The hottest Investment Strategies Substack posts right now

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Quant Letter: January 2025, Week-1

The Parlour • 12 implied HN points • 01 Jan 25
💰 Finance Quantitative finance Portfolio Management Market Analysis Investment Strategies
  1. AI is being used in finance to help with investment decisions, but it might make the gap between experts and novices bigger.
  2. New research is exploring better ways to model financial risks and predict market movements using advanced tools, like machine learning.
  3. Legislative events can influence stock market performance, as seen when Congress is in session, which may lead to declines in equity values.

Financial Contract-for-Differences

GEM Energy Analytics • 319 implied HN points • 08 Nov 23
💰 Finance Renewable Energy Investment Strategies
  1. The EU is making Contract-for-Differences the main way to support new renewable and nuclear energy projects. This will help create stable financial conditions for these investments.
  2. A traditional CfD can remove market price incentives for energy producers, leading them to produce electricity regardless of demand. This is not ideal because it can flood the market and reduce overall value.
  3. The new idea of a financial CfD separates payments from actual production, giving producers a goal to increase the value of their electricity instead of just maximizing how much they produce. This could lead to better management of resources.

The Importance (and Shortcomings) of a Data-Driven Approach in Venture Capital

patternventures • 198 implied HN points • 16 Feb 24
💼 Business Venture Capital Investment Strategies Data Analysis Market Trends
  1. Venture capital is a great field for using data because it can really improve the investment process. By analyzing data, investors can more easily find and support promising startups.
  2. Some key performance indicators (KPIs) have been shown to correlate with the success of funds. For example, funds scoring above 30% on specific KPIs are much more likely to provide high returns.
  3. While data-driven strategies are helpful, they aren't perfect. Investors still need solid experience and networks to truly understand fund performance and secure access to the best opportunities.

Spotlight: Michael Mealling - General Partner @ Starbridge Venture Capital

Space Ambition • 79 implied HN points • 03 May 24
💼 Business Venture Capital Investment Strategies Space Technology Startup Ecosystem Market Analysis
  1. The key to successful investing in spacetech is understanding market structures and leveraging a strong network. This helps in identifying real opportunities amid hype.
  2. Using the Integrated Space Plan (ISP) aids in spotting gaps and potential growth areas in the industry. It's important to ensure there are actual customers for new technologies.
  3. When reaching out to potential investors, concise and clear pitches about the business model are crucial. It's more effective to focus on solving customer problems rather than just showcasing technology.

Spotlight: Jonathan Lacoste - General Partner @ Space.VC

Space Ambition • 179 implied HN points • 26 Jan 24
💼 Business Venture Capital Startups Investment Strategies Technology Innovation Space Industry
  1. Investing in space tech has huge potential. It's becoming a key part of important industries like defense, agriculture, and communication.
  2. When looking to invest early, focus on the founding team and the size of the customer market. Successful relationships can be built before a product even exists.
  3. Finding big problems to solve is better than starting with a tech idea. Look for large markets that could benefit from smart space applications.
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Data Update 1 for 2023: Setting the Table

Musings on Markets • 779 implied HN points • 07 Jan 23
💰 Finance Data Analysis Investment Strategies Corporate Finance Market Trends Valuation Techniques
  1. Having too much data can be overwhelming and lead to distractions. It's important to focus on the most relevant information when making decisions.
  2. Data should not be seen as the only answer; personal judgment and reasoning are essential in analysis. Relying solely on data can hinder good decision-making.
  3. Data can be biased and subjective, even though many think of it as purely objective. It's crucial to be mindful of how data is presented and used.

What I read in September 2023

Asian Century Stocks • 314 implied HN points • 04 Oct 23
💰 Finance Stock Analysis Market Trends Investment Strategies
  1. The author read 14 write-ups in September from sources like Value Investors Club and Substack.
  2. They believe JD.com and China Tower may be undervalued, while Ossia International and Ming Fai may have potential upside.
  3. There are concerns about Midea's exposure to the Chinese property market, but the company's strong market position and growth indicate potential resilience.

