1/ Releasing a redacted Lux quarterly letter to LPs.
Some strong views of
-a catalog of an excess of excesses
-what catalysts cause the current market frenzy to end
(preview: LP indigestion)
-what we are advising our Lux family companies
-much more…
2/-The importance of HEIGHTENED HUMILITY in times like these (where source of ‘success’ can be easily mistaken)
-Telepresence helps us connect with far-flung founders but true presence (in person) helps our team connect like never before
-Where a CONSENSUS of CONCERNS is CENTERED
3/ Time travel with us a year hence—
reflecting back on the year that was.
Which of the 2 paragraphs below do you expect to read in Q3 2022?
4/-Is now time for CAUTION or throwing CAUTION to the wind?
-Valuations have risen
diligence fallen &
EXCESS is in EXCESS
-Preparing for the turn—when it comes
is wiser than predicting—when it may
5/ An excess of excesses—or what things wicked may this way come…
As Fed + central banks dole out dramatic distortion of discount rates, duration and the “true” cost of capital into markets…
A scene from ‘Deadwood’ comes to mind…
6/ -In just the last 12 weeks, startups raised more than the entire 99-00 .com boom/bust
-Character is built thru hardship + steep slopes
Yet today’s hero’s journey has given way to flattened slopes
-Thus far all news has been good news—which to realists—portends bad news.
7/ Failures comes from a failure to imagine failure
Good times let guards down
making co’s vulnerable to the silent artillery of time
LP’s whiteboard of GPs coming to market
looks like A Beautiful Mind
indigenstion of LPs + pace of new commitments
cant match pace of new raises
8/…before continuing…
ht @TheRealCarlChi1 for the image of investor swim lanes then + now
9/ The “Hemingway Hinge”…
A few funds with AUM $50-100B taking page from Carlyle,Apollo, KKR + now TPG will…
turn once cultivated intimate partnerships
into calculated intentions to go public becoming institutional corporations, fully diversified supermarkets
10/
-We have benefited from unusual demand—just as we caution against its unlikely persistence in its current form.
-we said 90% of SPACs would be CRAPs
-Some deals will prove…less kosher than a kilebasa sausage smothered in swiss cheese
-The Appointment in Samarra…
11/ Indefinitely Modified Paths—the wisdom of William James & Jurassic Park.
“Life finds a way”… and so do incredible founders
in every cutting-edge industry we find + fund…
12/ Space race is real—over 12 nations have astral aspirations
took humanity til 1961 to launch 1st 👨🚀 in space
last mo there were 14 in space @ same time
Do wise things when others are doing provably foolish things
And do what may appear to be foolish that’ll prove to be wise
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1/ My take on Trump in exchange with one of my smartest market friends.
Bizarrely I’m more sanguine.
Either it’s the greatest policy mistake and blunder of a rollout ever. OR it ends up with some grand bargain for those that want to ensure certainty and stability by doing long term deals or otherwise face massive undulating volatility in his flip-flopping, fickle whims.
I think overall across all domains (tech cos, universities, law firms, countries) they got very confident and then cocky ... I think it started with the Silicon Valley and Elon flip over… And then Zuck shifting his board and taking a knee… And he saw powerful person after powerful person pledging fealty out of fear. I think that further emboldened them the "we’re fucking here We are in total control. We have all the leverage. You do what we say or you're fucked" from big tech to Zelensky to law firms to Columbia + Harvard and then the rest of the world
And Whether it’s the market fighting back or law firms, fighting back or universities fighting back… He’s gotta double down and not show weakness or concede. He was wrong… It’s very tough game theory.
The other view… Is they try a few experiments mindful that it could create chaos… And going into midterms they stabilized with more predictability market so and they have total political control
2/ post election when all Trump bros were “golden age of America” with 80s topgun hulk hogan f-yeah amurica hype videos…
We bought deep out of the money puts
Because the consensus and stability were the consensus view and the scarce contrarian view was: insane volatility ahead
3/ those puts paid off (pa) and now nearly 100% consensus is lower growth or recession AND inflation….SO….
China’s playbook isn’t war in the open—it’s war in the seams.
They target the gaps between state & federal, public & private, markets & security.
America must 'armor up' 🧵...
2/ The CCP’s strategy?
Hollow out U.S. strength from within.
Critical infrastructure? Infiltrated.
Universities? Compromised.
State pension funds? Financing China’s military tech.
3/ While America focused on the War on Terror, China waged a war on us—a silent siege of intellectual property theft, capital capture, and digital espionage.
If you were fly on wall in Qatar's strategy meetings you’d hear their not so secret strategy
i) keep up economic relations w/Iran (esp w shared gas reserves)
ii) support Islamist groups (esp Muslim Brotherhood) + use the masses as pawns for political leverage..
2/
iii) assert distinct identity in MidEast geopolitics as a ‘mediator’
iv) religious mafia style––foment fervent believers (funding Al Jazeera propoganda + mosques/ Imams to rule over other country populations) grow geopolitical power depsite tiny size (and no real military)
3/ The ties to Iran + Turkey in particular who leverage terrorism, religious extremism are the greatest threat to Mideast regional peace
especially with moderate + modernizing + peace + prosperity seeking UAE + Saudi (on cusp on Israel normalzied relations) and Sunni…
2/ this technical paper from Apple published year ago not widely discussed was the breadcrumb clue and the inspiration I have shared with many friends since....
3/ The paper introduces 2 methods called “windowing” + “row-column bundling” which allow devices to run models up to 2x DRAM size by storing model parameters in flash + loading them into DRAM as needed.