Dec 31, 2022

Andy Serwer on corporate culture

Culture eats strategy for breakfast.

~ Peter Drucker

(as quoted by Andy Serwer, "A final dispatch from editor-in-chief Andy Serwer," Yahoo!Finance, December 31, 2022)



Barbara Walters on work ethic

Work harder than everybody.  You're not going to get it by whining, and you're not going to get it by shouting, and you're not going to get it by quitting.  You're going to get it by being there.

~ Barbara Walters, 1929-2022





Barbara Walters on genius

Every genius I have met could be classified as crazy by most people.  They possess the highest level of sanity that us people find difficult to understand and accept.

~ Barbara Walters



Barbara Walters on politics

Politics ... is the hottest, most dangerous subject in the land.  It's not only a conversation-wrecker, it's a friendship-wrecker, a family-wrecker, a job-wrecker, a future-wrecker.

~ Barbara Walters



Dec 30, 2022

Jacob Hornberger on the Russia-Ukraine War, corruption abroud, debt and loss of freedom at home

One of the unanswered questions is how much of the $100 billion in U.S. taxpayer money that U.S. officials have given to the Ukrainian government has been used to line the pockets of Ukrainian officials. After all, Ukraine is one of the most corrupt regimes in the world. There is no reason to believe that the Ukraine-Russia war has suddenly converted Ukrainian officials into honest and honorable government officials. 

Finally, there is something else to consider that is of critical importance. The federal government’s debt now exceeds $31 trillion. U.S. officials, led by President Biden, continue spending money like there was no tomorrow. That includes almost a trillion dollars being given to the Pentagon to keep us “safe” from the threats that it itself induces. Ever-increasing federal spending, debt, taxation, and monetary destruction constitutes a grave threat to the freedom and well-being of the American people. In pleading with Congress to give the Ukrainian government even more billions of dollars of U.S. taxpayer money, it’s too bad that President Zelensky gives short shrift to the continued destruction of our own freedom and well-being here at home.

~ Jacob Hornberger, "Ukraine's War with Russia Has Nothing to Do With Freedom," FFF.org, December 22, 2022



Pelé on success

Success is no accident.  It is hard work, perseverance, learning, studying, sacrifice and most of all, love of what you are doing or learning to do. 

~ Pelé, 1940-2022



Dec 29, 2022

Patrick Boyle lists Victor Lustig's 10 commandments for conmen

So what were Victor Lustig's 10 commandments for conmen?  Maybe they'll help us to spot frauds.
  1. Be a patient listener.
  2. Never look bored.
  3. Wait for the other person to reveal political opinions, then agree with them.
  4. Let the other person reveal religious views and have the same ones.
  5. Hint at sex talk, but don't follow it up unless the other person has a strong interest.
  6. Never discuss illness, unless some special concern is shown.
  7. Never pry into a person's personal circumstances (they'll tell you everything eventually).
  8. Never boast - just let your importance be quietly obvious.
  9. Never be untidy.
  10. Never get drunk.
~ Patrick Boyle, "Why We Trust Fraudsters!," YouTube, 20:15 mark, December 9, 2022

(Victor Lustig was a con artist who sold the Eiffel Tower twice and scammed Al Capone.)





Dec 28, 2022

Dan Ferris on Cathie Wood begging for lower interest rates

There's an underlying point [in Cathie Wood's letter to the Fed] and it kind of credits the Federal Reserve with being able to control things from the top down simply by cutting interest rates again.  It's like cutting interest rates is some magic panacea that just makes everything better.  And what people don't realize [is that] cutting interest rates down to zero the way they did is what got us into all the crap that is now unfolding.  If you don't do that in the first place, you don't get all of this bear market, worst year in the bond market since 1788, etc., etc., etc.  If you don't get the inflation of the bubble, the blowing up of the bubble, on the upside, you don't have to put up with the exploding and the popping of it on the downside...  I think the Fed meddling and meddling and meddling is part of the problem.  And she didn't say for the Fed to be abolished and get out of the markets.  She basically credited them with the ability to make it all better by lowering rates.  And I totally disagree with that.

~ Dan Ferris, "Out Mailbag Is Full, Thanks to You," Stansberry Investor Hour, 48:00 mark, December 26, 2022





Dec 27, 2022

Rolf Dobelli on world improvers

The notion than an individual can change the world is one of the greatest ideologies of our century - and one of its grandest illusions.  In it, two cognitive biases are intertwined.  One is the focusing illusion, which we saw Daniel Kahneman explain in Chapter 11: "Nothing in life is as important as you think it is while you are thinking about it."  When you peer at a map through a magnifying glass, the areas you're looking at are enlarged.  Our attention functions in much the same way: when we're engrossed in our campaign to change the world, its significance appears much greater than it actually is.  We systematically overestimate the importance of our projects.

