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Ming Zhao Profile picture
@FabiusMercurius
Jul 18, 2021 • 54 tweets • 16 min read • Read on X
Each week I write a 🧵about investing, startups, or a cool market segment. All of it is knowledge my mentors & friends have taught me over the years.
🙏💗Now I'm passing it forward.

Here's a megathread of all past & future 🧵s. I'll be updating as we go. If you <3, plz share!
👇
1/ 💸 Jim Simons’ Playbook: King of Quant 💸

90% of active managers fail to beat the market, but Medallion boasts >40% annualized returns.

What gives?
Hint: it's more than math. 👇
bit.ly/3etG1qH
2/ 💰 George Soros' Playbook 💰

So many ppl talk about Soros ("he broke the Bank of England!", "Reflexivity FTW!") but it's so hard to find clear, easy-to-follow explanations of:

i.) what reflexivity actually means
ii.) the significance in 2021 👇
bit.ly/3ij9mVP
3/ 👺 12 Ways to Spot a Lying CFO 👺

Stocks move on earnings, so execs will manipulate earnings. How can u spot their accounting gimmicks ahead of time?

@goodalexander and I give a rundown of the top shenanigans execs use(d) to cook their books. 👇
bit.ly/3xN07DX
4/ 🌴⛵️ Tax Evasion For Traders & Founders ⛵️🌴
(How Billionaires Pay Less Than Secretaries)

With tax season around the corner, here’s a compiled list of (mostly legal) hacks to reduce your future bleeding. 👇
bit.ly/3rfHeXP
5/ 🧐How to Read 10Ks Like a Hedge Fund 🧐

“Fundamentals don’t matter anymore!” I’ve heard this a lot lately on Fintwit.

But, for those who’ve diversify beyond $GME and $DOGE, here’s a primer on what metrics fundamental buy-side PMs look at and why. 👇
bit.ly/3BdyYMo
6/ 📝 How to Make Sense of Earnings Calls 📝

You hear about the week's hottest earnings & excitedly tune in to your 1st call.

[ 2min later ]
"What r they talking abt? How does this help me trade??"

So many metrics, which are important?
Here's a guide.👇
bit.ly/3ewMO2R
7/ 📉Why #Inflation Triggers A Sell-Off? 📉

News of CPI surging 4.2% sent equities & crypto to hell.

WHY??

What are the mechanics of how inflation affects equities, and why is tech falling hardest?
A thread on inflation's 1st & 2nd order effects. 👇
bit.ly/36HCOiP
8/ 🪞 How Hedge Funds Do Post-Mortems 🪞

"Pain+Reflection=Progress" ~Ray Dalio
The post-mortem is the hedge fund PM's leg day: can't skip. It's a systematic exercise that mega boosts performance.

@2ChaseGreatness & I explain how to properly do one👇
bit.ly/3ip1EJE
9/ 💻Tech Sector Primer 💻

The analyst next door won't shut up about the weather. "Cloud. Fog. Lakes. $SNOW!"

Soon it'll be animals. "Hive. Pig. Python!"

Welcome to tech, the most confusing sector w/ the most confused investors. 👇
bit.ly/3kpwNzs
10/ 💿Semiconductor Industry Primer 📀

Semis are 🔥🔥 in 2021! But how to trade ‘em?
Hot take: chips trade like oil, not tech.

- Ecosystem overview
- Supply chain
- Drivers
- Macro catalysts
- What's going on in 2021?
(The COVID run-up & sell-off)
👇
bit.ly/3BhUjEi
11/ 📈 Investing through inflation: What to buy? What to avoid? 📈

Everyone’s talking about inflation.
Dalio. Druck. Buffett.

Is exploding inflation a real concern or just another cock-n-bull from 2008 PTSD?
And how can you win with ur portfolio? 👇
bit.ly/36IzvI9
12/ 🍿 AMC Gamma Squeeze Explained in 3 Pictures 🍿

Best time to learn about gamma squeeze was for $GME.
2nd best time to learn is now. For $AMC.

You don't needa understand gamma, vega, vanna, theta. You just gotta understand 3 simple pictures.👇
bit.ly/3xTRyHy
13/ 💉Biotech Industry Primer 💉

A hot nurse stabs one in ur arm. Wohoo! Ur immune to COVID!

Now how did this lil vax make it from bench to bedside?
An overview of the biotech market from pre-launch FDA approval to post-launch supply chain & pricing. 👇
bit.ly/3BbKsQy
14/ Corporate Debt: A Need-to-Know Guide for Equity Investors

1/ Get a cup of coffee.

