"Markets strip out emotion and tell you the truth.".
"Donald Rumsfeld, the former U.S. Secretary of Defense, said Iraq wouldn’t last six months. It lasted eight years and cost $3 trillion. We’ve seen this before, but the markets haven’t priced in any of it.".
I'm not sure "markets tell us the truth" as much as "predicting is hard, especially about the future".
With respect to private credit: 1. the traditional, lower-end of the market has become much tighter than it was ten years ago and for smaller deals you need about twice the equity/cash now to get a deal done (lower total lending is available); 2. many of these private credit funds are leveraged themselves - and they sometimes are leveraged with debt from regular or semi-regular banks. When things work this make the investors in the private credit funds more money, when it doesn't work, it makes the downside worse.
I have not checked recently, but there used to be a few funds that offered vehicles that individual investors could purchase, so you could see the underlying economics. Based on this SEC reporting on one of these funds it looked like as long as the default rate was say, less than 5%, everything was ok - but these funds were lending to highly-leveraged businesses that were more likely to have a default rate of 10% or more - which at one point happened and wiped out the investors. There are some guardrails with respect to the fund's leverage, but this has the potential to create systematic risk.
Actually Darren Woods CEO of Exxon told Trump to his face, “Venezuela is uninvestable”. Former Exxon CEO Rex Tillerson famously corrected a quote saying, “I didn’t say he was a moron, I said he was a f***ing moron”. Scott, sell your Apple stock and buy Exxon.
Also, on Sam's weird thing about energy usage in AI versus millions of years of human evolution being energy wasteful....
Surely humans built AI, so therefore, doesn't all the energy he's counting of getting a human to answer a query versus an AI, also apply to the AI answering it?
This is so well written and so beautifully designed. Can I ask what tools you guys use to make the charts/graphs? They look amazing 🧡
First time reader: love this!
"Markets strip out emotion and tell you the truth.".
"Donald Rumsfeld, the former U.S. Secretary of Defense, said Iraq wouldn’t last six months. It lasted eight years and cost $3 trillion. We’ve seen this before, but the markets haven’t priced in any of it.".
I'm not sure "markets tell us the truth" as much as "predicting is hard, especially about the future".
Scott regularly talks about his love of Daniel Kahnemann, but doesn’t really seem to be able to internalize DKs points. Two being:
We can’t predict the future; expertise only works in narrow domains with strong patterns, not the chaos of “the market.”
The wisdom of the crowd only shows up when people can’t see other people‘s answers.
With respect to private credit: 1. the traditional, lower-end of the market has become much tighter than it was ten years ago and for smaller deals you need about twice the equity/cash now to get a deal done (lower total lending is available); 2. many of these private credit funds are leveraged themselves - and they sometimes are leveraged with debt from regular or semi-regular banks. When things work this make the investors in the private credit funds more money, when it doesn't work, it makes the downside worse.
I have not checked recently, but there used to be a few funds that offered vehicles that individual investors could purchase, so you could see the underlying economics. Based on this SEC reporting on one of these funds it looked like as long as the default rate was say, less than 5%, everything was ok - but these funds were lending to highly-leveraged businesses that were more likely to have a default rate of 10% or more - which at one point happened and wiped out the investors. There are some guardrails with respect to the fund's leverage, but this has the potential to create systematic risk.
Thanks for sharing my article, Mia!
Republicans don’t care about global ecological catastrophe’s and traumatizing the innocent.
The markets tell the truth comment is so glib and seems belied by, IDK, the crash in 2007
https://endtropy.substack.com/p/operation-epic-follyfury-part-1-us?utm_source=share&utm_medium=android&r=2a4jys
Weekly dashboards + risk triggers for Macro × Bitcoin × Energy.
Free weekly letter ↓ decadeplays.substack.com
Actually Darren Woods CEO of Exxon told Trump to his face, “Venezuela is uninvestable”. Former Exxon CEO Rex Tillerson famously corrected a quote saying, “I didn’t say he was a moron, I said he was a f***ing moron”. Scott, sell your Apple stock and buy Exxon.
My investment portfolio lost $70K since this useless Operation Epstein Fury started.
Also, on Sam's weird thing about energy usage in AI versus millions of years of human evolution being energy wasteful....
Surely humans built AI, so therefore, doesn't all the energy he's counting of getting a human to answer a query versus an AI, also apply to the AI answering it?