L/S Equity HF. Look on my Works, ye Mighty, and despair!
New York, USA
Joined October 2019
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Critics : H1B is full of low skilled workers abusing the lottery to immigrate and take jobs away from Americans in need
H1b workers : 280k tc, 2mn nw
Critics: 🤬
Sounds like envy is at the core of everything. Hell hath no fury like the downwardly mobile. Git guy bro.
DragonflyValue retweeted
Exercise the "I own my life" muscle a lot; this muscle needs to be exercised every single day as much as possible down to the finest minutiae
This is a thought process you need to continually reaffirm in every small moment God gives you to affirm; CONSTANTLY
You need to own your life and your kingdom and your decisions and your own structure, otherwise you are at the mercy of everything else around you with no weapons to combat the world with
No matter what happens it is your fault to fix it and the more you avoid this fact the harder your life is going to be in the short term, there's a great quote I have had in my mind for a very long time and I say it to myself probably once a day "The road to heaven feels like hell and the road to hell feels like heaven" and it is so true in matters of the soul
Even when you're moderately hands off lets say in your life your routines your awareness, your decisions, you would think in the moment the weight of responsibility is lighter on you but its really not because your destiny is still being shaped just now you're primarily unconscious of the journey but the journey is still ongoing
Responsibility and truth is hard at the start and glorious at the end whereas the short term perspectives of life are the opposite they're easy in the moment but they crush and destroy your capabilities and optionality as you as a person and a man progress which is of course negative
Slowly but surely the repetition of making yourself this person also takes over and you get to a point where having immense amounts of energy, focus, discipline and an attack orientated never switching off mindset is the baseline once you get addicted to the results you internally feel like what you're progressing on and building, is deeply in your favour but you can never get to this position unless you recognise there is no such thing as a small decision
Expressing yourself at this point comes first from the ultimately accountable decision that you are maximally responsible for everything in your life and you also have to be willing to pay the price and incur the emotional pain of that decision because if this position is truly embodied it pulls you into further action and thinking which is going to continually expand your problem palette but there is no other way forwards than this and by facing the ugly truth of how it actually looks in action
ATTACK
teapawt.org/AvantPrince_/status/20…
By far the most brutal Occams Razor of wealth is central nervous system stability, this is one of those honest signals that cannot be faked, impossible across time. There is immense power in becoming LIGHTER as you become more capable. Less tension in the face, less desperation in the voice, less attachment to individual outcomes, more fluidity between environments, more calmness when plans change, more charm when circumstances become difficult. Smile easily. Move slowly. Listen deeply. Make people laugh. Let silence breathe. Do not turn every disagreement into war or every ambition into visible strain. The highest competence eventually begins to look like ease because the machinery underneath it has become so sophisticated and battle tested through reps. Heavy men make every room feel like work. The rare spiritual outlier man carries enormous responsibility while somehow making life around him feel more beautiful. This is the king touch or the midas touch with full contextual flow, the fact this account is free is generational. Calm nervous system, light touch, smooth voice, simple smile, flow heavy movement light
teapawt.org/AvantPrince_/status/20…
DragonflyValue retweeted
can't believe it took me decades to realize "feelings" are better described as tuples `(sensation, location)` rather than emotion words - chrislakin.blog/feelings
DragonflyValue retweeted
I think the small, concentrated, high-conviction fund thesis is increasingly hard to square with what has actually happened in the industry. LP dollars have been moving toward passive, systematic, market-neutral and multi-manager structures while traditional LO/Tiger/mid-net L/S has steadily lost share. More importantly, the success of the pod model has already shown that fundamental investing is not some intractible problem. You can break the process into forecasts, exposures, risk budgets, sizing rules while reducing many of the behavioral and portfolio construction problems inherent to the traditional Tiger model. Acadian's work (acadian-asset.com/investment…) supports these same findings: concentrated portfolios have not produced consistent alpha, while more systematic processes can scale through greater breadth. If quarterly fundamental alpha can be industrialized this way, I don't see why longer-horizon fundamental alpha should remain permanently exempt, particularly when prop firms are spending billions on compute, data, domain-specific transformer architectures while continuing to push their forecast horizons outward.
