Fireside Tapes
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Archives of the best historical business, technology, and investing conversations & firesides | @firesidealpha
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In 2007, a rival fund called Ken Griffin on a Sunday needing to dump a $30 billion book before Monday's open to meet margin calls. The senior banker on the competing bid went to bed. Citadel owned all of it by 6AM. This is him telling the whole story -- the 50-person team assembled in hours, the all-nighter, and the banker on the competing bid who called from Greenwich to say he was going to bed: "And he said, look, it's getting late, this isn't gonna get done tonight. I'm heading off to bed, I'm telling my guys to go home, and we'll pick this up in the morning." "And I said, there will be nothing to pick up in the morning. We're going to get this done. he sort of laughed and hung up." "6AM before the opening of the markets, we bought that entire portfolio." The quote he lands it on, from President Lincoln: "Things may come to those who wait, but only those things left by those who hustle." Bookmark & watch ↓
Fireside Tapes2,699,813 Aufrufe • vor 9 Tagen
Jensen Huang founded Nvidia on the wrong graphics technology, and when no one knew the right way, he bought three textbooks from Fry's for a couple hundred dollars to rebuild the algorithm. Nvidia is worth more than $4 trillion today. This is him at Y Combinator on the day he realized Nvidia was building the wrong thing: Nvidia had chosen the wrong graphics approach, finished dead last, and run out of money. Then came the worse discovery. "Not only did we choose the wrong technology, we didn't know how to do it the right way." He said it to the whole company out loud, because the alternative was pretending it wasn't true. "We won't have a company if we don't confront the fact that this doesn't work and start working towards the right algorithm." There was no research budget and no expert to call, so he went and found the answer himself. "I had a couple hundred dollars in my pocket. And so I went down to Fry's and I bought three textbooks. And the textbooks were about OpenGL and how to design OpenGL pipelines. I brought it back to the company and gave it to the engineers." The engineers rebuilt the whole thing from those pages, and it became the foundation for everything Nvidia made after. "Everybody would have thought that Nvidia started out as world leaders in 3D graphics. And we learned it from a textbook." Decades later, he still tells it as a punchline against himself. "We actually started the company, raised money, and bought textbooks, when you think about it." Bookmark & watch ↓
Fireside Tapes1,900,855 Aufrufe • vor 12 Tagen
Peter Thiel lasted seven months and three days at a top New York law firm before walking out. A decade later he wrote Facebook's first outside check, $500,000 for just over 10% of the company. This is him on the door that was never locked: "I was sort of a hyper-tracked kid. In my 8th grade junior high school yearbook, my friends wrote in, I know you'll get into Stanford in four years. Went to Stanford four years later, end of high school, went to Stanford Law School, ended up at a big law firm in New York where from the outside everybody wanted to get in, on the inside everybody wanted to leave." "I left after seven months and three days. One of the people down the hall from me told me, it's really reassuring to see you leave Peter, I had no idea that it was possible to escape from Alcatraz. Which of course all you had to do was go out the front door and not come back." Nobody was holding them there. they had all just agreed the door was locked. "So much of people's identities got wrapped up in winning these competitions that they somehow lost sight of what was important, what was valuable." "Competition does make you better at whatever it is that you're competing on, because when you're competing you're comparing yourself with the people around you, you're figuring out how do I beat the people next to me." "And you will get better at that thing. But it often comes at this tremendous price, that you stopped asking some bigger questions about what's truly important and truly valuable." He closes the lecture on this. "Don't always go through the tiny little door that everyone's trying to rush through. Maybe go around the corner and go through the vast gate that no one's taking." Bookmark & watch ↓
Fireside Tapes190,412 Aufrufe • vor 6 Tagen
For years the smartest economists in America insisted that Warren Buffett and Charlie Munger were a statistical fluke, a one-in-a-billion accident. Then the loudest of them went to run money himself. This is Munger on how that argument actually ended: Their theory said nobody beats the market for long, that a long enough run of wins had to be luck. Berkshire kept winning anyway. So one of them, a man who had won a share of a Nobel Prize, called its record a two-sigma event, a fluke. Then a three-sigma event. Then four. "He finally got up to six sigmas. Better to add a sigma than change a theory, just because the evidence comes in differently." Rather than concede the theory was wrong, he kept making the record more impossible. Then he left the faculty and went to manage money against the very market he said no one could beat. "When this share of a Nobel Prize went into management himself, he sank like a stone." The theory kept its place in the textbooks. The man defending it didn't keep his in the market. Bookmark & listen/watch:
