This is going to be the biggest misallocation of capital in history. Take the dot com bubble, merge it with the 2008 housing crisis, and that is roughly what we are looking at. You have a commodity deflating at record speed while the debt built up to produce it explodes at record speed. What could possibly go wrong? Normally the market fixes this by itself. Prices fall, management gets nervous, budgets get cut. But that wiring is CUT right now. Prices never fell far enough to scare anybody, and Washington is running a deficit near 7% of GDP that papers over the damage. So prices stopped carrying information. Now they carry a story instead. I call it NARRATIVE DOMINANCE. Reality is beside the point. What matters is what you can get people to BELIEVE while there is enough money sloshing around to keep everyone comfortable. One market still tells the truth: Last month the Treasury doubled its buybacks and Wall Street read it as support. I said short bonds instead. Today the 10 year went through 5% for the first time since 2007. Defend a price the fundamentals do not justify and the market comes for you every time. Eventually somebody cuts a capex budget, and that day the story dies. I do not see how this ends any other way. Do you?

For a decade, @a16z's MO was to funnel huge amounts of capital into scalable software companies to fund fragile growth and produce spurious markups. They now pretend they've always known that doesn't work, talking about coordination issues and overheads linked to raising too much. Then they claim it actually does work with AI because you can keep throwing money at compute and it will just magically build great products. This is such transparent nonsense. The coordinated misrepresentation of the venture market from this firm is beginning to feel desperate. The core claim: "Right now, clearly the power law is more extreme than it has been in the last 10 to 20 years of technology investing." - @DavidGeorge83 What this read misses is that the winners may be larger, but they've also absorbed much more capital. "Power law" describes the long right tail of extreme outcomes. Essentially, how the vast majority of VC investments return <1x, while some return >100x or even >1000x. Across a portfolio the math works. So, has the power law become more or less extreme as venture capital has been increasingly dominated by giant fee-printing machines like @a16z? On a dollar-weighted basis, the power law has probably flattened significantly as large outcomes have absorbed so much more capital — compressing the resulting multiples. We can, for example, split the markets into all venture-backed companies versus a pool of companies that raised a Series D round or beyond. The logic is pretty clear. If you drive more money into venture capital, you systematically reduce the quality of outlier returns; fewer companies lose money, at the cost of fewer large outcomes. Scaled venture platforms that are pumping capital into ever larger and later rounds have eroded the power law nature of venture capital.

“Culture is the sum of all the wanted behaviors we celebrate; minus the sum of the unwanted behaviors we tolerate” Danny Meyer at @EconClubNY

"Given the dramatic increase in the financialization of private capital markets and the pressure for entrepreneurs to generate quick financial returns [...] we see an increasing opportunity structure for criminal deception to prosper." Criminal Deception in Silicon Valley (2026) When the primary goal was exit was by IPO, VCs were incentivised to help founders build strong companies that would thrive in public markets. Now that the goal is to juice fee income, VCs are incentivised to push founders on metrics like ARR and thier ability to command attention. This has changed the nature of VC. Today, it doesn't matter if a founder's company blows up in a scandal; if they have proven their ability to raise capital at scale, they're likely to get another shot. Founders are compensated for this high-risk lifestyle with increasingly early access to secondary liquidity, at inflated prices, and a soft landing if they fail. VCs get paid their 2% and don't care either way. As a result, the rate of fraud and total failure amongst venture-backed companies has increased substantially. - The rate of fraud in startups that had raised $10M or more increased by 6.3x from 2003 to 2021. - Venture-backed companies are 54% more likely to face fraud charges within two years of IPO. - Hot market conditions are associated with an increase in the rate of future fraud by 19%. Meanwhile, the venture ecosystem is reorganising around whatever it's easiest to raise capital for, rather than funding mission-driven founders. The tacit agreement seems to be that founders do whatever it takes to produce markups, and get paid, while VCs look the other way. This is the modern definition of "founder friendly" being promoted by the behavior of scaled VC firms. This has enabled an entrepreneurial culture that cares little for truth, morality or long-term vision. Inheriting traits from their investors, founders are more likely to be zero-sum opportunists. Unfortunately for VCs, these founders are now starting to bite the hand that has fed them. References: Criminal Deception in Silicon Valley (2026) pubsonline.informs.org/doi/1… Venture Fraud (2026) nber.org/papers/w34868 Risk-Seeking Governance (2023) papers.ssrn.com/sol3/papers.… Board Dynamics Over the Startup Life Cycle (2020) nber.org/papers/w27769 Excessive Risk-Taking and Founder Friendly VCs (2021) papers.ssrn.com/sol3/papers.…

A cover story on a young Ken Griffin

His Long / Short factor mismatch is fascinating to me. To go 200%+ long A.I. (all one bet, basically (ie "concentration")) and short Software (literally the inverse factor of AI) is just bananas. IF YOU ARE GOING TO GROSS UP, you want your longs and shorts to be positively correlated, not inversely correlated. And you NEED DIVERSIFICATION. Otherwise it's not a hedge; it's just more of the same bet, which makes you even more levered than you think you are.

Don’t start a business unless it's the only option. To be an entrepreneur, you have to be unemployable. The idea of working for someone else? Impossible. Being told what to do makes you want to scream. You’ve wanted to shove every boss or authority figure in your life aside and grab the wheel. You’re overflowing with ideas on how to improve things. You're perpetually dissatisfied with everything. In short: you're just the right amount of broken. You don’t want to start a company. You need to. Why else would you endure the endless struggle and misery? The sleepless nights. Missed payrolls. Lawsuits. Betrayals. People misunderstanding you and thinking you’re crazy. Like Andy Dufresne, crawling through the tunnel of shit to reach freedom. You only do it because there’s no other way.

'The critical observation is that, for 25-odd years, the world’s largest companies have been insulated from competitive threats and have managed to record high returns on equity without precedence. Now, competitive forces are being released that have been absent for a very long time. The high valuation multiples partly reflect the relative absence of competition. As competition emerges, those multiples should trend lower in accordance with the more normal historical experience. How that will impact their stock market valuation remains to be seen. But if there is no cash flow remaining to buy back shares, or pay dividends, or expand the business in other areas than AI/data centers, there is a strong possibility that the $13 trillion valuation of these five companies will contract. Again, they represent almost 20% of the S&P 500 and NASDAQ 100. Whether the hyperscalers will be able to generate an adequate return on their enormous investment remains to be seen. What appears to be more certain is that they will continue to build an increasing number of data centers—and require ever-more electricity, water, and land. While these firms can be likened to the gold diggers in a gold rush, the companies we own are the resource providers for the necessary and limiting factors for their operation and growth—in terms of the requisite land, water, and power. In other words, as in La Fontaine’s fable of the ant and the grasshopper, we prefer to play the role of the ant.'