The average bear market since 1945:
-32.9% drawdown
12 months to go from peak-to-trough
21 months from the bottom to get back to new highs
13 bears in that time would be one every 6 years (on average)
https://t.co/8havAmFlTj
This week’s value investing news:
Legendary Deep Value Investor Marty Whitman on Investing Safe & Cheap (Classic) (WT)
Cheap stocks aren't the reason value is winning (LM)
Deep Value Investing: How Stock Buybacks Create Shareholder Returns (AM)
"Look at your portfolio as little as possible."
"The downs hurt me more than the ups made me feel good."
Cliff Asness on the one lesson he would teach the average investor.
@wsengy1@WalksWallstreet “Nepo baby”, WTF is wrong with you! You know nothing about him and his path to success and failure.
I can tell you for certain. You couldn’t be more wrong about him.
Steve Eisman literally explained why Anthropic's IPO story has a hole in it.
> His answer: "there's stuff in the Anthropic prospectus that is extremely negative."
" The Big Short investor sat on CNBC two weeks ago, after most people had read the filing and called it all good news. "
- The filing stops at the second quarter. No third quarter numbers. (01:34)
- He says there is enough in it to see them anyway. And his read is blunt: revenue growth "slowed dramatically." (02:45)
- His numbers: sequential growth of 147% in Q2. Then 45% in Q3. (04:41)
- Then the part that bothers him more. Divide revenue by compute spending. In Q2 the ratio was 2.08. In Q3 it fell to 1.7. Each dollar of compute started bringing back less. (05:57)
> His name for the cause is "the end of token maxing."
He is honest about the gap. The Q3 figures came from people outside the filing. "I can't confirm that it's 100% true," he says, though he calls them pretty reliable.
In January at Davos, Dario Amodei showed his own curve, zero to ten billion dollars in three years, and admitted it would be crazy if it kept going.
Eisman thinks the crazy part is already over.
The clip runs six minutes on CNBC's YouTube. Almost nobody stays for the efficiency ratio.
Dude just got profiled by the WSJ. Quite a story.
Christian Lamarco, 31. Went to a small Christian college in Pennsylvania with no Wall Street recruiting pipeline.
Once drove to Carnegie Mellon to compete against Ivy Leaguers in a stock-picking contest. Finished second. Won $100.
Cold-emailed his research to hedge funds, landed a job at a Chicago long-short fund, then quit in 2019 with just a few months of savings to start Culper Research.
Moved to NYC, working out of a Brooklyn apartment. His team? Just two analysts.
They started investigating Nvidia last year, then gave up. They doubted three guys could uncover something Wall Street had missed about the world's most valuable company.
Picked it back up in March.
Interviewed former Nvidia employees, dug through corporate filings in Singapore and Malaysia, examined scrubbed code, even studied YouTube footage outside a Taiwanese noodle shop.
May 13: After a sleepless night, a bagel and a cigarette, he published a 40-page short report flagging Nvidia’s China exposure and Jensen Huang’s relationship with Alice Huang.
The next day, Nvidia hit an all-time high.
Nobody cared.
Six months later, the story blew up…
Per the Wall Street Journal, its costs rose $3 billion in a quarter while revenue grew $1 billion. Two senior executives have also left as an IPO reportedly gets closer. Steve Eisman, who bet against the housing market before 2008, isn't predicting OpenAI fails. He says it's not too early to think about it.
Watch the full video for the risks he's watching. Link in bio.
Mike Green thinks passive investing helps explain why cheap stocks stay cheap.
"The aggregate marginal flow is against it."
His argument: value investors buy based on price versus worth. Passive funds allocate by market value.