The second cognitive bias is known as the intentional stance, a term coined by the American philosopher Daniel Dennett.  Under the intentional stance we assume an intention behind every change - regardless of whether or not it was actually intentional.  So when the Iron Curtain fell in 1989, it was because somebody had deliberately brought about its collapse.  The end of apartheid in South Africa would not have been possible without a campaigner like Nelson Mandela.  India needed Gandhi to gain independence.  Smartphones needed Steve Jobs.  Without Oppenheimer, no atomic bomb.  Without Einstein, no relativity theory.  Without Benz, no cars.  Without Tim Berners-Lee, no World Wide Web.  Behind every global development we posit a human being willing it into existence.

~ Rolf Dobelli, The Art of the Good Life (2017), "The Illusion of Changing the World - Part I," p. 163



Dec 23, 2022

Rick Rule on competing with woke portfolio managers in the energy sector

I think you have a whole collection of portfolio managers investing or decapitalizing the oil industry for woke purposes.  I love competing with people who don't compete.

~ Rick Rule, interview with Dan Ferris, Stansberry Investor Hour, 31:40 mark, December 19, 2022



Rick Rule on the government-made supply shortage of oil and gas

I believe there's a very good intermediate-term play in the oil & gas sector.  Ironically, that's almost guaranteed by our government.  The government is suggesting to the oil industry that they need to increase the availability of oil and gas while telling them that they're going to put them out of business in 2030.  Telling somebody that you're going to put them out of business in 2030 is not really a good way to get them to invest hundreds of billions of dollars today.  So we have an artificial supply constraint.

~ Rick Rule, interview with Dan Ferris, Stansberry Investor Hour, 24:30 mark, December 19, 2022



Jeremy Siegel: "2023 is going to be a very good year for equities"

My feeling is that the stock market is anywhere from 10 to 15% undervalued on a long-term basis.  And I think 2023 is actually going to be a very good year for equities. 

~ Jeremy Siegel, "The Economy in 2023: Jeremy Siegel's Forecast," Wharton Business Daily, 10:35 mark, December 12, 2022



Jeremy Siegel on what caused the 2022 stock market decline

I attribute, therefore, most of the decline that we've seen to the rise in interest rates, not the fear of recession.  Not that there isn't a fear of recession.  There most certainly is.  But if you take a look at it, it's mostly an interest rate phenomenon that has caused this decline.

[...]

Normally you have recession following boom.  We may just have a period of slow growth in the first half.  The Fed then lowers the rate and then we can commence growing again in the second half of 2023.

~ Jeremy Siegel, "The Economy in 2023: Jeremy Siegel's Forecast," Wharton Business Daily, 3:00, 7:55 mark, December 12, 2022



Dec 19, 2022

Michael Hsu on the resilience of the banking system during the crypto crash

The resilience of the traditional banking system to the recent events in crypto is not an accident.  Rather, it is due, at least in part, to federal bank regulators’ continued and intentional emphasis on safety and soundness and consumer protection.

~ Michael J. Hsu, Acting Comptroller of the Currency, "Crypto: A Call to Reset and Recalibrate," remarks at the DC Blockchain Summit 2022, December 7, 2022



Dec 18, 2022

Sam Bankman-Fried on impacting the lives of trillions of people not born yet

Ultimately, this scale of impact that you can have on the world is just really, really large.  I think the fact is you can impact way more people through your philanthropy, through how you give back, than you do in your everyday life.  That's what really sets it apart.  You can think about the thousands of people who you can help who are dying of diseases that no one should be dying of today.  There are millions of them, but a single person can potentially save thousands of their lives over the course of your career.  And that's a lot of lives to save.  And I think when you start thinking about the trillions of people who haven't been born yet, who are going to inherit this earth from us, the things that we do that sort of impact what it is exactly that we're passing down to them are just incredibly important and magnified way beyond the scope of almost anything else that we do.

~ Sam Bankman-Fried, "Effective Altruism: Education, Empowerment & Environment with Gisele & SBF," Crypto Bahamas, 3:20 mark



Michael Novogratz: "anti-crypto is really bad politics"

There are 50 million owners of crypto in America, probably 25 million really passionate single-issue voters.  And so Democratic politicians had a wakeup call.  It's shocking... how many politicians are reaching out to Galaxy, to me, say, "hey, can you educate us?"  They realize they need an opinion.  Being anti-crypto is really bad politics.

~ Michael Novogratz, "Investing in Crypto with Cathie Wood and Mike Novogratz," Crypto Bahamas, 6:15 mark, May 18, 2022



Dec 15, 2022

Joe Lonsdale on ESG

]I]n practice, what happens like anything else is ESG is a form of power, and the power becomes captured politically and used towards different ends.  And so a huge part of our corporate world, a huge part of the Fortune 500, is virtue-signaling to try to get free resources, to try to get basically rewarded based on the fact that a lot of institutions are now captured by these ESG frameworks.