The Nvidia economy and the benefits of toilet paper.

Jon’s Newsletter • 119 implied HN points • 09 Mar 24
💰 Finance Stock Market Investment Strategies Economic Trends Market Analysis Business Models
  1. Nvidia is rising fast in the market and could soon be worth more than Apple. Experts believe its growth is different from the tech bubble of the past.
  2. During election years, the stock market often has ups and downs, but usually rallies in the second half. Historical trends show that certain sectors perform better depending on who wins the election.
  3. Investors should look for companies with strong 'moats' that protect them from risks. Essential products like toothpaste and toilet paper are always in demand, making companies like Procter & Gamble good choices.

Inflation Adjusted House Prices 1.4% Below 2022 Peak

CalculatedRisk Newsletter • 23 implied HN points • 04 Dec 24
💰 Finance Housing Market Economic Trends Commodities Real Estate Investment Strategies
  1. House prices adjusted for inflation are currently 1.4% lower than their peak in 2022. This means that while prices have gone up, they haven't reached their highest point when you factor in inflation.
  2. In nominal terms, house prices are at all-time highs, but the real value shows a different picture. This is important because it reflects the actual purchasing power of money over time.
  3. The price-to-rent ratio is 8.1% below its peak in 2022, suggesting that buying homes might be getting less attractive compared to renting in the current market.

Freddie Mac House Price Index Increased in October; Up 3.7% Year-over-year

CalculatedRisk Newsletter • 23 implied HN points • 02 Dec 24
💰 Finance Real Estate Market Trends Economic Indicators Data Analysis Investment Strategies
  1. The Freddie Mac House Price Index went up 3.7% compared to last year, showing a steady increase in home prices.
  2. Florida has many cities experiencing large price declines, with 18 out of the top 35 cities affected.
  3. If more houses are available for sale and sales remain low, we might see a slowdown in home price growth early next year.

Three Future States of the Early-Stage VC Ecosystem

Venture Reflections • 21 implied HN points • 03 Dec 24
💼 Business Venture Capital Market Dynamics Investment Strategies Fund management Startup Ecosystem
  1. The early-stage VC market might return to old ways, but it's unlikely because many multi-stage firms are now investing in seed rounds. This means the landscape is changing, and firms might not find comfort in going back to the past.
  2. There could be a split in how seed and multi-stage firms operate. Seed firms may focus on smaller exits around $1 billion, while multi-stage firms chase much larger exits over $5 billion. This will change how both types of firms approach investments and support their companies.
  3. Multi-stage firms might take over the seed investing space thanks to their resources and strong networks. If they attract the best startups, smaller seed-focused firms may struggle to compete, which could reshape the future of venture capital.

Quant Letter: November 2024, Week-4

The Parlour • 21 implied HN points • 27 Nov 24
💰 Finance Quantitative Machine Learning Investment Strategies Portfolio Management
  1. Quanto options pricing can be improved using a mix of models that handle various aspects of finance and asset behavior. This could help in more accurate predictions and simulations.
  2. Hedge funds adapt their activist strategies to align with the preferences of major investors, leading to better results when trying to influence company decisions. This emphasizes the importance of understanding stakeholder interests.
  3. Simple machine learning models can sometimes outperform more complex ones when it comes to predicting financial markets. This shows that less can be more in data analysis.

Meta (Facebook) Lesson 1: Corporate Governance

Musings on Markets • 779 implied HN points • 07 Nov 22
💼 Business Corporate Governance Investment Strategies Market Analysis Tech industry Financial Performance
  1. Corporate governance focuses on how companies are run and who gets to make decisions. It's important because when management and shareholder interests do not align, it can result in poor decisions that harm the company.
  2. Facebook's stock has dropped significantly because of issues like the slowdown in online advertising and reputational damage. These challenges highlight the need for better governance to adapt to changing market conditions.
  3. Investors often give up their voting power when companies use dual-class shares, which can limit their ability to influence management. This trend can make it harder to make necessary changes when a company's leadership is not effective.

