Bollore is one of the greatest capitalists most Americans have never heard of. There aren’t many examples of other French corporate raiders. He built up a massive business empire consisting of 457 companies over four decades. In the three decades its main holding company has been public, investors are up 40x, compared to an 8x return to France’s index. Its a story horribly neglected by English language media(most of the time). Some argue that the various holding companies are full of hidden value, others that they are on the brink of collapse. At the very least, as Muddy Waters has pointed out, you can’t model it in a spreadsheet. Here is what it looks like:
Accounting reality and economic reality are often divergent. You get interesting feedback loops from all the cross shareholdings. The Economist article takes a bit of a bearish slant
Analysts attribute over a third of Bollore SA’s Market value to shareholding in its parents; these parents are also worth around 12 billion in total. That does odd things to Bollore SA accounts. When its value falls (like last year when its shares lost 24%), that of the holding companies above it dips too. Because Bollore SA in turn owns them, its balance-sheet and income must be adjusted downwards. This then effects metrics used to calculate the value of its shares, whose fall prompts a further adjustment. Share-price rises cause upward revisions.
I would place clearing houses in the category, of important risk that not a lot of people are thinking about. Everyone knows central clearing is better(which it generally is), but ignores how clearing houses actually work. Clearing houses have offsetting positions, so they never have directional risk. However if one side of a transaction goes bust, and the clearing houses funds are exhausted, then members need to pay in.
Nasdaq Clearing’s recent Norwegian problems have put this issue on more people’s agenda. Clearing houses have outright failed in the past (Paris 1974, Kuala Lumpur 1983, Hong Kong 1987) . Post financial crisis global clearing has become increasingly centralized. If it fails the need for members to pay in could be a systemic problem. Who will clear the clearing houses when they get too big?
The collapse of Cho’s network would lead to one of Hong Kong’s most spectacular stock implosions and is now part of the biggest investigation of market malfeasance in the city’s history, an effort to expose and shut down what the regulator has called “nefarious networks.” These are groups of public companies, licensed dealers and other financial firms that “enrich themselves at the expense of unsuspecting investors,” Securities and Futures Commission enforcement head Thomas Atkinson said in an October speech revealing plans for criminal and civil action against about 60 companies and individuals. Their activities, Atkinson said, are “having a deleterious effect on our markets.”
Investors Beware: Today’s $100m + Late-stage Private Rounds Are Very Different from an IPO– From 2015, this perspective is even more true today.
Over the last few years, the late-stage (pre-IPO) market has become the most competitive, the most crowded, and the frothiest of these financing stages. Investors from all walks of life have decided that “late stage private” is where they want to play. As a result, a “late-stage” financing is no longer reserved for high-revenue, pre-profitability companies getting ready for an IPO; it is simply any large round of financing done at a high price. An unprecedented 80 private companies have raised financings at valuations over $1B in the last few years. These large, high-priced private financings are the defining characteristic of this particular technology cycle.
Some have argued that each of these companies would already be public in a prior era. Buying into such a notion is dangerous – dangerous for the entrepreneur and dangerous for the investor. Actually, very few of these companies are at a point where they could or should consider being public. Lost in this conversation are the dramatic differences between a high priced private round and an IPO. Understanding these differences is crucial to understanding the true risks in this large private-round phenomenon.
Is the paradigm that has defined investment returns for a decade coming to an end? An important question anyone with capital at risk should be asking.
Graham and Doddsville interview with Harvey Sawikin of Firebird – one of the all time greats of frontier market investing.
In the early stages, we’re looking for a few things. First, is the political environment: you want a country that ha been through political change that has made things more stable. For example, Russia had come out of a period of chaos, and Yeltsin finally established more personal control and installed a prime minister who could make things happen. We’ve seen this many times, in Georgia in 2004, and Mongolia. Second is macroeconomic stabilization. If you have a government that is determined to stabilize the economy, it’s often after a period of high inflation or when they’ve lost a war and everything is in chaos.
Someone comes in and manages to get control of the economy, and bring the inflation rate down. Third, we look for a functioning capital market that should have a few investible stocks. It doesn’t have to have a lot. You can make a lot of money on just one stock, which is what we
did in Georgia where we made 10x our money on Bank of Georgia.