~ Joe Lonsdale, venture capitalist and Palantir co-founder, "FTX founder manipulated ESG to earn virtue-signaling glow': Palantir co-founder," Fox Business, November 29, 2022



Bradley Tusk: "Tesla's share price is based on hype and the pixie dust"

Is Tesla a great company that produces a great car?  Absolutely.  Is Tesla worth what General Motors should be or Ford or Toyota should be?  Of course not.  So much of Tesla's share price is based on hype and the pixie dust that Elon Musk is so good at putting out there.  When he risks puncturing that image, it doesn't just reflect on Twitter but Tesla, SpaceX, and everything else he is doing.

~ Bradley Tusk, veteran venture capitalist, Yahoo!Finance Live interview, December 15, 2022





WSJ on the virtue signaling of Sam Bankman-Fried

Mr. Bankman-Fried virtue-signaled by committing to make FTX “carbon neutral” and donating generously to fashionable progressive causes such as a foundation working to provide solar energy in the Amazon River basin.  “We’re giving millions each year to launch sustainability related initiatives,” he said in an April Forbes magazine interview with—you can’t make this up—Brazilian super-model Gisele Bündchen.

~ WSJ Editorial Board, "Sam Bankman-Fried Becomes an ESG Truth-Teller," The Wall Street Journal, November 17, 2022



Dec 14, 2022

Jonathan Turley on Sam-Bankman's arrest right before testifying before Congress

The question is why the Justice Department moved to stop Bankman-Fried as he worked so hard to make the criminal case against himself.  He comes across badly in these past interviews like a trophy-laden millennial who believes that he just needs to play to win.  It is not quite that easy in a criminal case. 

If he testified, Bankman-Fried could not only have made any criminal defense more difficult but he could have potentially tripped the wire for allegedly false or misleading statements under oath.  It was a target-rich environment for Congress — and a potential bonanza for prosecutors. 

Bankman-Fried was in a dangerous free fall.  Despite his legal team, Bankman-Fried seemed to be praying for someone to “stop me before I speak again.”  Someone just did.






Dec 13, 2022

Peter Zeihan on incoming President Trump and the end of globalization

Everything about the American position in the international system is based upon the Americans holding together what we currently call the international order.  Americans have been doing this since 1944.  At that point the Americans re-forged the global system, shifting it from a series of warring imperial networks into a global system they personally managed.  The Americans imposed global order — the first global order — and created free trade as a means of purchasing the loyalty of the Western and Asian allies, the defeated Axis powers, and in time Communist China.  It was all about paying for alliance networks to contain and defeat the Soviet Union.  When the Cold War ended the Americans neglected to shift their policies.  The Americans continued to provide global security and empower global trade, but did so without the requisite security quid pro quo. 

People noticed.  The Brazil/Russia/China/India boom could only happen in such a strategic moment in time.  The euro could only exist when economics were protected and security was free.  But it wasn’t just in the wider world that people noticed.  Free trade isn’t really free.  Free trade requires someone providing the physical security and global ballast and market access to indirectly subsidize the rest of the system.  The Americans have provided that for seven decades, and for the last three decades they have done so without asking for anything in return.  With the Trump rise, this whole thing is now in its final years.  Perhaps in its final months.

~ Peter Zeihan, "Scared New World," Zeihan on Geopolitics, November 9, 2016



Dec 12, 2022

Donald Boudreaux on protectionism

It’s easy to understand, and excuse, intellectually unengaged people falling for protectionist fables.  And there’s certainly no mystery as to why business executives and politicians often endorse protectionist policies: protective tariffs and subsidies swell the wallets and purses of the executives, and enhance the electoral prospects of the politicians.  But it’s always baffled me that protectionism is championed by so many learned and intellectually active people who have nothing personally to gain from protectionism. 

After all, the argument against protectionism is, as they say, not rocket science.  Indeed, it can be grasped by a reasonably alert eighth grader: because the very essence of protectionist policies is to forcibly reduce the supplies of goods and services available in the home country, protectionism reduces the quantity of goods and services available, on average, for each citizen of the home country to consume.  Protectionism makes people in the home country poorer than they would be otherwise. 

Although the argument against protectionism is simple, some intellectual effort is required to understand the fact that imports do not increase overall unemployment in the home country.  A few moments of cogitation are necessary to grasp the reality that imports are not gifts, but instead represent foreigners’ demands for our exports or to invest in our country.  Some thought deeper than the surface must be made to understand that when we import more, we either export more, or we witness the capital stock of our country growing larger than otherwise, and both of these outcomes create jobs to offset the jobs that are “destroyed” by imports.

~ Donald J. Boudreaux, "The Libido for the Superficial," American Institute for Economic Research, December 8, 2022



Barton Swaim: Democratic Party is "the educated party"

The most obvious change in American politics this century is the sorting of voters along educational lines.  The Democrats are increasingly the party of educated urban elites; the GOP belongs to the white working class.  The dispute is over suburban and minority voters.  The latter still plump mostly for Democrats, although the party’s social radicalism is pushing them toward the GOP.  Voters with impressive educational credentials tend to be Democrats, and those without them lean strongly Republican. 