In this thread, @10kdiver and I explain how & why you should add corporate debt analysis to your investment research. 👇
bit.ly/36NxpGQ
15/ 🎶Trader Jargon 101: How to Talk Like a Real Trader🎶

Learning the lingo was the #1 biggest hurdle that I experienced on the trading floor.

Here's 20 top terms to get you sounding smart. 👇
bit.ly/3ijcrFn
16/ 🏦Fed Jargon 101: A Primer on Hawks, Dots & Monetary Policy 🏦

Every trader obsesses about the Fed.
Why?

A 🧵 on how the Fed moves markets, controls your PnL & the odd lingo we use to talk about it. 👇
bit.ly/3riIr0z
17/🕸️Inside the Ransomware Economy 🕸️

Maybe it’s taboo to learn business strategy from a cybergang. But the ransomware industry-- from supply chain operations to market microstructures-- is truly genius. 👇
bit.ly/3ksPxhk
18/ 🤖What "alternative data" do hedge funds use? 🤖

Dataminr raised $475M at $4.1B valuation 👀

Hedge funds used to swarm at "alternative data" like pigeons at bread crumbs.
Why?
What constitutes alt data?
Does it actually generate investment alpha? 👇
bit.ly/2UlQE80
19/🙈5 Startup Lessons I Learned The Hard Way🙈

6 months ago I left as CTO/co-founder of my first startup.

Here are my biggest mistakes & takeaways so that hopefully you avoid them. 👇
20/ 👟How to side-hustle $10k+ a month👟

A friend of mine has zero finance background, never reads Buffett and makes 40% returns trading.

How?
He flips sneakers. 👇
21/ 💰8 Billion-Dollar Fintech Trends Before 2030💰

Gary Gensler's on a witch hunt
Chinese Edtech's melting faster than quicksand...

What's next??

Here's 8 consumer fintech trends that MUST HAPPEN this decade👇
22/ All about SPACs!

SPACs -- You've certainly heard of them. Maybe even traded a few! But like ... how do they actually work again?

This🧵dives into:
What are SPACs?
When/why to invest in a SPAC?
Risks in the "investor journey"?
Why 2020's explosion?
👇
23/ A Brief History of Options

24/ 🥷 Carl Icahn’s Alpha 🥷

#1 most feared investor on Wall St.
31% annualized returns since 1968.

How did he do it?
Carl Icahn’s playbook.
👇
25/ Alpha vs. Beta: Properly Measuring Your Returns

26/ Ray Dalio On How the Economy Works
27/ The Game Theory of Investing + Dating
28/ Evergrande Meltdown

29/ Beyond Evergrande & Contagion

30/ American Shadow Banks

31/ Crypto Market Map

32/ Exchange Microstructures
33/ Controversial (maybe?) Take on Yield Farming
34/ Where Crypto Yield Comes From

And why it’s so damn high
And is it sustainable?

https://t.co/GDUxFFNWCS
35/ DeFi's biggest unsolved problem: X-margining

36/ Institutional Crypto Strategies

37/ Crash Course on Options Trading

38/ Making Sense of Options Chain Data
39/ Hot-takes on Debt

40/ Ten Trading Hacks Nobody Talks About

41/ Ten Books Every Investor Should Read
42/ Learn About Options!
43/ Kelly Criterion

44/ Factor Investing Explained:

45/ Bear Market + Defi Yield Farming

46/ The 11 Economic Moats You Gotta Know

47/ Resources for learning fundamental investing
48/ One-time earnings bombs to learn and pay attention to 💣

(More fundamentals!)

#SucceedingInBearMarkets
49/ Day in the Life of a Pod Monkey

(the haters r enraged by their own cognitive dissonance)

50/ Hidden Fuckery in Equities Market Structure

51/ Different Types of Hedge Funds
52/ What is Private Equity?
53/ Crash Course on Industry Analysis

• • •

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More from @FabiusMercurius

Ming Zhao Profile picture
May 27, 2023
Nvidia is about to become the 1st trillion-dollar chipmaker, after surging $200B in valuation in a single day.

But when cofounders Jensen, Chris, & Curtis started the company in 1993, they had only $40K in the bank.

Here’s Nvidia’s founding story, from 0 to Taxman of AI.
👇
🧵/ ImageImage
1/ On Day 0
The idea came together over breakfast at Dennys — to bring 3D graphics computing to the burgeoning video game industry.

The risk was clear—$10M+ initial capex needed to ship the first accelerator with no pre-committed customers, no funding, and huge technology &… twitter.com/i/web/status/1…
2/ Cofounders take action

So Jensen quit his director job at chipmaker LSI Logic (now Broadcom). And Chris and Curtis quit their engineering jobs at Sun Microsystems.

