Friends,
A fantastic excerpt from the Founder’s episode on The Essays of Warren Buffet:
Buffet:
Some part of your business philosophy is not going to be financial and that's the way it should be
A determination to have and to hold involves a mixture of personal and financial considerations. To some, our stand might seem highly eccentric. Charlie and I have long followed David Ogilvy's advice, develop your eccentricities while you're young. That way, when you get old, people won't think that you're gaga.
Certainly, our posture must seem odd to many in that arena, both companies and stocks are seen only as raw material for trades. Our attitude, however, fits our personalities and the way we want to live our lives. Winston Churchill once said, "You shape your houses and then they shape you”. We know the manner in which we wish to be shaped.
[With respect to arbitrage and paying attention to the active market…Buffet is not interested in that.]
"This is not how Charlie nor I wish to spend our lives. What is the sense in getting rich just to stare at a ticker tape all day? (If you don't like staring at a ticker tape all day. Some people probably like doing that of course)
Founder’s host David Senra adds:
Figure out how you want to spend your life; and two, find out how to get rich doing that.
It's usually not what you do, it's how you do it. Look at almost any profession — you have realtors that make no money, and you have realtors that make millions. You have podcasters that make no money, you have podcasters that make millions. You have investors that don't make any money and investors that make a ton. It's not what you do, it's how you do it. So to me, it's like, no, let's figure how to do both.
Let's figure out, how do I want to spend my life? (that's actually the hard question) and then from there, once you're focused on that, how can I get rich at doing that?
I thought those bits went well with the softer themes I’ve been writing about this year regarding how to think about what to do, how to express your talents, and generally paddle in the same direction as your abilities.
And if you’re in the thick of it, this post holds a truth we can easily forget when hit a dip:
Easy to Expect. Hard to Predict (7 min read)
Scantron
The David Guetta story in here is a great demonstration of the post’s premise — life rewards repetition.
Money Angle
I’ve written about TIPs a few times:
What I Learned About TIPs (detailed)
Inflation Replicator (This post talks about TIPs vs a portfolio of oil and bonds)
This past month, Victor Haghani penned a post that clears up common misunderstandings. I’ve addressed several of them in my posts but I think he does a better job in a few spots, especially considering how short the post is. One thing that confirms what I already was doing — don’t hold them in a taxable account.
The title is also perfect because it strikes to the heart of the most common misunderstanding.
TIPS Do Offer Valuable Inflation Protection – But You Need to Decide What You’re Protecting (5 min read)
Money Angle For Masochists
Options twitter came alive this week since GME gapped higher on Monday after Roaring Kitty revealed on Sunday night that he owned 12mm shares of GME via options plus an additional 5mm shares.
I used some print data to reconstruct the implied vols he paid (source here).
On Thursday the calls were $40 ITM…then GME announced a 75mm share offering causing the stock to gap down on Friday’s open before settling in around $9 ITM. His average price on the calls was about $5.55, paying on average 208% vol for the calls.
The options expire June 21.
If you want to follow along, grab the popcorn and go to Twitter because that’s the closest place to matching the tempo of the stock. Twitter during live events like sports is when it’s the most fun. GME is the financial equivalent of the Bills/Chiefs playoff game from a couple of years ago.
If you do go on Twitter, bring an umbrella. There appears to well-trafficked section of option twitter where I don’t follow anyone who even follows its furus. And I follow a lot of accounts. I call it wario twitter. It looks like a shortcut to making yourself dumber.
Options are a vast world. There is so so much I don’t know despite probably forgetting more about options than most people will ever learn. This is a twitter list of people I’m mostly certain are or were professionals and know what they’re talking about. I find it useful, I hope you do too.
This account, @0xfdf is relatively new and putting out a lot of great posts. This one is especially thoughtful and the principles within it can extend to many careers.
A thread on how I interview and hire quants
In related news, Euan Sinclair is going to be publishing again at Hull Tactical. I signed up for email updates. Euan is in the sweet spot of practical and technical. (See my notes on his book Positional Options Trading)
From My Actual Life
My wife and I met on my birthday in July 2003. I’ve waited 21 years for this moment.
Stay Groovy
☮️
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