That one party is the educated party—that its members see themselves, in some respects accurately, as more cultured and informed than their opponents—has generated an intellectual pathology that is obvious to everyone but themselves.  Adherents of the smart-people party have lost the capacity for self-criticism.  Which on its face makes sense.  If your views are by definition intelligent, those of your critics must be dumb.  Who needs self-reflection?

~ Barton Swaim, "Why the 'Smart' Party Never Learns," The Wall Street Journal, December 9, 2022



Sequoia Capital on Sam Bankman-Fried's upbringing

SBF is from the Bay Area—the eldest son of two Stanford law professors, Joe Bankman and Barbara Fried.  His parents raised him and his siblings utilitarian—in the same way one might be brought up Unitarian—amid dinner-table debates about the greatest good for the greatest number.  One of SBF’s formative moments came at age 12, when he was weighing arguments, pro and con, around the abortion debate.  A rights-based theorist might argue that there aren’t really any discontinuous differences as a fetus becomes a child (and thus fetus murder is essentially child murder).  The utilitarian argument compares the consequences of each.  The loss of an actual child’s life—a life in which a great deal of parental and societal resources have been invested—is much more consequential than the loss of a potential life, in utero.  And thus, to a utilitarian, abortion looks more like birth control than like murder.  SBF’s application of utilitarianism helped him resolve some nagging doubts he had about the ethics of abortion.  It made him comfortable being pro-choice—as his friends, family, and peers were.  He saw the essential rightness of his philosophical faith.




Dec 11, 2022

Luc Olinga on effective altruism's omnipresence in Silicon Valley and prestigious universities

Bankman-Fried had adopted a posture, nourished by the current philosophy of Effective Altruism, omnipresent within Silicon Valley and the prestigious universities.  The EA ideology boils down to "the most good can be done by choosing to make the most money possible in order to give it all away."  Earn-to-give is the community’s leitmotif. 

The FTX debacle shows that those who sign the checks are inspired by those who look like them, who have been to the same schools as them, who come from the same socioeconomic backgrounds as them, who share their realities.  If you're different, you're almost out of luck.

~ Luc Olinga, "Crypto Is Full of FTX's Bankman-Fried," TheStreet.com, November 24, 2022





Sequoia Capital on its initial investment in FTX

Alameda was not immune to the exchange-level shenanigans that gave crypto as a whole its sleazy reputation.  But FTX had an ambition to change that.  It was built to be the exchange traders could count on. SBF needed to get the word out.  He wanted FTX to be known as the respectable face of crypto.  This required ad campaigns, sponsorship deals, a charitable wing—and a war chest to pay for it all. 

FTX did need money, after all.  And it needed that money from credible sources so it could continue to distinguish itself from the bottom-feeders who came to crypto to fleece the suckers.  So, in the summer of 2021, when FTX started to raise its Series B from a who’s who of Silicon Valley VCs, [Sequoia partners Michelle] Bailhe and [Alfred] Lin hit the “Don’t Panic” button.  “Embarrassingly, we had never tried to reach out to Sam, because we figured he didn’t need us,” Bailhe admits.  “I thought they were just minting money and had absolutely no need for investors.”  Learning otherwise, they quickly contacted SBF and organized a last-minute Zoom call between him and the partners at Sequoia—at four California time on a hot July Friday afternoon.  Bailhe was adamant, putting her reputation with the other partners on the line: “I’m like, ‘No, it’s worth it. Cancel your afternoon.’”














(The account is based on an article by journalist Adam Fisher, commissioned by Sequoia.  The article, published last September, was posted on the firm's website under "We help the daring build legendary companies.”  It has since been removed.)

Sequoia Capital on how William MacAskill and Sam Bankman-Fried met

MacAskill was visiting MIT in search of volunteers willing to sign on to his earn-to-give program.  At a café table in Cambridge, Massachusetts, MacAskill laid out his idea as if it were a business plan: a strategic investment with a return measured in human lives.  The opportunity was big, MacAskill argued, because, in the developing world, life was still unconscionably cheap.  Just do the math: At $2,000 per life, a million dollars could save 500 people, a billion could save half a million, and, by extension, a trillion could theoretically save half a billion humans from a miserable death. 

MacAskill couldn’t have hoped for a better recruit.  Not only was SBF raised in the Bay Area as a utilitarian, but he’d already been inspired by Peter Singer to take moral action.  During his freshman year, SBF went vegan and organized a campaign against factory farming.  As a junior, he was wondering what to do with his life. And MacAskill—Singer’s philosophical heir—had the answer: The best way for him to maximize good in the world would be to maximize his wealth. 

SBF listened, nodding, as MacAskill made his pitch.  The earn-to-give logic was airtight.  It was, SBF realized, applied utilitarianism.  Knowing what he had to do, SBF simply said, “Yep. That makes sense.”  But, right there, between a bright yellow sunshade and the crumb-strewn red-brick floor, SBF’s purpose in life was set: He was going to get filthy rich, for charity’s sake.  All the rest was merely execution risk.












