The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 4,765 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Dorsey: Fortune 500 CEOs Rise via Corporate Politics, Not Capital Allocation
“How does someone get to be the CEO of a Fortune 500 company or a Euro stocks 50 company? By demonstrating skill as a capital allocator all through their career? That's a giant pile of hooey. They do it by being a good self promoter, a good corporate politician…”
Dorsey: Discounted Cash Flow Models Undervalue Moat Businesses by Assuming Fading Returns
“The thing that a DCF is quite poor at, even though people think it's long-term oriented, is that mathematically a DCF assumes that the multiple fades.
It assumes that returns on capital fade to cost capital.
But if we're looking for Modi businesses and we're t…”
Private market allocations are not essential without consistent public outperformance
“We do discuss and say that privates are not essential. Meaning we should choose to have them because of the return we believe they will deliver over time. And that return needs to be in excess of what's offered in public markets.”
Jain: Asset managers must prioritize absolute returns over relative benchmarks
“Relative is fine in an up market, but over the long run, if you don't have absolute returns, nobody needs you. You don't pay bills with relative performance. In a bull market, everybody thinks a relative, but if you want a long-term survival, you need an absol…”
Jain: Position sizing should follow credit analyst logic, not equity conviction
“The sizing should be based on how a credit analyst would think. You can't have a very large position in monoline business, which operates a very narrow niche. Can't do it. So if you think about how does S&P would give AAA, it would never give AAA to an E&P com…”
Kim: PE IR hiring is broken, prioritizing external personas over actual skills
“The whole industry is upside down. People aren't looking for skills, they're looking for personas. If you have a great persona that actually fits, you'll get the job even though you have no experience.”
Three days of managed account transparency beats three years in a fund
“Derek and I have joked before, you learn more about a manager on three days on Dockside than three years if you invested in a fund. You understand what they do, what their portfolio looks like, how it evolves.”
Pensions mistakenly incentivized hedge funds to lower volatility and gather assets
“The average hedge fund out there, down the fairway hedge fund, us dumb pensions did the wrong thing by incentivizing them to run lower vol and take in more assets and collect that management fee.”
AI edge requires the willingness to discard tools after two weeks
“I think the more competitive it comes from not just building the tool, but being willing to throw out the tool two weeks later because of how fast technology is progressing. And I don't even say that facetiously because Sherpa, Everest, those tools, we're lite…”
Sloane: PE DPI Slump Creates Succession Logjams and Withholds Carry
“One of the effects of the DPI problem in the broader industry is not just on LPs. It's also on investors, right? And you think about VP, principal, MD, even partner level investors who've been at firms for a while and haven't seen their carry paid out. There a…”
Stutman: Low-empathy leaders can build relational closeness through deep understanding
“They've learned to create relational closeness without empathy. They've learned to create it without being warm and fuzzy and giving people a lot of couch time. What they've done is they've invest deeply in those people and understanding them.”
Lending against ARR without equity upside is venture lending without warrants
“You're doing venture lending without warrants.”
Private credit returns depend entirely on fund-level leverage to attract investors
“One of the issues with private credit is all the returns are predicated at leverage at the fund level. You need fund level leverage to get anyone excited about it. If anyone came out with a unlevered BDC, it would be a yawn, especially after fees.”
Grantham: Asset managers get fired in bull markets, not bear markets
“People think you get fired for underperforming in bear markets, which is nonsense. In a serious bear market, the client becomes catatonic.”
Grantham: Big asset managers cannot commercially survive fighting major bull markets
“If you're a big company, you can't fight a major bull market. It's ridiculous. It's terrible business. You have to roll with the punch.”
Grantham: Navigating major bubbles is all that matters in long-term investing
“The only things that matter in life in investing are the founding, forming, and breaking of the great bubbles. That determines everything. If you can sidestep half of the pain, that will make all the difference in the world.”
