2024 was Exceptional

  • Once S&P 500 return is decomposed into factors 2024 really stands out.
  • … What is particularly interesting about 2024 is how much of the S&P 500 return came from non-systematic (i.e., idiosyncratic) returns, driven by the significant appreciation of the “Magnificent Seven” (Mag-7), which now account for 35% of the S&P 500. Idiosyncratic returns are company specific and by definition should be uncorrelated and random.
  • In fact, idiosyncratic return has never contributed as significantly to the overall S&P 500 return as it has recently. Over the trailing 24 month period, idiosyncratic returns have accounted for 21% of the 51% return of the S&P 500.
  • Will it repeat?
  • Source.

Knowing Things is Hard

  • A dictionary of how hard it is to get true knowledge – biases and more.
  • FFriedman’s Law of Anecdotes (2010) “Distrust any historical anecdote good enough to have survived on its literary merit”
  • BBrandolini’s Law, the Bullshit Asymmetry Principle (2013): “The amount of energy needed to refute bullshit is an order of magnitude bigger than that needed to produce it.”
  • C – … Predictions, like advice, often tell you more about the person giving them than about the world.
  • DDefensiveness: its embarrassing to be wrong in public, so once you have publicly committed to a position its hard to change your mind. 

FOIA Search

  • “Every year, the SEC spends ~$14 million responding to 10,000+ FOIA requests. If the SEC responds to a FOIA request with a B7A exemption, that indicates the subject company is likely under an undisclosed SEC investigation, which is “associated with significant negative future abnormal returns.”
  • With FOIAsearch.com, you can easily find all past FOIA requests on a company and B7A investigation exemptions in a single search.
  • Source.

Jensen Huang

  • Both Huang’s aunt and uncle were recent immigrants to Washington state; they accidentally enrolled him and his brother in the Oneida Baptist Institute, a religious reform academy in Kentucky for troubled youth,mistakenly believing it to be a prestigious boarding school. Jensen’s parents sold nearly all their possessions in order to afford the academy’s tuition […]
  • [He] was frequently bullied and beaten. In Oneida, Huang cleaned toilets everyday, learned to play table-tennis, joined the swimming team, and appeared in Sports Illustrated at age 14. He taught his illiterate roommate, a “17-year-old covered in tattoos and knife scars,” how to read in exchange for being taught how to bench press. In 2002, Huang recalled that he remembered his life in Kentucky “more vividly than just about any other”
  • Source.
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