The chart below makes the concentrated portfolio argument even harder because the market has become materially more factor driven through most of recent history. A 10-20 name portfolio can therefore very easily amount to a few large latent factor bets with idiosyncratic noise layered on top. This is also where I think the idea that the answer is a smaller fund with more conviction starts to break down. If the data show that concentrated fundamental portfolios are not producing durable excess returns in an increasingly factor-driven environment, then the natural advantage shifts toward firms capable of extracting many smaller signals, controlling their common exposures and combining them systematically rather than relying on a PM's ability to identify 15 exceptional stocks.
I also strongly disagree that fixing this is as trivial as onboarding Arcana and building an automated factor hedging layer. The software interface may be easy; building a risk system that is actually useful in production is not. Off-the-shelf models have materially underpredicted realized volatility in 2026, which pushes you into needing custom factors and covariance estimation and the much harder question of whether the factor structure you are using in your off the shelf model is even correct. Axioma itself distinguishes estimation error from specification error and shows how basic choices around estimation window, frequency, weighting, outliers and autocorrelation materially change the resulting exposures.
Then you still need to turn those forecasts and risk estimates into positions. Portfolio optimization is a separate technical discipline involving constraints, turnover, estimation error, transaction costs and the interaction between all of them. None of that is trivial, particularly inside concentrated fundamental funds where many PMs remain skeptical of factor models in the first place.
The capacity problem compounds this. Passive and pod capital are heavily concentrated in liquid large caps, so the obvious place for a small fundamental fund to look for less competed longer-horizon alpha is further down the capitalization and liquidity spectrum. But a 10-20 stock portfolio deploying meaningful capital into small/mid/micro caps is going to move price against itself both entering and exiting positions. At that point market impact and optimal execution are part of the alpha model rather than implementation details because they determine how much of the forecast survives into realized PnL. MOSEK treats transaction costs, market impact and portfolio constraints as explicit parts of the portfolio optimization problem for exactly this reason. So the concentrated fundamental shop ultimately ends up needing custom risk models, portfolio optimization, impact modeling and execution research anyway. Which are precisely the capabilities where the large prop firms have spent years building an industrial advantage, which is why I think the more likely endpoint is that they continue moving outward in horizon and subsume more of the longer-horizon fundamental alpha rather than leaving it permanently protected for small discretionary funds.
Just my take though, would be interested in @TheStalwart @tracyalloway @__paleologo to opine as well
I have been of the view that the exact opposite will happen.
@pmje73 recently tweeted a view that he believes concentration will tick back up, and I couldn’t agree more.
Experienced fundamental investors will know the degree to which your tier 2 and tier 3 ideas act as a tax on your best 10-15 best ideas. How good is your 67th idea? Generally pretty crappy. Yet the idio-based risk models have demanded breadth for risk management purposes, so many stock pickers have been forced to play that game. I lived this personally going from a seat where I ran 6x12 (and consistently generated double-digit spread) to seats where I had to run 30x70 to make the risk model happy (and could never figure out how to scale research depth needed to have alpha in my 67th best idea).
Strip out a talented stock picker and just have them focus on one thing: give me your 15 best ideas. I can’t logic through how that approach to portfolio construction doesn’t get meaningfully more compelling given the evolution of tool set and current state of equity markets:
1) the ability to build scaled research systems distilling then tracking the 15 best ideas from 8,000 stocks has been transformed with AI…a single stock picker / PM can truly now have close to institutional-grade research intelligence, which was never the case before
2) historical periods of index concentration have been compelling starting points for bottom’s up stock picking / and with more asset classes facing high valuations and low forward return prospects, the ability to find 15 great equity ideas that can CAGR 15%+ for 15 years is a more compelling value proposition to LPs on a relative basis. There are 26.6 quatturodecillion (!) 15 stock portfolios I could construct from 8,000 underlying global equities, and, definitionally, roughly half of those will outperform a broad global index. AI can’t and won’t change this fundamental reality of dispersion (will probably make overshoots and factor/thematic violence worse, a benefit to the longer duration investor). People will do this in regional banks, Nordic small caps and thousands of other approaches that aren’t necessarily owning AI winners. There’s always a bull market somewhere.