Grantham: Super-Bubbles End When Speculative Market Leaders Dramatically Underperform
“I developed a singular rule that only has occurred four times in U.S. History. The stocks that have been leading the charge up 70% in 1928, the meme stocks in twenty-twenty, up huge amounts. When they start to underperform dramatically, the market, as the bull…”
Grantham: Private equity and venture capital winners tend to stay winners
“Brilliant private equity and venture capital, and they are so much stickier than general money management. They don't turn over as fast in private equity and venture capital. The winners tend to stay winners.”
Baker: Evaluated analysts on clear factual arguments, not hit rate
“I didn't care whether the analysts at Fidelity got their stocks right or wrong. It was utterly immaterial to how I evaluated analysts. There's an analyst, he consistently had some of the worst stock picking metrics in the department. But I made a vast amount o…”
Baker: Investors must choose to panic early or double down late
“As an investor, you have to either panic early or double down late, and you have to be one of the two. It's hard to be both.”
Baker: Process-driven alpha in fundamental investing is quickly competed away
“By the way, you have to have a process, and you have to have the process that works for you, but any process that's repeatable that generates significant alpha, it's a very competitive world. It's going to quickly be armed away. In fundamental investing, any p…”
Top fund returns are driven by just two to ten key people
“I would just submit that any investment organization, no matter how big, there's somewhere between two and 10 people, and if you took those people out, and the organization had the exact same process, the results would be very different.”
Baker: Portfolio turnover is driven by volatility, not time horizon
“Turnover should be a function of how often you change your mind, and part of that in any discipline valuation-based process should be about how the stocks move. For me, turnover is mostly a function of volatility.”
Baker: Public companies targeted by short sellers should never publicly respond
“This is what you do the first time you get a short seller, write a report about you. Do not respond. I know it feels so personal. I know how personal it is, but just don't respond. Let the numbers do the talking. If you get in a public fight with them, it's ju…”
Jain: Alpha is privatizing as multi-strategy firms favor employee capital
“The biggest trend in our business is the privatization of alpha. Where the alpha is residing on the prop shops, as well as the multi-strategy firms, the multi-strategy firms over time have more and more employee money. And less and less available to investors.…”
Jain: Next-Gen Portfolio Managers Seek Compensation Autonomy, Not Operational Isolation
“The view of a PM in this industry is, they want autonomy. Especially the people in the next generation don't necessarily want autonomy. They want autonomy of compensation, but they don't necessarily want autonomy of lifestyle. So they want to say, if I make mo…”
Jain: Building a Multi-Strategy Fund Sequentially Creates Severe Infrastructure Problems
“The whole system wants you to create sequentially. They say, Bobby, why don't you start in one area? Start a billion and a half dollar fundamental equities business or quant equities. When that works, go do the next thing. Normal. The problem is now you starte…”
Gilmore: Total portfolio approach captures hybrid investments that SAA buckets miss
“If you're sitting there with a strategic asset allocation, and you've got all these asset classes, it could be that you've got a hybrid, where does it sit? Or there could be something that's new, and you don't have a bucket for it. It's hard to do. With the to…”
Lewinsohn: Software concentration is the biggest threat to direct lending portfolios
“The biggest threat is industry concentration in software going to impact portfolios in a way that wasn't expected when they were under it.”
Emerging market deal flow cannot support single-country mono-asset funds
“The deal flow in emerging markets Will not support mono asset class, single country, sub-regional funds, and therefore the people who raise that money end up deploying it badly.”
Monoline mid-sized emerging market managers will inevitably go out of business
“If you are a monoline
Mid-sized emerging market manager, public or private.
It is not a question of, are you going out of business?
It's a question of, when are you going out of business?