(The account is based on an article by journalist Adam Fisher, commissioned by Sequoia.  The article, published last September, was posted on the firm's website under "We help the daring build legendary companies.”  It has since been removed.)

Sam Bankman-Fried: "I wasn't spending any time or effort trying to manage risk"

George Stephanopoulos: How do you explain the failure?  Was it inattention, arrogance?

Sam Bankman-Fried: It's a good question.

Stephanopoulos: Was it unethical?

SBF: Some part of it was just literal distraction.  I really should have spent some time each day taking a step back and saying, "what are the most important things here?"  Right?  And how do I have oversight of those and make sure that I'm not losing track of those.  And frankly, I did a pretty incomplete job at that.  I spent a lot less time looking at assets and looking at balances and positions because that's not where revenue came from.  And so I wasn't seeing as a core business driver obviously was a core risk, and that was a huge mistake of mine to not think more about that.

Stephanopoulos: And you said one of your great talents in a podcast was to manage risk!

SBF: That's right.

Stephanopoulos: That's obviously wrong.

SBF: Well, I think that there is something maybe even deeper wrong there which was I wasn't even trying.  I wasn't spending any time or effort trying to manage risk on FTX.

Stephanopoulos: That's a stunning admission.

SBF: I don't know what to say.  What happened, happened.  If I had been spending an hour a day thinking about risk management on FTX, I don't think that would've happened.  I think I stopped working as hard for a bit.  Honestly, if I look back on myself, I think I got a little cocky... I mean more than a little bit.  And I think part of me felt like we'd made it.

~ Sam Bankman-Fried, interview with George Stephanopoulos, Good Morning America, 8:10 mark, December 1, 2022





Janet Yellen on how fiat currencies are different than cryptocurrencies

Stephen Colbert: Does crypto make sense to you, and on this level?  People like Ron Paul would say, after the United States dollar went off of the gold standard, under Nixon, I believe, that we're now a fiat currency.  Things are worth what they're worth because we said that it's worth something.  "It's backed by the full faith and credit of the United States," whatever that particular phrase, that term or art, may mean.  And so, is crypto, where I create a widget that spits out a coin that I declare a value and then that number of those sets a capitalization for all that crypto out there and then people get invested, so that $20 million now, people say, "oh, that's worth $100 million," and all of that is created out of nothing.  Does that make sense to you, because there is no inherent value to the actual item itself?

Janet Yellen: I've been pretty skeptical at the outset about what the value of crypto would be to the real economy.

Colbert: But because the United States has a fiat currency, is the dollar make any more sense to you than crypto does?

Yellen: Yes, the dollar makes a lot of sense to me.

Colbert: Why?

Yellen: Because it's a natonal currency, it's well-regulated by the Federal Reserve, it has a clear mandate and people who are accountable to the public and to Congress to maintain the goals of the Fed, which is maximum employment and low and stable inflation, price stability.

~ Janet Yellen, appearance on The Late Show with Stephen Colbert, 6:20 mark, December 1, 2022



Dec 10, 2022

Jeff John Roberts on being duped by Sam Bankman-Fried

It’s not a good feeling.  In July, I sat down with Sam Bankman-Fried for over an hour at a hotel overlooking Central Park, a meeting that would be the basis for a Fortune cover story.  I was charmed by his nerdy affect as SBF, unkempt in a T-shirt and bushy hair, as he twirled a fidget spinner and rattled off tidbits about everything from M&A strategy to the macroeconomy to the importance of trust in business deals.  It was all bullshit, of course, and I didn’t see through it.

[...]

[L]ike any good con man, SBF told us a story we wanted to hear and were eager to believe.  He styled himself as a trading genius who outgrew the elite quant firm Jane Street Capital, and who appeared to run circles around everyone else in the industry.  His pedigree was immaculate with a degree from MIT, parents who both teach at Stanford Law School, and personal connections to top power brokers in Washington, D.C.  SBF also discussed philosophy and poetry and took thoughtful positions on current issues like climate change and animal welfare—offering a more likable, human alternative to other crypto CEOs, whose libertarian views can come across as stark and unsettling.

~ Jeff John Roberts, "How SBF fooled everyone - including me," Fortune, November 14, 2022

(Roberts wrote the Fortune cover story, "The Next Warren Buffett?".)



Michael Saylor on how Sam Bankman-Fried lost $10 billion of customer money

Here's the diabolical twist: I [SBF] didn't just generate $10 billion of an unregistered security to dump it on the unsuspecting retail.  That would take me 500 trading days, dumping $20 million a day, right?  He didn't do that.  What he did is he generated $10 billion in unregistered security and then just borrowed $10 billion dollars secretly from his depositors and then went and gambled it, traded it, spent it, lost it.  And that is particularly impressive.

[...]

This is also diabolical: FTX said, "we're built by traders for traders" and Sam bragged that they only charged 3 basis points trading fee and he was 30 times cheaper than CoinBase or much cheaper than Binance.  So he's stealing customers off of the other crypto exchanges by, in essence, offering near-free trading.  He's not trying to make money off the trading.  He's trying to get the assets on his platform because once he had the assets on his platform, he basically used FTX as his personal piggybank.

