Plus ESPN’s Leverage & Multi-Strategy Hedge Funds
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“Prophesy as much as you like, but always hedge.”
—Oliver Wendell Holmes, 1861

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Articles and Podcasts


Remove the Legend to Become One [Article]
Remains of the Day

On the art form of how to make good graphs.

I’ve spent quite a lot of time this year thinking about how to display KPIs (Key Performance Indicators) and other business intelligence and I’ve come to believe that. Making good graphs is highly underrated. A good visualization is a compression that serves to communicate better than words ever could. If a picture is worth a thousand words, a good graph can be worth 10,000.

Pairs nicely with Tufte's classic: The Visual Display of Quantitative Information.


A history of ESPN and technological revolutions.

Ben Thompson at Stratechery has been the best technology analyst I’ve read over the last half decade. One concept he talks about in various ways is the way in which technological paradigms tend to form ‘constellations’ of technologies (h/t Carlotta Perez) and how they can emerge from technological revolutions.

This piece looks at that constellation for ESPN, cable providers, and live sports.

One fascinating thing I learned: The advent of satellite distribution was really the breakthrough for ESPN. The initial idea was to just broadcast in Connecticut. However, when Rasmussen turned up to a meeting, it turned out the recently launched Satcom satellite meant that ESPN could access every home in America, or at least every cable operator, for an even lower price than it cost to reach only the state of Connecticut.

Talk about right place, right time!

(as an aside to the college football fans - it may be that NIL launched at exactly the top and it is ‘down only’ at this point.)
The Fort - An Entrepreneurship Podcast

A good conversation on the realities of managing and operating a small business.

One important lesson? Seemingly “closely” aligned incentives can still cause major issues.

“ of the things that we've had to learn the hard way on that front is it's really important that it is the exact same line on the spreadsheet that you're incentivizing people off of and not some modulation on it. As an example, paying a CEO off of EBITDA when you yourself are incentivized off of cash distributions from the business, those are two completely different things. They reside in a similar place on the spreadsheet, similar vertical spot on the spreadsheet. They're radically different and they incentivize radically different behavior.

Another is balancing the right amount of hierarchy in an organization.

I think if you're, if you're too flat, then you're the folks at the top of the organization don't feel like they're using their gifts to the, to the max. They're having to do a lot of things that they're not gifted at doing.

if you're too deep, then information can't go from bottom to top and in an efficient way. And I think as leaders, we have to be constantly diagnosing this through, you know, skip level meetings. So make sure that you're not just talking to the people that report to you. Make sure that you're talking to their direct reports. If you're in a manufacturing facility or construction business, make sure you're visiting the site that you're talking to folks like, Hey, what's, what's frustrating? What, you know, what, what do you wish could happen? And then if they're voicing strong frustrations and those, they're new to you and they're new to that person's like, say, second level manager, then … you may have too much, too much middle management.

For more on hierarchical vs. flat structures, I loved The Origin of Wealth.

Flirting with Models

A great list of investing lessons from. A critical point he makes is that for a strategy to outperform over the long run, it almost necessarily needs to perform bad in the short run.

“the fact that a strategy doesn’t work in certain environments is not a critique. It should be expected. If a strategy worked all the time, everyone would do it and it would stop working.
we need the strategy to be sufficiently difficult to stick with to prevent the premium from being arbed away. If an investment approach is viewed as easy money, enough people will adopt it that the inflows will drive out the excess return. So, almost by definition, certain strategies – especially low frequency ones – need to be difficult to stick with for any premium to exist. The pain is, ultimately, what keeps the strategy from getting crowded and allows the premium to exist.”

If there was a magic money machine, then it wouldn't last for very long. I believe strategies such as trend following work, in part, because they ‘hurt’ so much of the time.

“...for most major low-frequency edges, “hard” is going to be behavioral. The strategy has to be hard enough to hold on to that it does not get arbitraged away.

Which means that for any disciplined investment approach to outperform over the long run, it must experience periods of underperformance in the short run.”

Will England - A Primer on Multi-Strategy Hedge Funds [Podcast]
Invest Like the Best with Patrick O'Shaughnessy

One of the best inside looks at what ‘pod shops’ do. The big dog in this space is Ken Griffin's Citadel but there are many more. Even though most pod shops are not really accessible by retail investors, understanding what they do and why they do it is a pretty great way to learn about portfolio construction.

Byrne Hobarty's Capital Gains has a good explainer on the topic as well.

Asset-Allocation-in-a-Higher-Rate-World [Paper]
AQR Alternative Thinking 2023

On how investors may want to reconsider portfolio allocation in a higher interest rate world.

“If history is any guide, all else isn’t equal. Equities and illiquid alternatives have tended to underperform when cash rates are higher. Bonds have done a better job of passing the cash rate on to investors, and liquid alternatives have done best of all.”

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The Interesting Times is a short note to help you better invest your time and money in an uncertain world as well as a digest of the most interesting things I find on the internet, centered around antifragility, complex systems, investing, technology, and decision making. Past editions are available here.
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