Nvidia initially had no name and the co-founders named all their files NV for “next version.” When the founders… twitter.com/i/web/status/1…
Read 12 tweets
Ming Zhao Profile picture
Apr 15, 2023
🔎How to Read a Term Sheet

VC term sheets are one of the most talked-about & least-understood docs in existence.
What's dirty, what's standard?

Whether you're building a company or thinking about it, as founder or employee:

Here's what the VCs know that you need to know👇
🧵/ Image
0/ the basics

Your objective: build cool shit
VC's objective: achieve maximum rate of return

Interests on both sides usually align — until they don't.

Term sheets spell out the:
(1) control rights, and
(2) economic rights

of both parties as the company goes from 0->1.
Key parts:

- Valuation is always the 1st (&only) thing people talk about.

But other subtle clauses can and do foil a high val many times over to sour deal economics.

These include:
- Liquidation preference
- Participation rights
- Voting rights
- Conversion
- Anti-dilution Image
Read 19 tweets
Ming Zhao Profile picture
Apr 9, 2023
8 Underrated ChatGPT Prompts for B2B Sales

(with real examples, each scored #/10 on usefulness & accuracy)

👇
1/ Sourcing potential clients
score: 9/10

Prompt:
"Find 50 [insert business, eg. brokers] in [target region] that [do X, eg. offer US stocks on their investment app]?
Indicate each's website, HQ, & [other relevant info: eg. their custodial partner]. Put everything into a chart.
2/ Forming Google Dork queries to refine souring
score: 9/10

If your clients are also clients of X & if you know what terms are in a standard partnership agreement, you can Google DORK to source many more "hidden" candidate clients that have no publicly announced partnerships!
Read 11 tweets
Ming Zhao Profile picture
Mar 25, 2023
Dissecting the Impending CRE Crisis

Soon u'll hear a lot more on CRE.

Why? B/c US banks & PE firms are headed for real estate doomsday.
4 collapses in 11 days
$270B in CRE loans due EoY
$3B+ defaulted in March 2023 alone

What is CRE & why does it matter?
What's next?
👇
🧵/… twitter.com/i/web/status/1…
1/ What is CRE?
"Commercial real estate" = property for business

The US CRE industry is a $20.7 trillion market.

Core segments include:
- office
- industrial
- multifamily
- retail
- hotels
- land
Investors specialize into 3 major investment strategies:
- Core
- Value add
- Opportunistic

Core:
- low risk, "steady income" play
- safe geos (NYC, SF)
- high starting occupancy
- target IRR: 6-9%

Value add:
- medium risk, "asset appreciation" play
- investor must put in work… twitter.com/i/web/status/1…
Read 14 tweets
Ming Zhao Profile picture
Mar 16, 2023
BREAKING:
Another wrinkle in the regional banks / $SIVB / $SBNY saga.

Retail investors about to lose $𝟑𝟏𝟎 𝐌𝐈𝐋𝐋𝐈𝐎𝐍 𝐓𝐇𝐈𝐒 𝐅𝐑𝐈𝐃𝐀𝐘— $130M on SVB + $180M on SBNY.
But NO ONE is talking about it.

WSB mods are even censoring posts about it.

What’s going on?
👇
🧵/
1/ The News

On 3/14, National Securities Clearing Corp (NSCC) said it will no longer accept $SIVB & $SBNY exercise. Settlements will be be broker-by-broker.

What does this mean?

In short, things are about to get fucked.
Put holders are about to get WIPED.

Let me explain ...
2/ Expectation vs Reality

Normally if u buy a put and stock --> $0, u should make a BOATLOAD of $$! Right?

Wrong
Not this time
Not on $SIVB

Why?
u can only cash in gains via 2 ways:
a) sell
b) exercise

For SVB puts, depending on ur broker, u might not be allowed to do either!
Read 13 tweets
Ming Zhao Profile picture
Mar 10, 2023
🏦📉 SVB Crash Explained📉🏦

Silicon Valley Bank—#16 largest US bank with $212B — just crashed 60% in 1 day & fell 22% post-close. Stock halted now.

@BillAckman is calling a US gov bailout.
@peterthiel is calling a bank run.
JPM, BAC, WFC all dropped 6%.
What's next?

Is this… twitter.com/i/web/status/1…
1/ How banks make money

Let's start at the beginning: SVB is a bank.
Banks make 💸💸 by taking in deposits & lending back out at higher rates.

This spread btw interest earned on loans vs paid on deposits is called NII (Net Interest Income).

NII is SVB's #1 profit source: ~73%
2/ How banks lose money

SVB's NII comes from 2 main sources:
1) interest on loans to startups
2) yield from fixed income investments (treasuries, MBS)

So SVB loses $ when:
1) startups default on debt
2) interest rates rise and SVB must sell its FI investments at a realized loss
Read 16 tweets

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