Cannibal Spirits

QTR’s Fringe Finance • 22 implied HN points • 27 Nov 24
💰 Finance Market Trends Investment Strategies Economic Policy Risk management Monetary Policy
  1. Markets can go both up and down, which is a natural part of freedom in trading. It's important to understand that fluctuations are normal.
  2. The term 'animal spirits' is often used to explain market behavior, but many believe it's overused and doesn't accurately describe what's really happening.
  3. There's a perception that the financial system is rigged, relying heavily on inflation and debt, which can create skepticism about the true state of the markets.

Understand Math Behind Secondary Sales, Measuring Startup Tractions, VC Daily Digest & More

Venture Curator • 239 implied HN points • 31 Jul 23
💼 Business Venture Capital Investment Strategies Entrepreneurship Financial Education
  1. Secondary sales involve shareholders selling shares to buyers, different from primary sales where new shares are issued.
  2. Understanding the math behind secondary sales helps grasp ownership changes and value fluctuations for founders and investors.
  3. Evaluation of startup traction can be challenging for VCs due to factors like new markets, inexperienced founders, and limited financial history.

What Will Last Long-Term: A Framework

DeFi Education • 1079 implied HN points • 21 May 22
🔮 Crypto Blockchain Market Trends Investment Strategies Decentralization
  1. It's tough to stay motivated when prices drop, but that's a common feeling in crypto. Giving up seems easy, but believing in the future is important.
  2. Many people doubt blockchain ideas, but there's real power in decentralized systems. It's a new way of doing things that requires patience.
  3. Instead of selling your investments in frustration, consider holding on for better times. Staying committed could pay off in the long run.

Sushi Part 2, Valuation and Consolidated Q&A

DeFi Education • 1418 implied HN points • 18 Aug 21
🔮 Crypto Decentralized Finance Blockchain Technology Market Analysis Investment Strategies
  1. Valuation of the protocol and its income are key topics discussed. Understanding how much a protocol is worth and how it generates money is important.
  2. The aggressive pressure from venture capitalists appears to be easing off. This change can affect the market price positively.
  3. The price of the asset has finally moved back into the teens after some fluctuation. Tracking these price movements can help investors make informed decisions.

Why Do VC Firms Want an Option Pool Before the VC Round? | Lessons from the Dot-Com Era for Generative AI Hype| How Startups Use VC Funds to Invest in Other Startups? | VC Remote Jobs and More

Venture Curator • 179 implied HN points • 15 Sep 23
💼 Business Venture Capital Startup funding Investment Strategies Tech Trends Remote work
  1. VC firms prefer having an option pool before the funding round to ensure proper allocation of shares and ownership percentages among founders, investors, and future employees.
  2. Lessons from the Dot-Com era suggest parallels with the current Generative AI hype, highlighting potential trends in commoditization, emergence of innovative disruptors, and advice for startups to focus on long-term goals.
  3. Startups often reinvest VC funds into other startups, showcasing a trend seen during peak market craziness, where companies like Stripe and Coinbase made significant investments.

People Have More Money Than Ever

Spilled Coffee • 32 implied HN points • 16 Oct 24
💰 Finance Personal Finance Consumer behavior Asset management Economic Trends Investment Strategies
  1. Many people have more money now than ever because wages have been rising faster than inflation for over a year. This means that they can buy more with their earnings.
  2. Homeowners are seeing their property values increase, while those looking to buy are facing more expensive housing costs. This shows the trade-off between rising asset values and affordability.
  3. Overall, both asset prices and wages are at all-time highs, which has led to a significant increase in net worth for Americans across all income levels, especially the bottom 50%.