In general, ETFs have proven to be a poor way to invest in emerging markets. Institutional investors who want low fees and that have played emerging markets through ETFs are starting to realize that it may not be suitable, and there’s a reason why: ETFs are market cap-weighted. Market caps tend to be the largest in state owned or state-influenced companies, which generally tend not to be managed for the benefit of minority shareholders. The top five stocks in the MSCI Russia constitute 60% of the index. You’re missing out on all these amazing companies that have smaller market caps.
(See also: Riches among the Ruins)
A lot of investors – including us – were influenced by William Thorndike’s excellent book, The Outsiders, which profiled eight CEOs with some common traits that work wonderfully at certain types of businesses. Outsiders improve operational efficiency, make opportunistic buybacks, bold M&A decisions, and so on. They work great when a business generates a lot of cash and has room to generate more. There’s a clear blueprint for success.
On the other hand, there are situations in which there is no blueprint for success – new and emerging industries or business models, for example, or trying to revive a company in steady decline. In these situations, an Outsider CEO will do more damage than good. Here, you’d rather have a Visionary/Creative CEO at the helm who inspires his or her staff, is mission-driven, and is willing to experiment with new products or services.
Limiting your concept of a “good” CEO to the Outsider archetype can lead to you missing out on opportunities in companies on their way to establishing or dramatically widening their moats.
…we are now faced with a series of peculiar ideas that draw heavily on misleading uses of the term data. They call for the monetisation of data, stating that it is valuable, and customers should be compensated for providing it. These ideas presuppose that data is some kind of commodity, and even the refutations of these positions engage with inherent differences between, say, data, which can be reused, and oil, which can’t. But the conversation doesn’t even need to reach this point.
The Radical Lucrative and Controversial Company Hiding in Steve Schwarzman’s Pocket Good profile of Blackstone’s massive GSO group. Huge force in the distressed credit space lately.
GSO was a dominant force in the massive restructuring of credit that started a decade ago, becoming a major lender to non-investment-grade companies that the banks could no longer finance with cheap money after 2008. Banks retreated to their traditional role as advisers to corporations, underwriting bonds for highly rated companies and riskless deals. That left an enticing vacuum, and many firms eagerly and profitably stepped in, including Apollo Global Management, Ares Management, TPG Capital, KKR & Co., Bain Capital Credit, and scores of smaller credit shops. GSO capitalized on being early and being part of Blackstone, yet still independent. Now firms like Apollo and Ares have become formidable competitors in huge sectors like business development companies.
The Trump Dump: War Gaming The Next China Move Makes a very important and scary point of where escalation of the trade war may go
When each side has exhausted the potential for trade-damage by tariffs (and the US has inflicted all the self-harm it can bear), if not sooner, we would not be surprised to see Mr Trump apply capital sanctions and force US Persons to dump their holdings of Chinese equities and bonds. They have potentially wide scope to do this, using the US Treasury’s Office of Foreign Assets Control (OFAC)
Side note: since sanctions are such a handy tool, trigger happy Trump has used sanctions a lot. This has created a bull market in financial compliance services, in spite of the general trend towards deregulation.
A Look at the Future of Sino-US Relations from the Historic Lens of Human Civilization One of the better pieces on this important bilateral relationship.
In the United States there are four schools of thought on China policy. Till recently, the mainstream school of thought was that of engagement. Its proponents argued that China’s market reforms were good for the United States and the international community as a whole, since they believed that economic liberalization would spill over into politics and lead to political democratization, and that China would gradually become more and more like the US. They put their faith in American soft power, believing that the US would exert a subtle influence on China. On the opposite side were the China hawks that supported the school of containment, who argued that the ideologies of the two would never be compatible as long as China remained under the totalitarian rule of the Communist Party. They believed that, as her economic power grew, China’s threat level would go from mere adversary to potential enemy. One can see that people from both camps carry a certain amount of missionary zeal that is the hallmark of American tradition. The third school was the school of pragmatism, particularly popular in the business community. The rationale behind this approach was that China’s rise has created many business opportunities for American companies. In addition, both were big nuclear states, and should stay friendly. Furthermore, closer economic ties could win China’s cooperation and support in addressing global challenges such as global financial crises, nuclear nonproliferation, climate change and counterterrorism. The fourth group was the populists, who came mostly from the lower and middle classes and helped elect Trump. Supporters of populist policy viewed themselves as primarily victims of globalization and the rise of China, citing the ills of unemployment and the hollowing-out of American manufacturing.
