Paul Tudor Jones, summer of 1987, right before the crash.

“There are times when the risk-reward ratios are so favorable that you simply have to load up and swing for the fences”

“I work too damn hard to accept mediocre results”
1988, after the crash and a 200% year.

"We're cowboys in the purest sense."
“Ego is the single most destructive force you can confront in business. I treat every trade as a business decision. You have to be sure you have the discipline to get out of a losing trade.”
I've been revising/re-writing a big piece on how Jones shorted generational equity bubbles 1987-1990.

Looking for a few people to read the draft and give feedback over the next few days. If that's your jam drop me a dm.

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More from @NeckarValue

15 Mar
Long-term market charts from CS

Size of world stock markets over 120 years

plus.credit-suisse.com/rpc4/ravDocVie…
Returns and change in industry composition in the US vs UK

Interesting how both looked fairly similar - mostly rails in 1900. Today the UK has a higher weighting in oil and gas and industrials?!
This one's for @lhamtil

They built a 100 year EM basket to compare returns. This would have been fine if Japan hadn't lost WW2?! (Russian Revolution was also a bummer)
Read 4 tweets
14 Mar
From the book Engines that Move Markets: the British railway boom, 1820s -1840s

When interest rates dropped from 4% to 2.5% "it was not long before a remarkable effect occurred in the general increase in all kinds of schemes and speculations." ImageImage
Factors as the bubble popped:
-Continued need to raise capital overwhelmed investors (aka cash burn)
-Projections "wildly overoptimistic" and underestimated competition
-"A fair amount of fraud"
-Higher rates, decline of liquidity ImageImage
This was hilarious: they tried to regulate the boom by imposing a deadline for railroad proposals. More than 800 groups of promoters fought each other to get their coaches into London on time, jamming up the roads. "Feed the ducks while they're quacking." Image
Read 4 tweets
8 Mar
Some notes from the book Dot.con "How America Lost Its Mind and Money in the Internet Era," a play-by-play of the dotcom bubble.

Written in 2003 the pessimism around the web is striking in hindsight.

"Online economy... grossly exaggerated. Internet not a disruptive technology"
"Most internet startups failed because they were based on the mistaken premise that the internet represented a revolutionary new business model, which it didn't." Oof.

"Any retailer is basically a distributor. And arduous and costly operation."
Yes, there were bears. But many had been bearish long before the actual bubble took off.

"You've got companies going public that don't even have earnings."

"Everybody is tired of being bearish and wrong. Clients don't want to raise cash."
Read 10 tweets
26 Feb
Newsletter is out.

Investors aspire to be "learning machines." Yet we get emotionally attached to the ideas that made us successful, they become part of our identity.

A beginner's mind is rare because it is uncomfortable to question the assumptions on which our success rests.
Which is why I have a lot of respect for people who reinvent themselves.

One of my favorite examples is Barry Diller’s descent from the pinnacle of Hollywood into the "new world" of interactive TV and later the internet.
Diller rose rapidly in Hollywood: from the mailroom of the William Morris agency to ABC where he spearheaded made-for-TV movies.

He was picked by Charlie Bluhdorn to run their Paramount Pictures studio. Then he ran Fox for Rupert Murdoch.
Read 16 tweets
26 Feb
New 60 minute interview with John Malone

art19.com/shows/kindredc…
"Bill Gates came to see me with a six pack of beer and a pizza when negotiating a contract. He told me one time he said, John, forget about hardware. There's no piece of hardware that can't be emulated in software. And damn, I failed to listen to it."
Sun Valley:
"After hearing Gates describe his new company, sitting with Warren Buffett and having him ask: 'would you invest in that?' And I said, Hell, I don't know. Warren, I don't see the moat. It's probably pretty good. But isn't he gonna have a hell of a lot of competitors?"
Read 11 tweets
13 Feb
[24] Growth vs value
"If you’ve ever watched one of those bank heist movies where they’re trying to get into the vault. They have two sets of keys, and two different bank tellers, and they twist together. Unless you have both of them, you’re not going to get into the vault."
"I’m looking for stocks with high barriers to investment. I need things that keep out my competition. They can be either physical barriers, like a geography with less competition, or they can be intellectual barriers."
Read 9 tweets

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