If you ask an AI a question, it will give you an articulate response regardless of whether it knows the answer or not. This has spooled up a cottage industry of social media posts making fun of AI for saying stuff like you should put glue in your pizza to keep the cheese from sliding off and you can treat appendicitis at home by boiling mint leaves.

And yet...the majority of financial professionals do pretty much the same thing. If you ask a question, you'll get an articulate response...which will often be plausible-sounding nonsense. In the case of ChatGPT, it's actually easier to spot the nonsense, because we are more conditioned to be skeptical of its answers and there are no trappings of confidence or credentials to bolster how believable the answer is.

I have been thinking a lot about this dynamic lately. A person I know came into a lot of money. He is very smart and successful, but not a trained investor. He observed "It’s so hard to know what to believe and whom to trust in all of this" and the more I reflected on it the more I appreciated how difficult a position he is in, and also how to varying degrees we all end up in the same position in different contexts and for different stakes. I don't know anything about cars, but if I need to buy one I have to sort through what different sales people tell me and somehow make a decision (and our incentives are not aligned). The experience I've had with my 7 year old hybrid minivan would indicate that I did not do a good job on that particular decision. When we hired new researchers at Bridgewater, we would put them through a bootcamp to teach them how to think for themselves about markets. For one of the first lessons, I would give them two research papers to read - one from Goldman Sachs, and one from JPMorgan. Both were well-written and well-researched deep dives into the same market event - and they came to exactly opposite conclusions. It was a diabolical exercise. At least one of them had to be dead wrong....but how can you tell which one? Not easy!

Where I ultimately come out on this is that the only way you are going to be able to tell good from bad in our industry is by asking a lot of "why" questions, maybe even so many that it feels obnoxious. Embrace your inner toddler. Keep asking "why" until you push past story time and narratives and get into hard evidence and data. It's not a magic bullet - sometimes the data can be cherry-picked, or have some kind of flaw that isn't obvious...but you will learn a lot about the investment manager on the journey of "why" and hopefully that will be useful in making better decisions. I'd also love to hear from some of you on how you have navigated this challenge in your own experience.

I'd be remiss if I sent this email without including a link to one of my favorite videos of all time. Richard Feynman was a polymath who won the Nobel prize in physics, and whose books and lectures are still terrific today. He has an insightful perspective on the power (and limitations) of a "why" question. Enjoy.