Data Update 7 for 2023: Dividends, Buybacks and Cash flows

Musings on Markets • 359 implied HN points • 08 Mar 23
💰 Finance Corporate Finance Investment Strategies Cash Management Dividend Policy Market Trends
  1. Buybacks are becoming more common than dividends for companies to return cash to shareholders. Companies find buybacks more flexible and less of a commitment than regular dividend payments.
  2. Dividends should be one of the last steps in a company's financial decisions. If a company has no good investments, it should consider paying dividends or buybacks as a way to return cash to owners.
  3. There are tax differences between dividends and buybacks that may influence shareholder preferences. Although dividends used to be taxed more heavily, the gap has narrowed in recent years.

Elon's Twitter Play: Valuation Question or Political Rorschach Test?

Musings on Markets • 719 implied HN points • 21 Apr 22
🇺🇸 U.S. Politics Political Dynamics Corporate Governance Media influence Investment Strategies Public Perception
  1. Elon Musk's involvement with Twitter raises questions about the platform's current value and management. Some believe his takeover could bring needed changes, while others worry about his unpredictable nature.
  2. Twitter's business struggles are evident despite its vast user base and cultural impact. The platform has failed to convert engagement into significant revenue growth, leading to disappointing stock performance.
  3. Political beliefs heavily influence opinions on Musk's bid for Twitter. Supporters view it as a chance for free speech, while opponents worry about concentrated ownership and influence in media.

Does a hundred wrongs make one right?

inexactscience • 59 implied HN points • 04 Mar 24
💰 Finance Behavioral Economics Investment Strategies Risk Assessment Decision Theory
  1. A famous bet involving coin flips shows how people's risk preferences can be inconsistent. People might reject a single gamble but accept multiple repeats because they think it lowers their risk.
  2. The original advice about investing suggests buying stocks when young and bonds as you age. However, Samuelson's argument raises doubts about this common belief, challenging how we think about risk.
  3. The idea of loss aversion helps explain why people might choose to repeat risky bets. People tend to feel the pain of losing money more than the joy of gaining, which can lead to seemingly irrational decisions.

MercadoLibre, Inc Investment Thesis

The Wolf of Harcourt Street • 339 implied HN points • 24 Mar 23
💰 Finance Market Analysis Investment Strategies Financial Performance Business Analysis Risk Assessment
  1. MercadoLibre (MELI) is a Latin American e-commerce giant with remarkable growth, experiencing over 4,000% return in 16 years since its IPO.
  2. MELI's success is driven by a strong ecosystem of online commerce, digital payments, logistics, and advertising solutions.
  3. The company faces risks like regulatory changes, geopolitical instability, and increasing competition, but has growth opportunities in the unbanked market and logistics services.

Shen Jianguang on Five Major Misunderstandings of China’s Fiscal Stimulus Package

Pekingnology • 52 implied HN points • 15 Nov 24
💰 Finance Fiscal policy Debt Management Market Analysis Investment Strategies
  1. The fiscal stimulus package in China is larger than it seems. It includes various measures that could lead to significant economic support, potentially amounting to 20% of the GDP.
  2. Debt replacement efforts will not only improve local government finances but also allow for more government spending. This shift can help stimulate the economy by boosting aggregate demand.
  3. The package aims to help local governments, which can indirectly benefit businesses and households too. Increased spending can stimulate consumption and support recovery in multiple sectors.

Thoughts on the contract-for-differences (CfD)

GEM Energy Analytics • 179 implied HN points • 31 May 23
💰 Finance Energy markets Investment Strategies Renewable Energy Risk management Policy Analysis
  1. A contract-for-difference (CfD) helps energy producers by giving them a stable price. This way, they won't lose money if market prices drop.
  2. CfDs can reduce the risk of high profits during energy crises, aiming to keep electricity prices lower for consumers. They're designed to share some of the financial risks between producers and the government.
  3. The success of CfDs depends on accurately predicting future energy prices, which is really hard. If prices drop too low, it could hurt new energy projects and make it tougher for power producers to plan.

