Investing is hard
Down the capital stack
Joined December 2019
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Changing domain hosts to save $8/yr is the definition of something I'd never get around to doing. But I put Instinct on the task and it handled it just fine. Switching costs for lots of things are going lower.
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As a matter of law, the duty of the board is not to shareholders but to the company. As a matter of realpolitik, the duty of each board member is to himself, so he will insist on observing all the corporate niceties. All of this means that the shareholder is *third* in line.
So the Silicon Valley line on $NVDA seems to be that if a business has Key Man risk, it's ok for the key man to be reckless. This seems backwards.
People saying the Ramp data isn't accurate, but $ANT itself is guiding to "seasonality" in Q4. How is this not a disaster?
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If every company in Korea owns below-market land, and if the country's growth pyramid looks like an urn, does anyone actually own below-market land?
Korea's sugar refining oligopoly keeps getting busted for literally meeting in smoky rooms to set prices, yet they only earn a 4% ROIC. Worst cartel ever, or is it that they also tunnel value out of their companies?
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Shipyard Capital retweeted
If someone is really “manipulating the price” of an asset, you would be able to make more money, not less, because you could take advantage of it
Welcome to global macro
"Issue him a $2.71 tax refund, but spike his cortisol by sending him an email telling him he needs to log in to receive a message from the IRS"
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I feel seen
I’m not sure how you can observe what just happened over the past week and takeaway that anybody should be leaning into “old school” stock picking but let’s unpack why a bit:
"buying cheap companies": lets start with the fact that in a world where a larger share of the market's x-sectional vol is factor vol vs. idio vol (nitter.cf/0xFaust12/status/21009…) that "cheap" is not a sufficient criteria for an investment to follow your thesis. Being blind to factor exposures of the position, counterparty dynamics like crowding, and short term fundamental trends are all forces that can/will move your position against you even if you have long "duration". In practice, buying a "cheap" company means holding a position(s) with negative to neutral momentum, positive residual volatility, negative perhaps negative profitability which are generally deleterious bets to be making and will present a drag on your total return during your holding period.
"accepting volatility and holding for 2-5 years": I don't have too much new to say here other than the fact that it is more likely your "long duration" horizon will result in you holding 50-60% drawdowns vs. 20-30% ones (you can confirm empirically), so in trying to be more clever than the pods you will in fact have constructed a much worse quality return stream for yourself (cough cough Lone Pine, Eminence, etc). Moreover, old school fundamental investing does not make use of risk models in the modern sense and, per the above, in a market increasingly trading less on fundamentals, your approximation of risk will be even less relevant leading to the deeper than expected drawdowns noted above.
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I suspect we're entering a Renaissance of cybersecurity and of less prevalent fraud. Thanks to LLMs, I have the resources to chase down (and even litigate) all kinds of little chisels and humbugs.
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Last two things I used Instinct for were finding and delivering flowers, and finding an AirBNB. Not sure what the implications are for both those businesses. Probably makes it easier to find lower prices?
Every single ad for consumer AI is gilding the lily. “Split my bills!” “Give me vacation ideas!”
All solved problems.
The takeaway is that the best bizs in history will spend ALL their cash and dilute equity at the first hint of threat.
Which is in zero models/DCFs.
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