Quizteam Lagarde

I loved this interview with @PitchThePM and Chandler Bocklage (former PM at Point72 that sat directly next to Steve for a decade and current Head of Business Development at Point72 in charge of hiring analysts and PMs)... “Usually, you have to be narrower to try to get deeper. But [Ai] might actually allow people to be as deep but broaden out, which means that you can have a wider universe of potential alphas. It’s pretty exciting.” “Everything can’t be a two-year idea based on compounded earnings growth…Those are great ideas and the thing you can anchor your book on, but you have to have other things that might work in the intervening two years. Very few places are only looking at the P&L over a two-year block.” “You can’t have the same type of ideas…you have to have different themes, different durations, different catalysts…” “To be a long-term successful PM, you can’t be a one-trick pony.” "Alpha decay is compressing. There are more and more people chasing the same alphas.” “Can you teach what you do and what makes you special to somebody else and are you willing to teach what makes you special to somebody else? There are a lot of people that aren’t.” “When a war breaks out, things change, and the PM might have to think about that a little more holistically than the individual analyst.” Thoughts @pmje73, @DanielSLoeb1, @davidein? 🙏💙 (Not investment advice).

Median high beta AI name -40% “Do you want it to go to zero in a straight line??”

Who is Alice Huang? A lot of people keep asking me this. I actually don't know her, but I think I know the type. In China over the last 30 yrs, there's a businessmen who skirts to the edge of legality, grabbing every opportunity possible to get rich, and who sometimes operate in the grey or even illegal zone They are the type who go around introducing themselves as representing someone powerful (ask Desmond Shum about this) or who pretend to be representing someone powerful (ask Ye Jianming) They bought A6 Audis in the early 2000s to make people think they were related to the government and buy Van Cleef and Arpels jewelry today to look the part. They got EMBAs at a Chinese university to network with the real billionaire tycoons. The men drink Maotaik and chain smoke cigarettes. They used to go to KTV, had mistresses and saw hookers every week. They look like shit, doughy and smelling from the smokez but because of their money - or supposed money - they get somewhat good looking girls all the time. The women doll themselves out in their 40s and 50s and look ok but not good. They try hard. They are always wearing a dress that's professional but also attractive and have the perfect handbag. They look cosmopolitan with their La Mer makeup but every once in a while, their peasant background pops out, whether it be how they order waitstaff around or in their skin tone. These businessmen are the ones who bought baby formula in Australia and Hong Kong and smuggled it into the mainland when everyone was scared to drink Chinese baby formula They bought iphones in Hong Kong and smuggled them in minivans into the mainland. They were the ones who operated P2P financial lending out of personal bank accounts, sometimes running up hundreds of millions in deals, before the government cracked down They were the ones who did reverse shell IPOs to the US. The companies they took public were stinkers and investors lost out but it was all semi legal so no one got arrested. They drove sales of luxury items by buying Louis Vuitton and Rolex for corrupt officials to gain some semblance of access and protection They were the ones who took Singaporean citizenship to evade Chinese law but still be able to get to the mainland as needed for business. They aren't necessarily bad people. Sone are. But they are desperate people. Wanting to get wealthy. Wanting to belong to an elite social class. Wanting to capitalize on any business opportunity or connection These are the people who would buy Nvidia chips to rent to Alibaba or to smuggle into the mainland against the wishes of both the Chinese and American governments This is my guess who Alice Huang is. She looks the part. So does her background. But I have no evidence or knowledge so take anything I write a out her with a grain of salt But spy? I doubt it. Smuggler? Highly likely. Happy that she got such a prise in Jensen, undoubtedly. Honeypot by Chinese government? Doubtful. Talk to government once in a while about info she might have gotten from Jensen, very possible But her life is ruined. She'll never be able to travel internationally now without people saying she's a spy. She might get held and arrested. She'll have to stay in China forever

Low expectations leave little room for disappointment. With $HROW, it seems the market had largely shared my rather pessimistic outlook until now and had priced it in. Yet, despite my already low expectations, the stock was significantly undervalued imo. Today’s earnings results were much better than expected, and the stock is reacting with a 17% surge. Sometimes, there really is an advantage to having followed a stock for years and knowing both its behaviour and that of its investors. When expectations are high and the share price reflects them, things can get dramatic. When expectations have been crushed and the share price has followed suit, even good news can trigger euphoria. The lesson? It pays to know what you own and to understand the psychology of the market. It’s a moody stock, indeed.

Just to show a point... AI names have crashed so much to the point $POET as a business is now considered close to worthless. It's now $829.7M MC vs. ~$788M net cash. And below its $847.5M book value. Considering institutions were funding it $400m at $21, with $26.25 exercisable warrants few months ago and it's back to ~$4.8. Poet would need to rally +337.5% just to return back to the original financing price. "FOGO" (Fear of Getting Obliterated) have hit extreme levels if "growth" companies are priced near liquidation values.

None of that matters because they only really have one real customer

SpaceX got massive IG deal done this am after Elon causing Thurs-Sun freak out about debt mkt being closed. Meta deal done and stock is flat. Hyperscale earnings coming up 10/28. Wrong or right, market is going to look at Anthropic S-1 and see MRQ profitability, growth, a mountain of cash on the b/s and a placeholder for an up to date ARR number around which there is already a narrative (number go up). I’m skeptical of AI trade in general and many of these business models in particular, but after a historic drawdown in AI momentum names there seem to be few prizes for pressing. Oh and seasonality starting in 2 weeks. One last hurrah for @GavinSBaker ?

I just went through every chart of anything I remotely consider a short and there are maybe 2 decent short entries out of +200 charts right now. Technically we are spent on the downside.

I am actually quite constructive here through year end - reasonable minds can disagree, that’s what makes a market. But yes there are going to be a lot of losers. And good feedback that I will think about; i.e. wise to buy puts whenever vol gets cheap, be diversified and always have at least some ballast in the long book. Example: in a prior life, I would always have a small allocation to gold that I would cash in during pullbacks and then rebuild during rips. Consequence of doing marketing with the gold guy for several years. But at times like this could always have more puts and more ballast. This is a tough job and we are all doing our best. BTW, enjoy your takes and please keep writing songs.

What L? I rode stock from $5 to $9+ and made 7 figures on it. Made a lot of other people a ton of money on it. Stock is high risk. The bear case was exactly what played out: they didn’t get contracts and need financing. It was (and is) a last to rallly / first to fall AI power theme stock. You could have just one with this obvious short thesis… But no…you guys had to go full blown JFK conspiracy with 6 shooters and space lasers 😂. Both of you guys invented (or have yet to prove) any of your salacious allegations of fake warehouses, whistle blowers, G2 Austin doesn’t exist, the ceo’s wife’s cousins sister’s former roommate likes anime, etc. You guys keep coming back for victory laps at market bottoms when you both covered within minutes (or days) of your reports. So yes, congrats on the “paper” win of a stock doing something you wanted for none of the reasons outlined by your thesis;). Enjoy your victory!

European staffing stocks (ADEN etc) - up 100% during summer degrossing - starting to crack today. Bull case is they are not in fact terminally challenged businesses but cyclically challenged and recovering. Bear case would be that a brick-and-mortar Blockbuster business model can’t compete with digital-native at 1/20th the take rate. Hays PLC fees shrinking -3 to -7%, depending on geo, supportive of the latter