To The Moon

Just popping in on my writing break to share a 1 lot… 🎙️Stripe’s John Collison Recently Interviewed The Late Charlie Munger (Invest Like The Best) Loved the rapid fire format. RIP Charlie, a true legend. I’m hesitant to put my favorite excerpts because it’s no substitute for listening to it, but I’m going to anyway to make it easier to quote from in the future. Excerpts Did you learn the big ideas in the various disciplines because you were just intellectually curious about them? Or because you thought they’d be instrumentally useful in the work? Both. I saw instantly, for instance, when I was introduced to the math of Pascal and the eleme

Just popping in to share my notes on 2 books. The links go to my notes. More Than A Numbers Game: A Brief History of Accounting by Thomas King Advanced Portfolio Management by Giuseppe A. Paleologo I picked up these books because of an interest in the practice of “measuring correctly”. Context always governs what “correct” means. A quote by Paleologo the opens Chapter 8: Understand your performance The Earth rotates around the Sun at a speed of 67,000mph. When I go out for my occasional run, my own speed is in the tens of thousands of miles per hour Should I take credit for this amazing performance? I w

In year 5 of this online writing adventure, I will continue my annual tradition of shutting down for the holidays. I get to recharge that particular battery and readers who complain that they are behind can catch up if they so care. This post is an organized recap with a few “user notes”. Personal Favorites The Worst Game Ever Made: This was a journey down the rabbit hole of Georgism which I basically think is the platonic ideal of capitalism. California’s eventual future, with its disparity between haves and have-nots, is a Central American country with drug-lords digital addiction merchants’ compounds surrounded by beggars. It is also glaring to me that it is the epitome of anti-Georgism with a tax code th

Find the audio here. When I was 22, I thought I hit the jackpot with my job. After bonus season, management took the entire firm to Las Vegas. It’s still a weekend that looms large in my memory, not only because I got sun poisoning but also due to the sheer over-the-topness of it all. There was one moment when I was sitting in the basement of Drai’s at a table with the older traders and one of their friends — the friend was Vin Diesel. I mean, this was Vin pre-Fast and Furious, but still, I had never been to Las Vegas before, and my first impression was pretty overwhelming. It was also peak. What I didn’t understand was that all of this was a one-time dividend. I’m going to talk about what I didn’t understa

Episode link: https://www.thealphamindpodcast.com/117-susquehannas-todd-simkin-great-traders-are-made-not-born/ About the episode: In this episode, we had the privilege of sitting down with Todd Simkin, currently the CEO of SIG’s Reinsurance business and a veteran at Susquehanna since 1997. Todd has played pivotal roles within the company, from being a trader to overseeing the day-to-day operations and even spearheading firm-wide education and trader development programmes. Todd is possibly one of the pre-eminent minds in the world of trading, possessing a deep understanding of what contributes to the making of great traders. We were honored that he was willing to converse with u

Idio I just started reading Advanced Portfolio Management by Giuseppe Paleologo. About the author He’s on garden leave after running risk at Hudson River Trading. He has also held senior positions at Millennium, Citadel, Axioma, and IBM Research. He was formerly a mathematical researcher at Stanford and an instructor in the master’s program in Financial Engineering at Cornell University. I started reading this book because I was interested in how fundamental investors think about risk and performance attribution. I heard the book was standard issue at Citadel for pod PMs. I haven’t verified that but I did notice th

The moontowermoney.com project is an approachable framework for personal investing. It competes for air with my other projects and my own scatter-brain. One might say its progress is, um, gradual. Anyway I’ve added 2 new posts recently so the Introduction and Nature of Investing units are now complete. 2 more units to go. See https://moontowermoney.com/

Arithmetic returns Expected return for a bet is the simple probability-weighted average of outcomes. If there is a 50% chance of a bet making 21% and a 50% chance of it returning 19% this it’s a good bet that is also not volatile. You expect to make 20% on average (despite the fact that you can’t ever make that on any single bet since you can only earn 19% or 21%). Your expected terminal wealth after a single trial is 1.2x what you started with. Since we took a simple average of the outcomes we computed an arithmetic mean return of 20% Compounded returns For multi-period investing where we do not take any distributions or “money off the table” we cannot use simple arithmetic means to compute an expected return. Consider the same bet after 2 trials. These are the 4 pos

For the past 3 years, the Berkeley Chess School has done a weekly lesson in our backyard. About 15 kids attend. They are mostly 2nd and 5th graders because we know the families through our kids. I walk home from school with all the kids on chess day. I usually throw out a math question or riddle and by now the kids just ask for them on our strolls. Lately, the questions deal with rates, percentages/fractions, exponents/roots, or some basic number play stuff (“How do you know if a number is divisible by 9?”) Some examples: Start with $100. If you earn 10% then lose 10%, how much money do you have? What’s larger 3⁴ or 4³and similar questions? If you travel 5 miles in 12 minutes, how fast are you going?[I haven’

(From the 10/29/2023 edition of the Moontower letter) I’m using this space to invite you to play PitBulls (formerly StockSlam) online this coming Friday evening. It’s totally free but space is limited. Reserve your spot (choose Friday November 3rd if you want to play with me) Click here to run through a tutorial. < — the app improves daily; you can now practice on your own against bots! Host your own game for free This is my testimonial for t