Raising DeFi's Standards: Where We Need to go if We Want Institutions to Buy Our Bags

DeFi Education • 699 implied HN points • 01 Feb 22
🔮 Crypto Decentralized Finance Blockchain Technology Investment Strategies Financial Regulations Market Trends
  1. DeFi needs to improve its standards to attract institutional investors. Nobody wants to invest in low-quality or risky projects.
  2. Investors should be more careful with where they put their money. Supporting better projects could lead to a healthier market.
  3. The crypto space should focus on creating long-term value rather than quick gains. This will benefit everyone in the long run.

Disinflation vs Deflation Explained

Concepts of Finance 🧠 • 159 implied HN points • 01 Aug 23
💰 Finance Economic Policy Inflation Deflation Interest Rates Investment Strategies
  1. Disinflation means prices are still going up, but not as fast as before. It's a slowdown in inflation, which can be seen as a good sign for the economy.
  2. Deflation is when prices actually fall, which can seem good for prices but often leads to negative effects like less spending and economic slowdown.
  3. A balanced approach is crucial. Some inflation is often healthy for the economy because it encourages people to spend and invest, avoiding the risks linked to both disinflation and deflation.

Volatility "Can Be Beneficial": Trading The Election Results

QTR’s Fringe Finance • 14 implied HN points • 09 Nov 24
💰 Finance Trading Market Analysis Investment Strategies Economic Trends Volatility
  1. Volatility in the market can actually provide good trading opportunities. When things are uncertain, smart traders can find chances to profit.
  2. Listening to expert traders can be really helpful, especially those who are honest about their successes and failures. It helps build trust and understand the market better.
  3. Election results often change market dynamics, creating unique situations for investors. Keeping track of these changes can be essential for making informed decisions.

The Curious Case of NASDAQ:ARM's Low Float

Irrational Analysis • 79 implied HN points • 20 Dec 23
💼 Business Finance Technology Market Analysis Investment Strategies
  1. Masayoshi Son's involvement in ARM (LTD) through SoftBank and Vision Funds sheds light on the company's strategic financial structures.
  2. The low free-float of NASDAQ:ARM due to the private transaction between SoftBank and Vision Fund 1 raises concerns about the IPO valuation and the overall stock price.
  3. ARM's position in the embedded/IoT market faces challenges due to RISC-V competition and customers' trend towards vertical integration, posing a threat to ARM's dominance in this market.

Depreciation explained

Concepts of Finance 🧠 • 219 implied HN points • 30 Mar 23
💰 Finance Personal Finance Financial Education Investment Strategies Asset management
  1. Depreciation is when things lose their value over time, like cars and electronics. This impacts how much you could sell them for later.
  2. For businesses, depreciation helps account for the decrease in value of their assets, matching costs with how much money those assets help make over time.
  3. Knowing how quickly something depreciates can guide your buying decisions. Some items, like luxury goods, hold their value better than others.

What is an ETF?

Concepts of Finance 🧠 • 179 implied HN points • 18 May 23
💰 Finance Investments Markets ETFs Mutual Funds Investment Strategies
  1. An ETF is a collection of different investments that you can buy as one package. This lets you invest in many assets like stocks and bonds without picking each one separately.
  2. ETFs are traded throughout the day like stocks, while mutual funds are only traded at the end of the day. This makes ETFs more flexible for buying and selling.
  3. ETFs usually have lower costs than mutual funds because they are passively managed. They also show their holdings daily, making it easier to know what you're investing in.

The Solo GP Journey & Navigating Hype Cycles - Sunil Nagaraj on the Venture Unlocked podcast

Ubiquitous Thoughts • 98 implied HN points • 12 Jul 23
💼 Business Venture Capital Startup Investing Entrepreneurship Tech startups Investment Strategies
  1. Sunil Nagaraj shares his unique career journey and entrepreneurial experiences
  2. Insights on the 'Solo GP' model of venture capital and lessons learned from pitching LPs
  3. Focus on investments in deeptech startups and the importance of authenticity in career endeavors

Net worth: what is it and how to calculate it

Concepts of Finance 🧠 • 199 implied HN points • 09 Mar 23
💰 Finance Personal Finance Wealth Management Financial planning Investment Strategies
  1. Net worth is the total value of what you own minus what you owe. It's like seeing how much money you have if you sold everything and paid off your bills.
  2. Calculating your net worth helps you understand your financial situation. It can show if you're actually doing well or if debt is holding you back.
  3. Regularly checking your net worth can help you track your financial progress. You want it to grow over time as you save and earn more money.