The Best Ideas Are the Ones That Make the Least Sense Perhaps the problem is we overrate our rational capabilities- there are simply factors our models don’t take into account.
My contention is that nearly all really successful businesses — like Dyson, Apple, Starbucks, and Red Bull — owe most of their success to having stumbled onto a psychological magic trick, even if unwittingly. But you don’t have to stumble onto it. To find that magic, you must embrace the idea that anything — from consumer behavior to people’s perception of a product — can be transformed, so long as you’re willing to think like an alchemist.
The models that dominate all human decision-making today are heavy on logic and light on magic. A spreadsheet leaves no room for miracles. But while logic may be right in the narrow sphere of physics, it is hopelessly wrong when it comes to the very different business of psychology.
We don’t value things; we value their meaning. What they are is determined by the laws of physics, but what they mean is determined by the laws of psychology. The reason the alchemists gave up in the Middle Ages was because they were looking at the problem the wrong way. They had set themselves the impossible task of trying to turn lead into gold but had got it into their heads that the value of something lies solely in what it is. This was a false assumption, because you don’t need to tinker with atomic structure to make lead as valuable as gold. All you need to do is to tinker with human psychology so that it feels as valuable as gold, at which point, who cares that it isn’t actually gold? If you think that’s impossible, look at the paper money in your wallet; the value is exclusively psychological.
All these disproportionate successes were entirely illogical. And all of them worked. In the modern world, oversupplied as it is with economists, technocrats, managers, analysts, spreadsheet tweakers, and algorithm designers, it is becoming a more and more difficult place to practice magic — or even to experiment with it. I hope to remind everyone that magic should have a place in our lives. It is never too late to discover your inner alchemist.
Dr. McHugh believes psychiatrists’ first order of business ought to be to determine whether a mental disorder is generated by something the patient has (a disease of the brain), something the patient is (“overly extroverted” or “cognitively subnormal”), something a patient is doing (behavior such as self-starvation), or something a patient has encountered (a traumatic or otherwise disorienting experience). Practitioners too often practice what he calls “DSM checklist psychiatry” — matching up symptoms from the Diagnostic and Statistical Manual of Mental Disorders with the goal of achieving diagnosis — rather than inquiring deeply into the sources and nature of an affliction
Israelis “know that you can get a terrible psychological reaction out of a traumatic battle. And they do take the soldiers out, and they tell them the following: ‘This is perfectly normal; you need to be out of battle for a while. Don’t think that this is a disease that’s going to hurt you, this is like grief. You’re going to get over it, it’s normal. And within a few weeks, after a little rest, we’re going to put you back with your comrades and you’re going to go back to work.’ And they all do.” By contrast, American psychiatrists say: “‘You’ve had a permanent wound. You’re going to be on disability forever. And this country has mistreated you by putting you in a false war.’ They make chronic invalids of them. That’s the difference.”
The Great Weirding and associated narrative collapse is, in a sense, the narratives of the industrial age reaching some sort of diffraction limit. Even the best historians of our age will not be able to handle the narrative collapse we’re living through with traditional history-writing techniques. So what are our options?
We could go grander. Bigger telescopes! This is what a lot of big history theorizing of the Sapiens variety appears to attempt. The results are kinda janky and feel like unsatisfying just-so myth-making. It is just hard to make and hold up really big mirrors to the human condition.
We could work with shorter and shorter wavelengths. I think this is roughly what intersectional identity politics is trying, and failing, to do.
Or finally, we could learn to work with our own wave-like nature, embracing diffracted identities and multitemporality
I like to think of it in terms of that old stoic line: the only way out is through. I’ve preferred the slight variant the only way through is through, because with time, there is no “out”, even though sometimes it is helpful to pretend like there is. The quantum-tunneling update to that is: the only way through is to diffract through.
That’s why we are in the Age of Diffraction. You have to interfere with yourself to get anywhere at all.
What we are seeing is that, in ultramarathons, more and more of the fatigue comes from central fatigue, which means that the brain is not able to drive the muscle, even though the muscle is capable,” says Shawn Bearden, a professor of exercise physiology at Idaho State University. Researchers in France have hooked runners up to electrodes to stimulate muscles, demonstrating they still have the ability to produce movement. “There’s something about a person’s brain that just isn’t driving the muscle as well late in these very long-distance races,” Bearden says. “It turns out women have a slightly, it seems, better resistance to that kind of fatigue.” While some studies show no real difference—women are on par with men—others show women with an ever-so-slight advantage. “Running economy and fatigue resistance are places where women seem to have a bit of an edge,” says Bearden. “And, with those two factors, the longer the distance of the race, the more important those two factors are.”
