Hedge funds are tools that seek out flaws in others' world models through trades. The focus has shifted towards differentiating risk and return characteristics within asset classes, such as bonds being sensitive to recession or interest rate risks. Performance differences are attributed to factors like industry membership, statistical evaluation of stock prices, and market conditions, helping to analyze an investing track record for elements like stock selection, market periods, and industry performance.
Patrick McKenzie (patio11) is joined by Byrne Hobart to discuss Byrne’s vantage point as writer of The Diff, a tech and finance newsletter. Byrne explains the toxicity of the 30-year mortgage, the dynamics of the finance newsletter ecosystem, how rationalist epistemics can be applied to hedge funds, and the joy of learning about an industry from scratch.
–
Full transcript here: https://www.complexsystemspodcast.com/episodes/writing-history-byrne-hobart/
–
Sponsor: This podcast is sponsored by Check, the leading payroll infrastructure provider and pioneer of embedded payroll. Check makes it easy for any SaaS platform to build a payroll business, and already powers 60+ popular platforms. Head to checkhq.com/complex and tell them patio11 sent you.
–
Links:
Referenced:
–
Twitter:
@patio11
@byrnehobart
–
Timestamps:
(00:00) Intro
(00:25) The 30-year mortgage is an intrinsically toxic product
(04:46) Young households are the socially optimal holders of equities risk
(10:19) The structure of private equity returns
(14:18) Sponsor: Check
(15:32) Meta-analysis of the finance newsletter space
(19:54) Byrne’s aspirations for The Diff
(25:01) The origins of names
(27:19) The epistemics of a hedge fund
(34:26) Venture capital vs hedge funds
(38:13) Understanding scrapers
(41:20) How to learn about an industry from scratch
(45:37) The business of online travel agencies
(49:21) Wrap
–
Complex Systems is part of the Turpentine podcast network.