3) Agree with @0xFaust12 point on risk systems, but the friction to onboard a tool like Arcana and build an automated AI factor hedging system is now fairly trivial and with relatively little effort can take that 15 stock portfolio that probably looks like a giant factor bet into a tapered idio-primary portfolio. The bottleneck is more awareness than technology.
There are lots of reasons there hasn’t been this explosion of talented stock pickers starting $100-$350m 15 stock concentrated long biased funds (coming from a guy who thought about building one in 2018, i can list all the reasons in detail). Specifically, many of the most talented stock pickers have had a durable bid from the multi-complex with compelling guarantee terms.
To me, what the Jane Streets (and many others) will be able to do is to start industrialize the broad alpha of the discretionary multi-manager. The same way that quant firms compressed alpha signal in alternative data, quant firms will compress alpha signal currently harvested by swarms of pod teams. Except for the fact that the large multi-managers are run by the sharpest, most adaptive people in our economy, to me the “peak pod” argument becomes more real over the next 3-10 years. And, multi-teams will be able to do with 8 investors what they historically did with 12. What do the 4 who attrit do?
@chamath had this idea a few years back where he gave small portfolios to single analysts/PMs. It was a super intriguing idea but the time and tooling wasn’t ripe. I think it’s ripe now.
Probably some centralization makes sense (build the AI and data pipelines centrally), whether it’s sponsored by a quant firm with a buy-side or by an LP directly. Absorb the displaced multi-manager talent and just ask them for 15 best ideas
DragonflyValue retweeted
Shopify billionaire co-founder & CEO Tobi Lütke — one of the most analytically rigorous founders alive — uses affirmations.
His exact words:
"If you tell yourself or write down something about yourself 100 times, it writes into the neurofrontal cortex at such a deep level that your brain will start reconciling you to that. It just works."
His personal example:
He was terrified of public speaking.
For one week he sat down every day for 10 minutes and wrote: "I love public speaking."
A week later the fear was gone.
"It's not like a placebo. You just actively change your neurofrontal cortex in this moment."
Your brain starts shaping your behavior around the identity you rehearse most.
DragonflyValue retweeted
Tom Brady reveals the brutally honest talk he had with a Michigan sports psychologist that turned him from a benchwarmer into the GOAT.
Brady's transformation started with one change: the way he thought.
"I sit on the bench my first year, and I really had—I would call it—a lot of self-defeating attitudes and behaviors. I always had an excuse. 'Coach doesn't want me in there.'"
"I had a sports psychologist. His name was Greg Harden. I would go into his office every Tuesday, and he would say, 'Tom, I like you. You work hard, but you have a shitty attitude.'"
"'How about you start worrying about what you can control and stop talking about the other quarterbacks, stop talking about the coaches not putting you in.'"
"If they give you three reps, you do the best with the three you get. Quit bitching about you only getting three or you going in there with the backup receivers. No one cares.'"
"'You treat practice like it's a game. If you throw a touchdown in the two-minute in practice, you celebrate like it's the game.'"
Brady never approached it that way before. Then "sure enough" everything changed.
"Mmy energy started getting way better. I was bringing juice; I had the right attitude."
"Then all of a sudden, I'm bringing the juice, man. Every day, boom."
"That [mindshift] really helped me get better."