A marathon is run on a relatively flat, paved road designed to remove variables. But because there are so many hazards along the course of an ultramarathon—from tree roots and loose rocks to bee stings and hallucinations—few runners have perfected their craft. No one factor in an ultramarathon will propel a winner to the podium, but a single mistake can remove any runner from the race. An ultramarathon, therefore, may be the competition where gender matters the least.
We Are Nowhere Close to the Limits of Athletic Performance Gene editing will have a far bigger impact than doping. Although performance has increased a lot in the past century in basically all sports, we are still far from our true potential. Interesting to think of the search problem inherent in getting the best talent into the right sports.
Now we are entering an era in which it will not be chance that configures DNA, but rather the human intellect via tools of its own creation. As our understanding of complex traits improves, genetic engineers will be able to modify strength, size, explosiveness, endurance, quickness, speed, and even the determination and drive required for extensive athletic training. Estimates of the number of variants controlling height and cognitive ability, two of the most complex traits, yield results in the range of 10,000.5 If, as a simplification, we assume that in each of the 10,000 cases the favorable variant is present in roughly half the population, then the probability of random mating producing a “maximal” outlier is roughly two raised to the power of negative 10,000, or about one part in a googol (10 to the power 100) multiplied by itself 30 times. Of course it may not be possible to simultaneously have all 10,000 favorable variants, due to debilitating higher-order effects like being too large, or too muscular, or having a heart that is too powerful. Nevertheless, it is almost certain that viable individuals will exist with higher ability level than any person has ever had.
In other words, it is highly unlikely that we have come anywhere close to maximum performance among all the 100 billion humans who have ever lived. (A completely random search process might require the production of something like a googol different individuals!
But we should be able to accelerate this search greatly through engineering. After all, the agricultural breeding of animals like chickens and cows, which is a kind of directed selection, has easily produced animals that would have been one in a billion among the wild population. Selective breeding of corn plants for oil content of kernels has moved the population by 30 standard deviations in roughly just 100 generations.6 That feat is comparable to finding a maximal human type for a specific athletic event. But direct editing techniques like CRISPR could get us there even faster, producing Bolts beyond Bolt and Shaqs beyond Shaq.
The Gospel According to X-22 Classic article profiling one of the greatest backgammon players of all time(and the author of classic books). Interesting how he was decades before the “moneyball” movement in sports.
“The dice”, Magriel contends, don’t change the game intellectually, but only psychologically. Theres still a move for every roll in every position. But the dice make the game a gamble. They make a game perverse. It can be unbelievably vexing The dice can mock you, tease you, lead you on. It requires a certain amount of masochism to subject yourself repeatedly to their brutality. But intellectually, the challenge is to react neutrally to the dice, to make the right move on a bad roll on as a good one.
Peculiar looking plays of course are relative to one’s expectations. There is no such thing as an inevitable arrangement of checkers in backgammon, any more then there is such thing as an inevitable musical scale. Its purely a matter of convention. But conventions come to seem inevitable ,and it takes a special species of genius to see beyond them.
See also: Backgammon and Life Philosophy
The Ruthless, Secretive and Sometimes Seedy World of Hedge Fund Private Investigations Highly entertaining expose.
Listening to Barakett talk about some of his wildest cases gives some idea of how easy it is for people to fall through the cracks during cursory due diligence. For example, on its website, DDC says it once found that “the president of a large U.S. asset manager was arrested twice for major art theft” but was never charged due to the expiration of the statute of limitations.
The art theft case was a “thing of beauty,” Barakett recalls. The manager, who still runs $2 billion, was even discovered to have one of the stolen paintings in his office when a police investigator went to interview him regarding the second theft. (The man was in college at the time of the thefts, which were from the university.) DDC’s client, a family office considering making a big investment, “could not believe what we were telling them,” Barakett says. It decided to walk away.
Another case involved a Bear Stearns executive whose murder conviction had previously gone undetected because, Barakett suspects, a casual background check either did not look at records in every state he had lived in or checked the wrong name or date of birth. “Our client [an asset manager who was considering hiring the man for an IR position] could not believe it, and we showed him the proof,” he recalls.