[...]

So Sam basically scraped billions from unsuspecting investors in Silicon Valley.  They should've know better.  He took billions from crypto hedge funds and crypto banks like BlockFi and Voyager.  They should've known better.  And then he took probably $10 billion or more from depositors on his exchange.  They have the best argument.  It's like they were staring at terms and conditions that said he's not going to rehypothecate or use their assets.  He lured them with the promise of cheap trading, high leverage.

~ Michael Saylor, interview with Valuetainment, 5:30, 11:20 mark, December 5, 2022



Dec 9, 2022

Sam Bankman-Fried on campaign donations: "I want to support great public servants"

I want to support great public servants.  If you imagine an election where everyone running on both sides of the aisle for every race was an amazing public servant, I'd say "great, I'm not needed here."  I think that if you have the opposite, where everyone was horrific - which obviously won't happen - I think then what I would start to get to is, there needs to be an informational campaign to alert people to how poorly people are being nominated here.

~ Sam Bankman-Fried, interview with Meet The Press Reports, NBC News, 10:50 mark, September 22, 2022



David Sacks on how a narcissistic fraudster plays to his audience

I just think that these types of guys - you can call it a narcissistic fraudster - they think they can talk their way out of anything.  The average person is not really used to dealing with one of these personality types...  They clearly are smart and articulate and they know what to say and they're crafting their words.  What they've learned in their life is that if they use the precise magic words with the person, they can pretty much convince them of anything, get them to do anything.  And in particular, I would say that investors tend to fall for this, not because investors are dumb, but because investors are so clear about what they're looking for and what they want.  They're predictable.  VCs, especially, we're looking for the 100x outcome.  It's easy for this type of personality to construct a story to essentially stroke the erogenous zones of a VC and sort of trick them.  And so there is probably a positive reinforcement loop that gets created in the minds of one of these people and they start to think that they can basically talk their way out of any situation.

~ David O. Sacks, "There's Something Huge They're Not Telling Us About FTX," 4:10 mark, December 4, 2022





Joseph Chilton Pearce on failure and creativity

To live a creative life, we must lose our fear of being wrong. 

~ Joseph Chilton Pearce, American author of books on human development and child development



Dec 8, 2022

Michael Novogratz on the criminal behavior of Sam Bankman-Fried

Sam is delusional about what happened and his culpability in it.  We could all be dime store psychiatrists.  There's a lot of narcissism there.  There's a lot of grandiosity, but being psychiatrists isn't going to really help.  He needs to be prosecuted.  He will spend time in jail.  They perpetuated a large fraud and it wasn't just Sam.  You don't pull this off with one person...  I'm not saying he even planned this all like a criminal mastermind.  What they did was criminal and they need to be prosecuted for it...  Stanford [SBF's alma mater] is one of the best universities in America and he worked at Jane Street and those guys are fiercely good.  Traders don't forget how they lose money.  It's kind of the DNA of anybody who spends time in this field.  So it's just kind of a pile of malarkey to say, "oh, I didn't understand how much risk we had.  These were huge bets, and they were huge bets made with my money and other depositors' money...  It's "I stole your money and I should've risk managed the money better."  It was the theater of the absurd to some degree...  Some people start off going down the path, they get in trouble and start breaking the law thinking they can get it back.  It's a tale as old as time, right?  And so you might not have started the plan of, "oh, I'm going to go rob everybody," but the moment there was one mistake you start cheating.  And then you start cheating more and then you start cheating more and next thing you know, you've got a $10 billion cheat going on.

~ Michael Novogratz, CNBC interview, December 1, 2022



Naina Bajekal on William MacAskill's work on effective altruism

The greater good has been the focus of his work for more than a decade, since he helped start the effective altruism (EA) movement, which aims to use evidence and reason to find the best ways of helping others, and to put those findings into practice.  EA holds that we should value all lives equally and act on that basis.  It is the antithesis of the old do-gooder’s credo “Think global, act local.” 

His new book, What We Owe the Future, argues we should expand the moral circle even further: if we care about people thousands of miles away, we should care about people thousands or even millions of years in the future.  The book, which has been praised by the likes of Stephen Fry and Elon Musk, makes the case for “longtermism,” the view that positively influencing the long-term future—not just this generation or the next, but the potentially trillions of people still to come—is a key moral priority of our time.  Through analyzing the risks of climate change, man-made pathogens, nuclear weapons, and advanced artificial intelligence, MacAskill has come to believe we’re living at a pivotal moment in human history, one where the fate of the world depends significantly on the choices we make in our lifetimes.

~ Naina Bajekal, "Want To Do More Good? This Movement Might Have the Answer," Time, August 10, 2022



Rep. Ritchie Torres on the SEC's failure to prevent the FTX collapse

If the SEC has the authority Mr. Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history?  One cannot have it both ways, asserting authority while avoiding accountability.

