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Akimbo: A Podcast from Seth Godin

Midroll Media

Society & Culture

4.8 • 1.9K Ratings

🗓️ 29 May 2024

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

How to change the world

Akimbo is a weekly podcast created by Seth Godin. He's the bestselling author of 20 books and a long-time entrepreneur, freelancer and teacher.

You can find out more about Seth by reading his daily blog at seths.blog and about the podcast at akimbo.link.

To submit a question and to see the show notes, please visit akimbo.link and press the appropriate button.

Hosted on Acast. See acast.com/privacy for more information.

Transcript

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0:00.0	Before Jeff Bezos was the richest man in the world, he worked for somebody who was one of the richest men in the world,
0:10.0	somebody who used to be a professor at Columbia University.
0:15.0	What exactly did D.E. Shaw do that made him a master of the universe.
0:24.4	Hey, it's Arove, and this is a special archived episode of A Kimbo.
0:43.8	D.E. Shaw was one of the pioneers of program trading, of high speed trading on Wall Street. High speed trading is so focused on speed that an entire industry grew up around it based
0:51.9	on the speed of light. It's called co-location. If you've got a
0:56.8	computer program that can trade stocks faster and a little bit better than other people can, where you're making a tenth of a
1:05.9	penny or a hundredth of a penny or a thousandth of a penny on every trade.
1:11.4	Then getting your computer program closer to the stock market itself, not giving up
1:19.8	a hundred feet or ten feet or even a foot of 10 base T wire Ethernet between you and the
1:27.2	trading floor matters because if you can get in a picosecond before your competition, you can grab that tiny little bit of equity faster than they can.
1:40.0	And so the co-location industry is all about renting space in a building as close as possible to the central trading computer and keeping the wires as short as possible. Here's an industry that's based on the
1:57.0	picosecond that didn't even exist 40 years ago.
2:03.8	Why does it matter?
2:05.5	It matters because people who play with money for a living
2:09.8	are doing a simple bit of math. And the math is, what's the return on investment?
2:16.2	Well there are two ways to make the return on investment go up. One way is that you can get more money back for the money you invest.
2:28.0	But the other way, the other half of the fraction is you can keep the money for less time, that if it takes you a year to get a
2:38.6	10% return versus a 5% return in a month, you're going to do way better if you can get what seems like half
2:48.0	the return in one-twelfth the time.
2:53.2	Because the stock market trading, investing
2:57.4	capitalism has always been in a hurry. How fast can we get our money back? Sure, we want things to grow, but the capitalist
	...

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