Vanguard Patented a Way to Avoid Taxes on Mutual Funds Interesting implications for tax policy, fund structuring and intellectual property strategy.
Vanguard has discussed licensing its hybrid ETF-mutual fund design to other firms, but no deal has come to fruition, according to people with knowledge of the talks. Those that have expressed interest included both index followers and active stock-pickers. United Services Automobile Association licensed the patent but never used it, and Van Eck Associates Corp. once sought regulatory approval for a similar design. Spokesmen for USAA and Van Eck declined to comment
Biglari Holdings is the Fyre Festival of Capitalism Hilarious because I’m not a shareholder in this company.
Many managements probably revile their shareholders, but most of them do not publicly delight in doing so. Sardar Biglari and Phil Cooley, Chairman and Vice Chairman of Biglari Holdings, seem to delight in the annoyance of its shareholders. At one point laughing at them for being upset that the share price went down 58% last year and then subsequently watching the board increase Sardar’s compensation package. It is not my best-self that enjoyed this spectacle, it was more like the part of me that likes watching dragons fight dragons on Game of Thrones that was riveted by Sardar Biglari and Phil Cooley or the part of me that once saw two clowns get into a fist fight at a kid’s party in St. Petersburg and rather enjoyed it.
Buspirone Shortage in Healthcaristan SSR Close look at weird incentives and unintended consequences of regulation in the generic drugs market.
You get more of what you subsidize and less of what you tax. Unfortunately, the FDA is inadvertently taxing companies for being in the generic drug business. And it’s taxing them more if they’re not a monopolist with economies of scale. That means we get fewer companies in the generics industry, and more monopolists.
So my very tentative guess as to why buspirone is more plagued by shortages than bread or chairs is because number one, the need for FDA approval makes it hard for new companies to enter the buspirone industry, and number two, the FDA’s fee structure favors large-scale monopolies over small-scale competitors.
Why So Many Investors Missed Nike’s Stock Rebound Good case study
Legendary stock-picker Peter Lynch’s maxim to “buy what you know” has long been misconstrued to mean invest in the everyday products you consume. That’s not quite right, as it only reflects part of his investment strategy. The other half is buying what you have a unique insight into that the market has yet to figure out. Knowing what those things are is the hard part.
Artko Capital 2019Q1 Letter Interesting commentary around position sizing.
This is where the “Valeant problem” that is rarely discussed, becomes an issue for us: what to do with a position that rapidly increases in size relative to the rest of the portfolio and where Hahn Capital Management and Sequoia/Value Act approaches to the matter differed. While the latter funds continued to hold, and allowed the single position to become almost a third of their portfolio, Hahn Capital had strict risk controls and processes in places that forced them to sell down the position to at least 4% of the portfolio when it became 6% of the portfolio’s weight. Luckily for Hahn, they exited the position prior to the spectacular blow up while the other aforementioned funds suffered significant double-digit portfolio losses when the truth about Valeant’s practices became public. Of course that is not to take away from the spectacular track records of all of the aforementioned funds, but to point out how different investment strategies (concentrated versus diversified), portfolio manager incentives (Management Fee Only versus Performance Carried Interest), and risk control processes (on single position sizes) can result in very different portfolio returns and risk profiles for different shareholders of the same stock. To put another way, sometimes a sell decision is not one of security analysis but one of portfolio risk management and fund strategies. As a result of this, and other similar experiences throughout our career, we have tried to approach the middle ground of the two styles by having a strong degree of concentration and conviction in our portfolio while still maintaining a robust portfolio risk management process focusing on capital preservation, position size, and its risk-reward ratio relative to the rest of the portfolio.
Additionally, we believe the other lesson to be learned from Valeant was no matter how high of a conviction, knowledge base or confidence you have in a publicly traded company or its management, at the end of the day things can and occasionally do go unpredictably wrong and are out of your control. This is a staple of public equities investing and is a common mistake made by even the most reputable investors: having the illusion of control.
An Ancient Relationship: FinTech and Financial Advice Classic look at an ancient profession. Interesting how the stock ticker seemed to have an impact almost as large as the internet.
How has this profession lasted so long? The industry’s longevity is largely attributable to financial technology (FinTech), which has historically empowered advisers to better serve their clients. Many companies, for example, offer advisers quantitative and accurate measurement of investors’ risk tolerance. Equipped with this technology, advisers have a better sense of how clients will respond to volatility, and can construct portfolios that most accurately reflect a client’s ability to endure market swings.
