🚨 DEWEY - RISK MODEL in Spotlight 🚨 one of my favorite characters from a series I read a long time ago was an operator named Dewey Andreas. tough. smart. never quit. he was "the guy" everyone called when they had an unsolvable problem... welcome to "DEWEY" our latest risk model. the big commercial risk models start from a fixed list of named factors... lets call it ~60 industries and a dozen styles, because a person has to read them... statistical models have been around for decades, but their output is extremely hard for a person to interpret... agents don't have that problem... so RE-THINKING RISK IN AN AGENTIC WORLD ....I built v1 of Dewey, a new type of statistical risk model that lets the data decide how many themes the market actually has, and says out loud where it can't tell *we have worked really hard to expand the security master to about 5,000 names now **completely re-did our QUANT factors + added some new ones (check em out!) see descriptions for deet's ***we are now running our "GICS" internally built labelling system - I was offended by what these companies wanted to charge - so I built our inhouse version ... I think its better / more intuitive with more descriptive layers ... IF you pay a ton of money to MSCI or the other vendors let me know we can work something out ... point in time labels 2007-2026 to start DEWEY: in the video I pull up "/NVDA" in Spotlight and open the new risk view. nobody told the model what themes to look for. it refit last night on 2,900 stocks and years of returns, and NVDA's two biggest drivers are the market and a Low Quality vs. Low Volatility theme, each carrying roughly a fifth of its variance I call "NODES" the Paul view... in honor of my friend @pmje73 .. look at it isolated or vs another another from the drop down new - "Offsets"... the market accounts for about half of NVDA's variance, so over that history, shorting about $172 of the market per $100 of NVDA would have taken its volatility from 40% to 28% a year. Mag7 shows up greyed out, because Mag7 holds NVDA and you'd be offsetting NVDA with NVDA what makes it different is that DEWEY knows/LEARNS where it stops knowing things... every night it measures the point where the data can't tell a real theme from noise, and anything below that line never gets sent to an agent.. because an LLM will happily explain pure noise if you hand it some. every number comes with a range and every sentence comes from a fixed template, so whether you ask Claude or GPT, the number doesn't change for the propeller heads, including where it's weakest... read more here & details on tests we ran against open source baseline risk models: this is a critical FIRST step to our BIG REVEAL coming later in week... stay tuned... have a good week 🍪🥠🍪🥠