Thought for the day: There two basic models for valuation. One based on current financial metrics: PE, FCF, TEV/EBITDA, P/BV etc. The other model incorporates option theory which is a better model in times of distress. Think of the security as an option priced out of the cont How far is the security below the strike price and what is the duration of the option? For example a seemingly worthless equity rallies when the near term maturities are extended in a financing even when accompanied by a dilutive equity raise. Even at the fiscal level markets

My friend, Imma push back on the contention that the "economy is accelerating hard" This job is sometime like a game of 3 card monte where the dealer tries to trick you into thinking you see the card. The cpi and jobs number seems to have exaggerated economic strength due to

https://twitter.com/gavinsbaker/status/1626941269095206917

car sales from balmy weather and a some distortion in the January adjustments. We're seeing some other signs of slowdown--Ed Hyman's manufacturing surveys and some alt data on jobs. I say this all with caution and await some confirmation next week on the jobs front. Two things:

I tend to be more of a bottoms up analyst but 2023 should prove to be a year of a battle of two narratives. Rates and inflation on one hand versus GDP growth, margins and ultimately earnings on the other. Markets will be further determined by participant's outlook from current... company performance versus '24 and beyond. I don't think camping out in the last decade's darlings, with rosaries in hand, hoping for a comeback, will be the winning strategy. We have already seen the revenge of the value nerds. I think more to come.

@avichal Munger is a man of great wisdom whose commentary and writings are an indispensable part of the investing canon. One idea I think is essential to push back on is “invest in what you know”. This is a fundamental Mindset flaw and surprised this view is being ascribed

https://twitter.com/avichal/status/1388626762670559235

to Munger, a life long learner. Some of our best investments have been in areas I knew nothing about like Sovereign debt trades in Greece and Argentina, structured credit starting in ‘07 (short then long) and privates/VC. We don’t Ape into these things but

I’ve been doing a deep dive into crypto lately. It is a real test of being intellectually open to new and controversial ideas. Culturally I compare bridging the crypto world with the old as akin to finding a portal @chbetween two distinct worlds in the multiverse.

https://twitter.com/cdixon/status/1365733728304197634

@cdixon is a brilliant mind and I enjoyed this article as an art collector and investor.

I've been fascinated for years by "mindset" since reading Josh Waitzkin's Art of Learning which referred to Carol Dwek's book by that title. We all know about the importance of a "growth" mindset versus a "fixed" mindset in every aspect of life from parenting to investing. I saw this presentation from one of Dwek's students, Dr. @AliaCrum at Davos (I know!) in 2018 where she gave this talk. sparq.stanford.edu/sparq-health-d…