The ticker technology served as a means for democratizing access to market information. Prior to its invention, only those physically present at the stock exchange – or very close by – were privy to real-time market prices. Everyone else received their data at a substantial lag, often to the point where it was no longer useful. Once the ticker was released, however, cables and telegraphs connected brokers across the country to a network of data constantly flowing from a central source, the New York Stock Exchange. According to Horace Hotchkiss, 23,000 offices paid for ticker services in the United States
In Defense of Complexity Most people are knee jerk advocates of simplicity, but forget what lies beneath.
But simple is impossible without complex. Simple is how you interact with your web browser or an app on your phone. Complex is everything else happening in the background that allows it to function.
There are some valuable and diversifying asset classes that routinely get discarded to the “Too Complex” pile for reasons related to ambiguous classification, unfamiliar tools, novel wrappers and peer/career risk. Which is unfortunate, because I would argue that certain alternative investments are complex in implementation only. Conceptually, they are often quite simple, intuitive, backed by data and grounded in economic theory. The arc of the investable universe is long, and it bends towards democratization and innovation. Not every shiny new toy deserves a spot in your portfolio, but it would be wise to reconsider exactly what constitutes simplicity in investing.
Geopolitics and History
You read in every textbook that cliché: Power corrupts. In my opinion, I’ve learned that power does not always corrupt. Power can cleanse. When you’re climbing to get power, you have to use whatever methods are necessary, and you have to conceal your aims. Because if people knew your aims, it might make them not want to give you power. Prime example: the southern senators who raised Lyndon Johnson up in the Senate. They did that because he had made them believe that he felt the same way they did about black people and segregation. But then when you get power, you can do what you want. So power reveals. Do I want people to know that? Yes.
There’s always something the other guy doesn’t want to tell you, and the longer the conversation goes, the easier it is to figure that out
The one thing we haven’t had mercifully over the last 60 year except for the breakdown of Yugoslavia, and Iraq and so on is a major confrontation between big powers wanting to escalate.
While there is a long and lamentable history of science — physics in particular — being hijacked for mystical and New Age ideologies, two things make Jung and Pauli’s collaboration notable. First, the analogies between physics and alchemical symbolism were drawn not only by a serious scientist, but by one who would soon receive the Nobel Prize in Physics. Second, the warping of science into pseudoscience and mysticism tends to happen when scientific principles are transposed onto nonscientific domains with a false direct equivalence. Pauli, by contrast, was deliberate in staying at the level of analogy — that is, of conceptual parallels furnishing metaphors for abstract thought that can advance ideas in each of the two disciplines, but with very different concrete application.
Philosophy is, in part, kept alive by ever-changing sociocultural circumstances that demand new lived responses to its question. But the changes brought by the digital age are of a magnitude beyond the routine vicissitudes of history. The global distribution of knowledge is arming, perhaps overloading us with more information than ever before, and the proliferation of digital interfaces is reprogramming how we experience life itself, our attentive and perceptual faculties.
…What I’m getting at is the possibility that the basic human conundrum is no longer driven by a deficiency in discovery, but in design. That now more than ever, we’re equipped with the information needed to live well, but aren’t integrating that information into our daily routines, our lived realities. There’s a lag between what we’re discovering and how we’re living.
The flood of information made available through the internet filled the discovery container with more than it can hold. We’re spilling things, getting the fabric of human life all wet. These moments of imbalance are when priority shifts from discovery to design. At these points, the work falls upon those positioned between the two containers, using what we’ve discovered to imagine and implement new designs, to convert influxes of knowledge into wisdom that can be embedded into the internal logic of our ecologies, enriching the relational environments from which our sense of being is woven.
In other words, the singularity got cancelled because we no longer have a surefire way to convert money into researchers. The old way was more money = more food = more population = more researchers. The new way is just more money = send more people to college, and screw all that.
But AI potentially offers a way to convert money into researchers. Money = build more AIs = more research.
If this were true, then once AI comes around – even if it isn’t much smarter than humans – then as long as the computational power you can invest into researching a given field increases with the amount of money you have, hyperbolic growth is back on. Faster growth rates means more money means more AIs researching new technology means even faster growth rates, and so on to infinity.
Presumably you would eventually hit some other bottleneck, but things could get very strange before that happens