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strong_silent_t

Annoyed to see a unit error in the first paragraph.

Bulgaria nominal GDP is $50 billion PER YEAR.

Two Sigma assets under management is $50 billion. (Not per year).

If your car goes 100km/hour, and Shelbyville is 100km away, your car is not the distance of Shelbyville.

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Hyperbolic comparisons like these are very off-putting for me too, but I see them everywhere, presumably "for effect". The effect in this instance is that I stopped reading.

I'd saying having the yearly GDP of Bulgaria as AUM is still pretty impressive. And the point is more to contextualize. It's hard when you get past the millions to understand exactly how much we're talking about.

It's a bit odd though because I doubt the majority of readers will have any direct experience with Bulgaria to put it in context. It's like trying to explain X in terms of Y, when Y is equally unfamiliar.

"The yearly GDP of a sovereign nation, albeit a relatively small and poor one" is a lot more meaningful than $50b without context, I'd think.

It is 1/4th of Toyota's or Volkswagen's revenue of one year, so not that much. And last time I checked they did not create a game for recruiting tech talent either.

Oh, only a quarter of the yearly revenue of the world's fifth-largest company by revenue, or the second-largest if we exclude state-run enterprises (c.f. https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...). Alright then.

Still stock vs flow.

So what? I'm not trying to claim they're bigger than Bulgaria.

If somebody compared the distance traveled by some object to the length of a football field, you could similarly object that the football field is stationary, the object isn't as long as that, etc., but none of those things are the point of the comparison, right?

Not really: https://www.nbim.no/en/

I mean, if your reference point is a state fund run by the government of an OECD country I suppose it's not that big.

That is being overly sensitive.

The comparison is mainly to put their available resources into perspective. Imagine the question: 'We have the entire economic output of Bulgaria in liquid assets at our disposal, what is the optimal portfolio we can construct'? And then re-ask yourself this question every second and just make sure you account for transaction costs as you shift stuff around. Also remember this is pre-levered money so deployed capital is a lot higher.

>We have the entire economic output of Bulgaria in liquid assets at our disposal.

This is still a unit error. They do not have the entire economic output of Bulgaria, they have the yearly economic out of Bulgaria.

The correct comparison would be to say that they have 1 Bulgaria-Year worth of liquid assets.

In this context, where the number is used simply for effect, this is not that big of a deal. However, in conversations where the GDP is what is actually important this unit error causes alot of misunderstanding. For example, what happens when the debt to GDP ratio reaches 1? For a lot of people, this seems like a particuarly important point; but in reality, it is just the debt reaching 365 days. Possibly too high, but nothing particularly special about this threshold.

Hey, but with the right ship you can make the Kessel Run in less than twelve parsecs.

And then make some more movies to invalidate the clever Expanded Universe reinterpretation of that line.

If I have a sense of the distance of Shelbyville, then I'd say juxtaposing these two facts gives me a better sense of how fast your car goes.

How far you mean?

That's true, it's partly why units like kilowatt-hours are used. They definitely do lead many people to confusing a unit and it's time derivative though.

I live in Shelbyville, therefore I am an hour.

I thought it was called Morganville, ya?

GDP is the amount of value created by the economy in a year, and it is measured in USD so there is no unit error.

A better comparison would he the Hour Record in Cycling (how far can you cycle in an hour). It's determined by speed, obviously, but the value is still a distance.

The unit error is in the comparison between USD/year (a rate) and USD (a value at a single point in time)

Do you think the Hour Record is measured in km or km/h?

If you want a fair comparison, do GDP vs value produced by that investment fund in a year.

I'm not suggesting its anything other than a ridiculous and meaningless thing to write, I was just saying that both GDP and AUM are measured in the same units (USD).

Apparently several people decided this fact was necessary to downvote ¯\_(ツ)_/¯

No GDP is in $/time. Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period.

Though GDP is usually calculated on an annual basis, it can be calculated on a quarterly basis as well. https://www.investopedia.com/terms/g/gdp.asp

Alternatively, give AUM/GDP, i.e. the time it would take for the accumulated GDP to equal the AUM.

distance/h the per hour is implied when recording distances, however should the race not exactly record 1h the difference is not simply ignored.

Another example, look a records when the physical pools are slightly off of regulation distances for 100m/200m etc. Record keepers in no way ignore those differences.

It's obviously measured in km/h with h=1

I want joules of oil.

And you can. Vegetable oil is around 33 MJ per liter.

https://en.m.wikipedia.org/wiki/Energy_density

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