Insight
Baker: Investors must urgently focus on data outside probability distributions
“Investing is a Bayesian endeavor. You have a Bayesian probability space of expected outcomes. The data points should fit within that. And then if there's a data point outside that, that's what you have to super focus. If a data points inside your expected prob…”
Disclosure
Gavin Baker: Contrarian style relies on buying 52-week low lists
“For me, I'm a double down late person. I'm always buying stocks on the fifty-two-week low list. It makes me uncomfortable when a name is in the consensus. Sometimes consensus is right, but it's important to me to be contrarian.”
Insight
Gavin Baker: Fundamental alpha requires out-of-consensus estimates and correctness
“The alpha in the market as a fundamental investor comes from having earnings estimates or free cash flow estimates or whatever metric you choose that are materially different from consensus and being right.”
Insight
Baker: Framing investment ideas as falsifiable hypotheses limits confirmation bias
“Instead of having an investment thesis, we have an investment hypothesis, thesis being a literal statement of belief, and if you state a belief, as a human, you become attached to it, whereas a hypothesis is quantitatively falsifiable, and you're attempting to…”
Insight
Baker: Managing basis risk is essential when running high gross exposure
“If you're going to run a high gross, the most essential thing that you have to manage is basis risk.”
Disclosure
Baker: Atreides requires trusted founders or board VCs for large private bets
“I don't like to invest in a company and make it a big position unless it's either a repeat founder who I've had a long duration relationship with, or there is a VC who I have a close personal and professional relationship with, Who has a really good track reco…”
Assertion Contradicted
Baker: Google JAX and Meta PyTorch teams fought publicly on X until leaders called truce
“The JAX team at Google got into a giant fight with the PyTorch team on Meta on X, and the heads of each company's respective AI division had to make a public truce and instruct their troops to stop fighting.”
Insight
Baker: A high-IQ social following sharpens investment ideas and drives venture deal flow
“Our friend Patrick O'Shaughnessy has said having a big
High IQ following is actually a superpower, and it really is. So I think for sharpening your ideas, it's incredible. Then there's a whole nother dynamic. It really matters for deal flow.”
Insight
Baker: Fantasy football and investing both require non-consensus differential opinions
“Fantasy football and investing, they're fundamentally the exact same thing. You have to have a differential opinion. If you just draft everybody where their ADV is, you're never gonna win.”
Insight
Baker: Investment success requires a philosophy matching your emotional makeup
“A lot of being successful as an investor is finding an investments philosophy. That fits your own emotional makeup such that you can be rational when you are wrong.”
Disclosure
Baker: Fidelity invested privately in Facebook in 2010
“I reengaged with venture right around the time Allen and company started bringing growth stage equity opportunities to big mutual fund managers, which is so important to own Facebook privately in 2010.”
Disclosure
Baker: Cut WeWork allocation in half when valuation was pushed
“I did invest in WeWork. They pushed the price, and I did cut my order in half. Never did anymore, to the best of my memory, but it's not like it was all roses or successes.”
Disclosure
Baker: Atreides manages fund positions via dynamic pilot and co-pilot roles
“Every position in the fund, I think of it as like an airplane. You can pick any moving vehicle. On some positions, I'm the pilot. On other positions, I'm the co-pilot. Some positions, I'm in the plane, and maybe the pilot or the co-pilot are people who I've wo…”
Disclosure
Baker: Atreides measures annual gap between insight quality and portfolio performance
“For me, execution is the gap between our performance and the performance we could have had based on the quality of our insights. I make an effort to measure that every year.”
Assertion Contradicted
Baker: Anthropic researchers report substantial hiring driven by candidate posts on X and Substack
“Anthropic researchers have said a lot of our hiring comes from what people say on X. And what they might write in a substack.”
Assertion Not checkable as stated
Baker: Most big asset managers change compensation every 3 to 5 years
“Probably most big asset management firm changes the way they pay people every three to five years.”
Gavin Baker