Walk Your Talk

do clouds feel vertigo? • 1 HN point • 31 Aug 24
💰 Finance Market Analysis Economic Trends Investment Strategies Behavioral Finance Risk management
  1. Navigating emotions in finance is tough. Just like a story, the market has ups and downs, often driven by fear and greed.
  2. Understanding market patterns can help you make better choices. Key events, like earnings reports, can change how stocks perform quickly.
  3. It's smart to think about who benefits from market movements. Often, the loudest voices can mislead you, so keep a clear perspective.

Top questions ahead of Eagle Alpha's Unbound New York Conference

The Data Score • 39 implied HN points • 05 Jun 23
💼 Business Data-driven Decision Making Data Monetization Compliance Investment Strategies
  1. Data monetization involves creating revenue streams by refining and selling accumulated data.
  2. Large Language Models (LLMs) are advanced AI models trained on vast amounts of text data for generating human-like responses in various applications.
  3. Alpha generation in finance refers to outperforming the market or generating excess returns in an investment strategy.

Russia in Ukraine: Let Loose the Dogs of War!

Musings on Markets • 179 implied HN points • 19 Mar 22
💰 Finance Market Analysis Investment Strategies Economic Impact Risk Assessment
  1. The Russia-Ukraine conflict has caused a lot of instability in financial markets, affecting bond and equity prices. Many investors are worried about defaults and have pulled back from investing.
  2. Commodity prices, especially oil and gas, have surged due to the ongoing conflict, further impacting inflation expectations. This rise in prices can strain economies globally.
  3. Consumer confidence has dropped significantly, with people feeling more uncertain about the economy. If consumers spend less, it could lead to slower economic growth in the US and Europe.

Clouded Judgement 12.27.24 - 2024 Year End Review

Clouded Judgement • 8 implied HN points • 27 Dec 24
💰 Finance Market Trends Investment Strategies Financial Analysis Economic Indicators
  1. In 2024, the median multiple for cloud software stocks was 6.1x, showing stability throughout the year. This means that software companies were valued similarly at the beginning and end of the year.
  2. Only a few companies had impressive growth, with just 3 companies increasing over 100% in stock price. Most companies had mild performance, with half going up and half going down.
  3. Key companies like Cloudflare, CrowdStrike, and Datadog consistently ranked in the top ten for valuation multiples. This shows their strong market position over the past few years.

It Only Takes One Data Point to Disprove an Investment Thesis

The Data Score • 19 implied HN points • 09 Jan 24
💰 Finance Financial Markets Data Analysis Investment Strategies
  1. It only takes one data point to disprove an investment thesis by testing for the counterfactual, which allows identifying data points that go against the thesis.
  2. A question-driven approach to investing focuses on formulating the right questions to deeply understand the investment landscape, prioritizing curiosity and critical thinking.
  3. Designing an investment thesis involves setting measurable outcomes, defining timeframes, identifying dependencies, establishing checkpoints, and being aware of the current valuation. It's crucial to recognize what's in the valuation already and how your views differ.

Clouded Judgement 10.25.24 - Misaligned Incentives

Clouded Judgement • 13 implied HN points • 25 Oct 24
💼 Business Venture Capital Startups Investment Strategies Financial Markets Economic Trends
  1. Venture capitalists are changing how they work with founders. Instead of focusing on big wins together, some are now just trying to make quick money from management fees.
  2. Founders should be careful about raising too much money too early. Getting larger sums from investors can often come with higher valuations, which can hurt the business long-term.
  3. It's important for founders to know how many other companies their investors are supporting. If an investor has too many companies, they might not have enough time to help yours succeed.