The asset management industry is inherently humbling because even top performers are wrong nearly half the time (53% correct is excellent). True success requires humility to accept mistakes and change your mind, whereas arrogance leads to ruin. The most successful investors are notably humble people.
Hedge fund pioneer Paul Marshall suggests tracking the AI investment cycle by monitoring a firm's internal consumption of AI tokens. A slowdown in the rate of growth (the second derivative) of this usage can act as a leading indicator that it's time to reassess investment levels in the sector.
Norges Bank Investment Management screens all new hires, regardless of role, with technical AI tests that go beyond simple prompting. The goal is not just to hire AI specialists, but to filter for agile, 'AI-able' candidates who are keen to adopt AI as a core productivity tool, ensuring the entire organization evolves.
Market concentration risk has evolved. Historically, the top 10 most valuable companies were diversified across sectors like banking, mining, and retail. Today, they are almost all tied to the single theme of AI, creating a new, concentrated form of systemic risk for large funds and the market as a whole.