Hope all goes well… Our Santa Barbara team is safe and sound. Thanks for asking. Chase’s parents survived the mud slides, they were ground zero. Somehow their house didn’t collapse. Everything around it did. Their next-door neighbor and close family friend died. He woke his son in the middle of the night to escape but the house collapsed and they were swept away. Holding on to one another. The son awoke 3/4 of a mile

Hate crowds. Love fresh air. Long runs, sunshine, storms, horizons. Solitude. Altitude. So when we moved the firm from California’s mountains to Connecticut’s flats I promised to avoid tight spaces, low ceilings, rush hours. “How many people are here tonight?” I asked the maître d’, entering the private dining room. “Twenty-three at last count,” he answered to my horror. “Terrific, vodka tonic, three limes, keep ’em

Hope all goes well… “You know the best thing about Jackson jamming Charlie head-first into a snow pile?” asked Teddy, attempting to lighten conversation. The family dinner table shrugged, Charlie’s Chernobyl-red cheeks evaporated his dwindling tears. They’d been shoveling the driveway in the dark. Which is what happens when I come home to discover our kids spent the snow-day doing every conceivable thing other than t

To sell implied volatility at current 50yr lows, investors must imagine tomorrow will be virtually identical to today. They must imagine that bond yields won’t rise despite every major central bank eager to hike interest rates and exit QE. They must imagine that economies at or near full employment will not create inflation; that GDP will neither accelerate nor decelerate; that governments will tolerate historic leve

Hope all goes well… “Wow, I got real coal – what did I do wrong this year?” whispered one of my many younger brothers, looking around, laughing, kind of. Our four kiddies noticed but barely cared. A nephew giggled, the room chaotic. Mara and I had hosted yet another family holiday, our home bursting at the seams. And late Christmas Eve with fifteen empty stockings lined up on the hearth, Santa considered the na

Hope all goes well… Merry Christmas, Happy Hanukkah. To you and your families. Resurrected one of my favorite little memories, an opening note from Christmas past… Christmas Day 2013: “Santa slipped down the chimney. Left big boot prints in the ash that spilled across our hearth. And the jolly fella stuffed stockings. Built a train set too. Sprinkled magic everywhere. Moments before the kiddies emerged, sporting thei

Hope all goes well… Dusted off an anecdote about oxymorons, from September 2014, at the dawn of a volatility burst. See you again in January with full weekend notes. Week-in-Review (expressed in YoY terms): Mon: Bitcoin futures begin trading on CBOE, Saudi Arabia to allow cinemas for 1st time in 35yrs, Russia signs $21bln deal to supply Egypt with 5 gigawatt nuclear reactors, Putin announces Syrian pullout, Turkish Q

“What are the odds we come across an opportunity in the coming 4yrs to earn 20%?” the investor asked his team. “High,” they answered. “The odds are 100%,” he said, having seen this movie a few times. “So our cost of capital is 5% per year (20% divided by 4yrs), plus the 1% we earn on cash,” he said. His team nodded. “Under no circumstances should we deploy capital unless it earns well more than 6% per year from here

Hope all goes well… 11 tons of gold bullion. 173 Bugatti Chiron’s. 1,785 four-year Harvard degrees. 9,384 years of paper pushing for an average Saudi civil servant. 79,250 years of Egyptian labor. 90,000 years of Iraqi labor. 203,340 years of Yemeni labor. 281,250 years of slavish Pakistani labor. 450,000,000 US dollars. Mohammed bin Salman Al Saud considered these monetary equivalents, each identical in value to 2 s

“Let’s step into my office,” he said. So I did. He was my boss. “The firm’s most important client needs help.” I listened, uninterested, unconcerned about clients, their problems. Barely cared about my boss. I had a game to play, solo sport, and loved it to the exclusion of all else. “They need to do a very large trade.” A twenty-six-year-old proprietary trader’s mind is rather primitive. Which is good and bad. Being