- Fascinating read on how to price a data asset.
- Relevant especially with the rise of AI. At first quantity matters here but “as training sets grow ever larger, it’s often more efficient to do this than to acquire the next token; beyond a certain point, data quality scales better than data quantity“.
- “So there you have it: 5000+ words on data pricing. We’ve covered use cases and users; quality and quantity; internal and external value factors; pricing axes and maturity curves; table stakes and usage rights; and much more.“
Misc
Miscellaneous is often where the gems are.
Major Sociological Theories
- Useful list to broaden horizons on one of the most important, yet often overlooked disciplines especially in financial circles.
Old Maps Online
Private Equity Net Cashflows
- PE funds have called far more capital than they have distributed, almost on par with what was seen during the GFC.
- This is a serious issue for LP liquidity.
- Source.
Failure Mindset
“Perfection is impossible. In the 1526 singles matches I played in my career, I won almost 80% of those matches. Now, I have a question for you.
What percentage of points do you think I won in those matches? Only 54%.
In other words, even top-ranked tennis players win barely more than half of the points they play. When you lose every second point on average, you learn not to dwell on every shot.
You teach yourself to think, okay, I double-faulted … it’s only a point. Okay, I came to the net, then I got passed again; it’s only a point. Even a great shot, an overhead backhand smash that ends up on ESPN’s top 10 playlist. That, too, is just a point.
And here’s why I’m telling you this. When you’re playing a point, it has to be the most important thing in the world, and it is. But when it’s behind you, It’s behind you. This mindset is really crucial because it frees you to fully commit to the next point and the next point after that, with intensity, clarity, and focus.
You want to become a master at overcoming hard moments. That is, to me, the sign of a champion. The best in the world are not the best because they win every point. It’s because they lose again and again and have learned how to deal with it. You accept it. Cry it out if you need to and force a smile.”
— Roger Federer (via FS).
Private Companies
- 87% of companies with revenues above $100m are private.
- Source.
Fighting the SEC
- The SEC rulemaking has been under legal siege under Gensler – here is one reason why.
- “A recent study by Harvard Law School professor John Coates found that Wall Street has rushed to the 5th Circuit. Coates, who served as Gensler’s first general counsel at the SEC, says firms are challenging the regulator’s rules in court more often under the chair than his immediate predecessors. He said that, as of February, 80% of those challenges during Gensler’s tenure were in the 5th Circuit.“
Chevron Deference – What Does it Mean?
- The overturning of the so-called Chevron doctrine has huge far-reaching ramifications (Claude.ai summary via MR) in how the US writes, interprets, and implements administrative laws.
- Here is a great detailed analysis (before the ruling) of its implications and path forward.
Archegos Story
- The timeline. JEF CEO comes out on top.
Transformers
- The story of how eight Google employees wrote the most consequential paper in modern technology today.
Shape of Information
- You are gifted 100 bottles of wine, but one is poisoned. You have 7 tests available.
- Is there any way to identify the poisoned one?
- A lesson here for how we build information.
A few short stories.
- Great read.
PE Fundraising Concentration
- “Fundraising in 2023 was more concentrated than in any year of the prior decade, with 47 percent of all dollars raised accruing to just 25 managers“
- Source.
Remote Jobs
- “Two things on remote jobs is really fascinating right now. So pre-pandemic, there’s — at any given time, there’s 15 million, 20 million jobs that are posted on LinkedIn actively. And pre-pandemic, it was roughly 2% of all jobs on the platform were remote jobs. If you go back 2.5 years ago, it peaked. 20%, 21% of all jobs on LinkedIn were remote jobs, which is pretty insane to see that jump from 2% to 21%. And now that number is back to 8%, so it kind of peaked up and now it’s starting to come back down again. So we pay a lot of attention to kind of how the labor market is shifting through remote work, and it seems like that trend is coming down” Linkedin CEO.
- Source: The Transcript.
PE Dry Powder
- Many people talk about the absolute value of PE dry powder. Indeed this hit a record last year of $2.2 trillion – fundraising continued (at a slower pace) against a dramatic slowdown in dealmaking.
- However “Dry-powder inventory (the amount of capital available to GPs expressed as a multiple of annual deployment) increased from 1.1 years in 2022 to 1.6 years in 2023 but remains within the metric’s normal historical range“.
- Source.
95 Theses on AI
- Interesting list.
- “Decisions made in the next decade are more highly levered to shape the future of humanity than at any point in human history.“
- “Technological transitions are packaged deals, e.g. free markets and the industrial revolution went hand-in-hand with the rise of “big government” (see Tyler Cowen on The Paradox of Libertarianism).“
- “Natural constraints are often better than man-made ones because there’s no one to hold responsible.“
Sports League Investing
- A nice report on investing in sports teams, leagues, and related businesses from JPMAM.
- Why now? Historically ownership of sports teams in the US was for the ultra-wealthy, but this is about to change.
- “Forbes also constructs a valuation index for each league. As shown below on the left, these indexes have substantially eclipsed the S&P 500 since 2005. To be clear, sports teams are much more expensive than equities: most teams are now valued at 5x-12x sales compared to ~3x sales for the S&P 500.”
Biotech Startups
- “According to the latest Pitchbook data, venture creation in biotech hit its slowest quarterly pace in eight years during 1Q 2024. With just over 60 new biotechs raising their first round of financing, the sector’s company formation activity has slowed 50-60% from its historic peak in 2021.“
- The piece argues why this is a positive for the health of the sector.
- Source: LifeSciVC.
50 Things I Know
- “I know that the legal profession does a great job of identifying competence and rewarding it financially. Cheap lawyers are expensive.“
- “I know that environmental influence is the most effective form of behavioral control. Accordingly, if you want radical change, radically change your environment. Being in the wrong city will cancel out years of self-improvement.“
- More here.
Marijuana Tops Alcohol
- “Daily or near daily marijuana use grew by 269% from 2008 to 2022, according to an analysis conducted by Jonathan Caulkins, a Carnegie Mellon University professor.“
- “Meanwhile, the prevalence of daily or near daily alcohol use fell by 7%.“
- Source: Axios.