~ Rep. Ritchie Torres (D-NY), "Congressman Calls for Investigation Into Gensler, SEC’s Role in FTX Collapse," Yahoo!Finance, December 7, 2022



Dec 7, 2022

Chris Mayer on analyzing businesses and being patient

With every business there are a few key things to know.  Call it the essence of the business, call it the beating heart, call it the core engine… something!  Find out what those key things are and focus on them. 

Then, de-emphasize individual quarters, recent stock performance, earnings estimates, macro forecasts, and the like.  As much as possible, try to think like a private owner of a business.  Think of the stock you own as you would think of real estate; it’s something you plan to own for a long time and sell reluctantly.

~ Chris Mayer, "100-Bagger," December 7, 2022



Naval Ravikant on investing and financial freedom

If you don't own a piece of a business, you don't have a path towards financial freedom.

~ Naval Ravikant



MIchael Rectenwald reflects on youth vs. experience and his life's mission

Seeing photos of myself -- on the one hand, I wish that I was younger.  I don't see myself as the camera sees me.  In my mind's eye, I'm still a young man -- forever young and never aged.  I see a young man in my mirror, not a 60-something year-old.  It's why, for example, I expect to beat my very talented thirty-year-old son in tennis, why I overextend myself, why I never expect to be tired.  It's why I catch sly, half glimpses of myself that never betray me or my age, why I think I am still as attractive as I ever was. 

On the other, I am grateful that I am no longer young.  With age comes a seasoning that makes one more or less inured to life's difficulties and inoculated to its many lies.  There is a resting knowledge that cannot be replicated in youth, youth that pines for a future that never comes as expected.  If I were to offer any advice to the young, it would be to seize the day and enjoy the process of making a way for tomorrow, with faith, hope, and charity. 

And then there is the historical reality that I would not want to be young in a world such as ours, when the world is more insane than ever, and bound to get worse.  This is why I pray for my children and my grandson, and why I keep trying, in spite of seemingly insurmountable odds, to make the world more habitable for them, to endow them with liberty and hope, and to enshrine the present by leaving a legacy to them that may be meaningful and serve as a guide for them.  I hope one day that they will read my works and realize that was part of my life's mission.

~ Michael Rectenwald


(This quote was provided by Tom Woods.  Tom writes: "It's very rare to find someone late in his career, and in his 50s, who has a complete philosophical transformation.  But that's what happened with the great Michael Rectenwald, an ex-Marxist formerly of New York University...  Well, the other day he wrote something rather melancholy and introspective -- yet determined and fearless, too, that I thought you might want to see.")

Dec 6, 2022

Howard Marks on value investing

For a value investor, price has to be the starting point.  It has been demonstrated time and time again that no asset is so good that it can’t become a bad investment if bought at too high a price.  And there are few assets so bad that they can’t be a good investment when bought cheap enough.

~ Howard Marks

(as quoted by Tim Price in "The Only Thing That Matters?")



Dec 5, 2022

Alasdair Macleod on sound money

I support sound money for two very good reasons.  Firstly, it is a basic human right to choose to save, without our savings being debased by the tax of monetary inflation.  Those who are worst affected by this inflation tax are not the rich, they benefit; but the poor and the barely well-off, which is why monetary inflation undermines society and why the right to sound money should be respected.  If government gives itself a monopoly over money, it has a duty to protect the property rights vested in it.  Secondly, it is a basic right for us to own our own money rather than have it owned by the banks.  For them to take our money and expand credit on the back of it debases it.  It is an abuse of an individual’s property rights and a banking licence is a government licence to do so.  If anyone else was to do this, they would be guilty of fraud.  Banks should be custodians of our money, and it should not appear in their balance sheets as their property. 

Sound money guarantees a stable yet progressive economy where people are truly equal. It allows people to save properly for their retirement so that they will not become a burden on the state. It leads to democracy voting for small governments. It encourages peaceful trade and discourages war. It is the only path, after this mess, that leads us to long-lasting and peaceful prosperity. We really need everyone to understand this for the sake of our future.

~ Alasdair Macleod, speech given to the Committee for Monetary Research and Education in New York,  October 20, 2011

(as quoted by Tim Price in "Chauffer Knowledge and the Crack-up Boom," December 5, 2022)



Richard Feynman on education vs. intelligence

Never confuse education with intelligence; you can have a PhD and still be an idiot. 

~ Richard Feynman, American physicist

Marriner S. Eccles Federal Reserve Board Building


Dec 4, 2022

Jim Rogers on youth, experience and bubbles

… that is what happens in bubbles.  The price goes up because the price is going up. In one sense, what you want in a bull market is a kid who is too young to know that what he is doing is foolish.  You want a kid who will race into a bubble and leverage it higher and higher.  Guys like me will not make nearly so much money because we see what is going on.  The kid does not know why he is making money, which is why he is making so much money.  The rest of us are experienced enough or smart enough to know that this is going to end badly.  What you want is a kid with very little experience and just enough brains to be very dangerous.  But you need to be smart enough to know when to pull out, to save yourself from his lack of knowledge and experience, and that, of course, can be hard to do.  When things go bad, you certainly do not want that kid around— and the kid is probably not going to be around by then anyway.

