our portfolio optimization all else being equal, although this depends slightly on what optimization setting you've chosen on Double.
Except, in practice (not "traditionally"), the cost of a sophisticated market maker to acquire these constituents is usually much less than if you or I were to trade on the market in our brokerage account. SPY's spread is only 2 pennies wide (3 bps), for example.
fairestvalue commented on Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios · Posted by u/jjmaxwell4
Ummm, have y'all thought about spread costs?
If you look at the spread of any of these ETF's mentioned (spread = ask px - bid px), you will notice that the spread is much smaller than if you were to sum up the spreads of each component stock.
That's possible because of a mature ecosystem of ETF market makers and arbitrageurs (like Jane Street).
If you buy all of the stocks individually, as it sounds like y'all's solution does, you will pay the spread cost for every. single. stock. The magnitude of these costs are not huge, but if we're comparing them against VOO's 17 bps/yr expense ratio, it's worth quantifying them.
I imagine eventually you can hope that market makers will be able to quote a tight spread on whatever the basket of stocks a client wants, but in the meantime, users would be bleeding money to these costs.
(Source: I work in market making and think about spreads more than I would like to admit.)