Because of the question you asked, the cycles. Unpredictable and violent…”
Kleinman: Asset management growth is constrained by origination, not capital
“The whole industry thinks in terms of capital formation. I just got to raise more capital and I'll deploy it. We flipped that on its head and said, no, the limiter of our growth is not capital. We've never had a situation where we've had good ideas and haven't…”
Kleinman: Private equity cannot scale like credit due to concentrated dealmaking
“There's only so much you can deploy in private equity. When you are making six or eight consequential decisions a year, there's only so much capital you can deploy on that basis. In the credit business, instead of buying a hundred million of this particular bo…”
Seides: Sovereign and Private Wealth Capital Exclusively Benefits Mega-Funds
“The private wealth channel is a whole different distribution mechanism. What those two things have in common is they benefit the largest firms. They don't benefit the middle market player. So the middle market, you have contraction, and then you have expansion…”
Seides: Venture Capital Has Structurally Shifted Toward Remaining Private Forever
“The one interesting aspect of venture, structurally, is to the extent private equity is private for longer, venture feels like it's private forever.”
Presenters Reliant on Slide Decks Should Stay Home and Practice
“If you need a deck, you're not telling a story. You shouldn't even be walking in the room if you need a deck. Stay home and practice. Turn it into a performance.”
Wolfe: Oligopolistic M&A bidding wars generate better returns than IPOs
“Our best outcomes, as an aside, have always been an oligopolistic industry structure where there's three or four players who are going to irrationally compete to own the asset because they want it and they don't want their competitor to get it leads to the bes…”
Lyon: Direct lending growth is driven by asset managers chasing fee-related earnings
“Now what you're seeing is those businesses are attached to a lot of very large alternative asset managers, many of whom trade on FRE. A good way to create FRE is to take several billion dollars of loans and charge one percent on them. That's what you're seeing…”
Lyon: Enforcing contractual liquidity rights on overpriced structured equity fails
“The worst thing possible to do is, well, I think this is overpriced. It makes no sense, but I have a one-five. That's a good way to lose money, because you're going to be misaligned from the get-go, and enforcing liquidity rights that you have in documentation…”
Lyon: Only four structural terms actually matter in credit and hybrid documentation
“There are four things that matter. The ability to put debt on top of you, the ability to take assets away, the ability to take money out of the system, the economic terms of your agreement.”
Ripley: Emerging PE managers average higher returns than mid and large cap
“I was surprised as I looked at the industry data to see that in many cases, there was much wider dispersion at that earlier phase of a manager's life cycle, that fund one, fund two type era, but it was dispersion in both ways. The average was better than mid c…”
Ripley: Strong pre-fund returns do not predict Fund I success
“We found over time that simply having strong returns pre-fund is not a good prerequisite for a fund one. It's about the intangibles we learn about you that support them.”
Ripley: Tech alumni-focused emerging VC funds have a three-fund shelf life
“The issue and the trick for the folks in our seat is it's got a three-fund shelf life. By the time you finish fund three, everybody you know at Airbnb is left. By fund four, you're talking to strangers.”
Ripley: 1-to-1 co-invest offers to emerging managers merely seek 50% fee cuts
“We back a lot of these emerging managers. I can tell you they are inundated with offers from folks who are saying, I'll give you a hundred million for your fund one, and I want one to one co-invest. What those folks are really saying is I want half off the rac…”
Startups that quietly lay off 50% of their staff are going to zero
“If a company just fired 50% of its people quietly, it's going to zero.”
Ayer: Long-Termism Is Sometimes a Lazy Crutch for Asset Managers
“Oftentimes playing the long game is the right strategy, the market's myopic, stick to your knitting, but there are occasions where long-termism is a lazy crutch.”
Ayer: Wall Street Sector Specialists Fall Into Echo Chambers Blinding Them
“In this market, it's been fun because we are viscerally exploiting or have been the specialist trap, where if you're an industry Wall Street specialist, you've looked at the same industry for 15 years, you're in an echo chamber talking about Peer analysts, man…”
Morfit: The three fundamental ways to win in equity investing
“There's only three ways to win equity investing. One is you have better information or faster information and computer programs and fiber optic cables that you tunnel through railway Lines and stuff, and we don't do that. The second way is you understand the w…”