The road to 7 Super Bowl rings didn't start on the practice field; it started in that very office…
DragonflyValue retweeted
I've said this before but it bears repeating
One of the easiest mistake to make in investing is seeing price action that doesn't make sense and immediately assuming that it'll resolve immediately
Unless you can point to the mechanism and how it goes away - assume it won't make sense going forward
DragonflyValue retweeted
typical chem co segments:
Advanced Materials: a highly cyclical commodity chemical
Performance Products: also a cyclical commodity chemical, but China has 2000% excess capacity of this one
Specialty Solutions: best way to model this segment’s margins is short natural gas + a negative shock for an inexplicable shutdown that’s never guided to & happens whenever something good is going on in the rest of the business
Precision Compounds: this repackages stuff from the other segments & sells it, allowing them to play with internal pricing to show steady margins so value investors can fool themselves into a sum-of-the-parts story once or twice every cycle
Engineered Applications: this is actually kind of a good business, but it’s 1% of EBITDA & they’ll sell it to PE for 6x in a couple quarters
DragonflyValue retweeted
on a more serious note if you're not at least up 20% ytd i think you should seriously reconsider your investment strategy because these are the best conditions for markets in a long time and in times like this you don't chill, you hammer it home and work extra hard
All the SAAS bros talking about how "cheap" everything is should learn from @blondesnmoney about how to make money in a truly unloved sector
DragonflyValue retweeted
i recently had a friend who’s going thru a hard time ask how i got out of the suicidal pit of despair i was in not so long ago. my flippant answer is that i got a husband and baby and this friend should do the same. my longer answer is something like:
spending time a bunch of time focusing on yourself is a trap. you feel bad so you think you need to look inward and work on self care or whatever so you can suss out the bad feeling and fix it, but actually much of the problem is the self-focus itself.
get a project that actually matters and that’s way bigger than yourself and focus on that instead. kids are the ultimate version of this, but not the only option. you will by necessity grow, and you’ll do it a whole lot faster than you would by naval gazing in the vacuum of a therapist’s office or yoga retreat or whatever.
people weren’t meant to have endless leisure time. drinking your coffee in peace is only enjoyable if it’s in contrast to doing something hard during the bulk of your day. you don’t need more special *you* time, you need way less of it.
This is the great pain and relief of fatherhood: You're no longer the main character of your life.
Kids dredge you like a river. You think you can't give any more, and then they need something more, so you dig deep and find it in yourself to give it to them. This happens more times than anyone could possibly count. Over time, the amount of love you're capable of channeling becomes unfathomable.
One of the hardest parts of being a parent is giving up aspects of yourself that you simply don't have the time and resources to elaborate the way you'd like. Parts of yourself that previously existed outside of family life can get a little attention here and there, to balance your sanity, but never again to take center stage. That was the bargain when you had a family. You trade satisfying personal fulfillment for infinite meaning.
Outside of extraordinary circumstances, a human life simply isn't large enough for both of these things. The great religious and spiritual traditions are clear about this. I hope Justin finds the balance he needs to be the father his kids need. That's the calculus now, and to fail at achieving that will be far worse - for him and then - than any stultifying afternoon of stacking Legos or playing catch.
DragonflyValue retweeted
My friend told me he and his wife live paycheck to paycheck.
I don't believe it because they both are high earners in tech, and he even works for Google. But after doing a little bit of math, I found out he didn't lie.
• Mortgage: $17,000/month for a $3M home
• Property Tax: $3,000/month
• Private School: $3,000/month for 1 kid
• Travel: $2,000/month (assuming $20k/year)
• Utilities: $1,000/month
• Groceries: $2,000/month
• Eating Out: $1,000/month
• 2 cars: $1,000/month
So in total $30k per month, not including other misc costs like house maintenance, paying for Netflix, etc.
W-2 employees usually take home only 50% of their salary, so they have to make $60k per month pretax, which is $720k in annual TC.
What's the point of living a life like this?
DragonflyValue retweeted
In your 20s, you're going to get the urge to buy oil and gas stocks because they trade at double-digit free cashflow yields compared to tech stocks at low-single-digits at best.
IT'S VERY IMPORTANT YOU DON'T DO THIS.
DragonflyValue retweeted
What is amazing here is what Wang Huning is clearly coming from a Third World society. This is, mind you, 1988. He is trying to give an objective account, but it's clear that for him all these technologies, at this scale, were almost sci-fi.
China used to be very poor.
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DragonflyValue retweeted
This is not CGI
This is an actual Humanoid robot.
I covered these guys before and the advancements are insane.
Readers added context they thought people might want to know
This video is 100% CG and the company EngineAI has admitted as much: humanoidsdaily.com/feed/engineai-…
DragonflyValue retweeted
People pleasing is, at its core, a need to control others in order to reduce anxiety.
Many people struggle to end up on a balanced point on the spectrum that is people pleasing vs. nonchalance - often jockeying between the two when they do not have grounded self-esteem and sufficient differentiation of self.