~ Jim Rogers, Street Smarts: Adventures on the Road and in the Markets





Jim Rogers on apprenticeship

I often explain to young people, I benefited from being an assistant.  I learned by watching others closely.  There is nothing like on-the-job training.  Many people coming into the job market think that they have done well for themselves if they manage to leapfrog an apprenticeship.  The wise course is to start by working for someone else, and to keep one’s eyes and ears open.

~ Jim Rogers, Street Smarts: Adventures on the Road and in the Markets



Peggy Noonan on what drove Elizabeth Holmes

Elizabeth Holmes was just sentenced to 11 years in federal prison for defrauding investors in her famous Theranos scam.  People used to ask why she did it.  By now that’s clear.  She did it to be important.  She wanted to be admired.  She wished to be thought a genius, a pioneer.  She no doubt wanted money, though part of her con was to live relatively modestly—she wore the same black turtleneck and trousers most days.  She wanted status, then and now as Tom Wolfe said the great subject of American life.  And she seemed to think she deserved these things—that she merited them, simply by walking in.  One thing you pick up as you read John Carreyrou’s great reporting, in these pages and his book, is that she seemed not at all concerned with the negative effects of her actions on others.  She didn’t seem to care that investors lost hundreds of millions, people lost jobs, the great men she invited on her board were humiliated.

~ Peggy Noonan, "Psychos in the C-Suite," The Wall Street Journal, December 1, 2022





Dec 2, 2022

Derek Van Shaik on the psychological drivers of Sam Bankman-Fried

Many automatically assume crooked rich people want to get rich to be flashy, driving Lamborghinis and be covered in diamonds.  However, there's psychologically more to wealth than merely just the physical objects, such as the associated power of having wealth.  Since the crooked rich usually feel insecure, they are attracted to the power money brings to make themselves feel less insecure.

[...]

For Sam to think he would never get caught and he can outrade everyone stems from hubris and arrogance, which is his elevated sense of self worth.  However, if you look at his body language and behavior, he's quite insecure, constantly looking down in conversation, nervous jitters that test the structural rigidity of chairs, self-comforting hand holds and what appears to be constant nervous stuping smirks...  If you're thinking, "How could Sam be both insecure and arrogant?," it's the opposite side of the same coin.  Extremely arrogant people are extremely insecure.  Their arrogance is a coping mechanism to feel less insecure.  The most secure people are those who can admit when they're wrong, willing to learn and don't feel that they're unbeatable.

[...]

Is Sam a narcissist sociopath?  Possibly, to have that much arrogance, insecurity and apparent disregard for other people.  Sam talks a lot about giving his money away to charity, however constantly speaking of charity is common of a naricissistic sociopath because they are using charity to gain fame, publicity, the appearance of altruism and to hide the truth of who they really are, all the while getting tax breaks.

~ Derek Van Shaik, "How Sam Bankman-Fried LIED Non-Stop to Steal Billions,"  YouTube, 2:30, 5:25, 8:00 mark, 



Kevin O'Leary on his investment in FTX

So much due diligence had already occurred.   If you look at the cap table of who was investors in this company, it's a Who's Who of financial services.  I'm one of them.  We're all embarrassed.  We feel foolish.  But luckily, when I look at the long-term, thank goodness I make more good investments than bad ones.

~ Kevin O'Leary, "Kevin O’Leary Gets Candid on SBF, FTX Crisis," The Daniela Cambone Show, 4:00 mark, December 1, 2022



Christine McVie on writing music

Learn your instrument.  Be honest.  Don't do anything phony.  There is so much crap floating around.  There is plenty of room for a bit of honest writing.

~ Christine McVie, 1943-2022



Nov 30, 2022

Peter Elkind and Bethany McLean on what drove Jeff Skilling and brought down Enron

Just as he had when Enron was riding high, Skilling labeled ExxonMobil a "dinosaur" - as thought it didn't matter that the oil giant was thriving while Enron was nearly extinct.  "We were doing something special.  Magical."  The money wasn't what really mattered to him, insisted Skilling, who banked $70 million from Enron stock.  "It wasn't a job - it was a mission," he liked to say.  "We were changing the world.  We were doing God's work."

In the public eye, Enron's mission was nothing more than the cover story for a massive fraud.  But what brought Enron down was something more complex - and more tragic - than simple thievery.  The tale of Enron is a story of human weakness, of hubris and greed and rampant self-delusion; of ambition run amok; of a grand experiment in the deregulated world; of a business model that didn't work; and of smart people who believed their next gamble would cover their last disaster - and who couldn't admit they were wrong.

~ Peter Elkind and Bethany McLean, The Smartest Guys in the Room, p. xxi