FTX / SBF

November 13, 2022

“Self-control is a key to investing success, but so is fending off self-delusion.”

– Jason Zweig

RESEARCH

GMO on the alignment of both the long-term and short-term opportunities in quality-focused small-cap equities. They emphasize adding a quality filter to avoid the ‘junk’ companies in the small-cap segment. Additionally, GMO argues that there’s an opportunity to use fundamental research to find companies with strong management and high (and sustainable) return on equity (ROE).

Kai Wu on political investment, and testing investment strategies with corporate political lobbying and donations in mind.

 Bloomberg’s Matt Levine shared his take on the FTX death spiral. Link

 Great reporting by Reuters on what’s transpired so far. Two major takeaways: 1) the catalyst for this looks to be in part from the fall of Voyager Digital 6 months ago after Alameda Research (SBF’s trading firm) bailed out Voyager and 2) SBF transferred at least $4 billion from FTX to Alameda to prop up the firm. Link

 “.. That leaves [Bankman-Fried’s] net worth at about $1 billion, down from $15.6 billion heading into Tuesday. The 94% loss is the biggest one-day collapse ever among billionaires tracked by Bloomberg.”  Link

 Jason Calacanis, Molly Wood, Vinny Lingham and Sunny Madra share their take on what’s happened with FTX and what the implications are for the crypto ecosystem from here. Note – this was recorded on November 8th. Link

Long Sequoia post from September on SBF (Sequoia has since written down their investment in FTX to $0). Link

  *NSFW* Short-seller Marc Cohodes shared some of the major red flags he saw with FTX & SBF over a month ago (start at 35:37). Link

 We shared this Odd Lots podcast with both SBF & Matt Levine back in April, but it’s worth revisiting now. Link

How did the hedge fund, RenTech, return 66% per year before fees1?

If you invested $10,000 in Renaissance Technologies’ Medallion in 1988, you’d cash out in 2018 with almost $200,000,0002. Many consider the Medallion Fund one of the best hedge funds of all-time1.

Their strategy? “Quantitative Investing.”

Back in 2006, Meb Faber wrote a paper titled “A Quantitative Approach to Tactical Asset Allocation” (QTAA) that helped launch his career. But the strategy in that paper, along with countless other sophisticated quantitative strategies, were out of reach for 99% of investors to do on their own.

Until now…

Composer gives you the financial tools to easily drag, drop, edit and swap quant-investing strategies from scratch – no engineering degree required.

They even have a library of curated strategies to choose from, including QTAA based Meb’s paper (go give it a look!). Plus, they have other strategies like Buy the Dips Nasdaq, The Buffett, and The Dalio.

[10/28/22 – 70 minutes]Apple | Spotify | Google

Professor Cederburg shares his research on the long-term performance (both returns and loss probabilities) both stocks and bonds, home-country bias, and the best options for investors who can access pre-tax and post-tax accounts.

Another great All-In episode that covers Calacanis & David Sachs helping Elon with Twitter, the massive number of tech layoffs, and the state of the economy.

[11/25/22 – 79 minutes]Apple | Spotify | Google

Serial entrepreneur Kevin Rose shares his framework for starting businesses, how he invests his money, and why he’s bullish on Web3.

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