An ecosystem of fantasy and fakery
It’s called the investing business.
This week, Elizabeth Holmes finally got sentenced to jail for 11 years.
She raised more than $700 million from venture capitalists and private investors. Theranos had a valuation of $10 billion in 2014.
Jim Cramer had once hailed Elizabeth Holmes as the next Steve Jobs.
Trump’s Education Secretary Betsy Devos, media mogul Rupert Murdoch, Walmart heirs in The Walton family and Mexican telecoms tycoon Carlos Slim were all among a lineup of famous and wealthy investors.
Last week, FTX, once valued at $32 billion, filed for Chapter 11 after raising $1.9 billion from 80 investors in just two years. Turns out that it was not even a company - no board of directors and no records of what actually happened to the money it had raised.
Hedge funds, venture-capital firms and other professional investors earn billions of dollars of fees for their purported skill in judging the potential of businesses and the integrity of their managers. Yet dozens of the world’s leading investment firms, including Sequoia Capital, Singapore’s state-owned investment company Temasek, the Ontario Teachers’ Pension Plan, SoftBank Group Corp., and hedge funds Third Point and Tiger Global, showered SBF with money.
And as more crypto dominos continue to fall, more and more such videos are surfacing:
A scam cannot take-off on its own. It needs an ecosystem of enablers and pumpers. But once it draws in more and more people, skeptics are dismissed as cynics - told to “have fun staying poor” as the red-pilled march on to a glorious future.
When I look at some of Indian stocks with strong follower cults, I can’t help but wonder, what if…?
Markets this week
The US yield curve continued to invert, predicting a recession and rate-cuts next year.
Markets mostly flat, US dollar soft.
Links
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Its ok to start with screwdrivering but its criminal to stay there.
Lessons in Industrial policy (thread)
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DCA/SIP into index funds and chill.
Everybody chases performance, including advisors and fund managers. (thread)
Asset management is all about tradeoffs between returns, risk, costs & taxes. There’s no there there.
MTUM vs. VFMO - same strategy (momentum) implemented differently:
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As the tide of easy money runs out, we will find out that a vast majority were swimming naked.
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There is corruption everywhere. The only difference is how it gets done.
Government affairs program in the US (thread)
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Never liked voice assistants - have a tough time getting them to work and find it spooky that something is always listening-in on your conversations. Looks like another one is about to bite the dust.
What are we trying to do? Be the best? The cheapest? When that part is not clear, you end up with competing factions.
Amazon is gutting its voice-assistant Alexa. (businessinsider)
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Hess CEO says OPEC 'back in the driver's seat' as U.S. shale growth slows (reuters)
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1 in 200 Men Are Direct Descendants of Genghis Khan. So, why not?
Genghis Khan died ~750 years ago, so assuming 25 years per generation, you get about 30 men between the present and that period. In more quantitative terms, ~10% of the men who reside within the borders of the Mongol Empire as it was at the death of Genghis Khan may carry his Y chromosome, and so ~0.5% of men in the world, about 16 million individuals alive today, do so.