Fireside Tapes125,269 Aufrufe • vor 18 Tagen
Before Uber made him a billionaire, Travis Kalanick spent four years drawing no salary and living at his mother's house to keep a startup alive. He sold it for $19 million, cleared $3 million of his own, and to this day calls it the happiest day of his life. This is him on the company almost no one remembers, and why that one small win still outweighs everything he has built since. He started Red Swoosh in 2001, a file-sharing idea he describes as BitTorrent meets Akamai, before BitTorrent existed. By his own account it should never have survived. "That company wasn't meant to be and I willed it into being." For the first four years he paid himself nothing and moved back in with his mom. "The first 4 years, no salary. Lived at mom's." When Akamai finally bought it, the number that changed his life was not the kind that makes headlines today. "I sold it to Akamai for, like, I think it was like 19 million bucks. And probably to this day is still the happiest day of my life." He would go on to build Uber, worth a hundred times more. He still measures the best day of his life by the company that almost didn't make it. Bookmark & watch ↓
Fireside Tapes117,543 Aufrufe • vor 17 Tagen
Carl Icahn called Tim Cook and told him Apple was massively undervalued at 8x earnings, then pushed him to buy back $100 billion of stock. Apple is up more than 12x since. This is Icahn on the call he made when the rest of Wall Street had a great company priced like a dying one, and why he put everything behind it. Apple was throwing off cash and dominating its market, yet it traded at a multiple usually reserved for companies in decline. Icahn's read was that the market had it exactly backwards, and he wanted the company to use its enormous cash pile to buy its own stock while it was still cheap. "If they did a Dutch tender, I could say as much as $100 billion. I think this would really change the whole paradigm." He had not sent the letter cold. By his own account he called Cook first, and even the CEO agreed. "I called him and I told him this letter was coming. He thinks it's very undervalued." And he sized the position the way he had sized every conviction of his career. "As an old poker player, I put all my chips into this." The mutual funds that were too scared to own Apple eventually had to. It compounded for another decade, and the man who called it cheap at 8x earnings was proven right many times over. Bookmark & watch ↓
Fireside Tapes55,772 Aufrufe • vor 14 Tagen
Paul Singer put his team of 115 analysts to study Bank of America's books, and what came back stopped even him: $75 trillion in derivatives sitting on $150 billion of equity, with no way to tell what any of it was. This is Singer, who runs one of the most feared funds on Wall Street, explaining why the biggest banks are a black box that not even the people running them can read: Banks used to be simple, he says: whole loans, deposits, a regulator who understood them. That world is gone. The trading books buried inside these firms are now, by his count, the largest hedge funds on the planet, and nobody is really watching their risk. "It's impossible to tell what those assets are." The deep dive turned up $150 billion of equity, $2 trillion of assets, and then the number that ends the conversation. "75 trillion, that's with a T, trillion dollars notionals, long and short, of derivatives." He trades derivatives for a living, and he still could not draw the picture. "I challenge anybody in the room, outside of the room, come tell me what that looks like." Then he reminded the room this had already happened once. "What we found out in '08 is, from the standpoint of most of the insiders, they didn't understand what was on their own balance sheets." Bookmark & watch ↓
Fireside Tapes15,152 Aufrufe • vor 9 Tagen
Stanley Druckenmiller wanted to bet $3 to 4 billion against the Bank of England. Soros looked at the same trade and said that isn't enough: Bet the whole fund, then borrow to bet even more. The fund walked away with a reported $1 billion made in a single day. These are the two men who trained the current US Treasury Secretary in a documentary almost no one has watched. Druckenmiller walks through exactly how it unfolded, how the real risk was tiny, and why Soros would not stop pushing. "It's not whether you're right or wrong. you just have to have the max on when you're right." "That would have led me to do two, three, or four billion dollars; it was he who pushed very hard to take it further. We ran out of time." They shorted the pound until the Bank of England ran out of ways to defend it, Druckenmiller's own fund, Duquesne, would go on to run 30 years without a single losing year. This is the video where you see how he learned it. Bookmark & watch:
Fireside Tapes33,459 Aufrufe • vor 1 Monat
In 1985, Steve Jobs was forced out of Apple, the company he'd started in a garage a decade earlier. Seven years later, a student at MIT asked him how he felt about losing it. This is him answering, with none of the bitterness you'd expect. He said he'd thought about it a lot and would rather not dwell on it. Then he named the cost plainly. "I think everybody lost. I think I lost. You know, I wanted to spend my life there. I think Apple lost. I think customers lost." And almost in the same breath, he let it go. "And having said all that, so what? You go on. It's not as bad as a lot of things. It's not as bad as losing your arm." From there he talked, clear-eyed, about the company that pushed him out, the camps fighting over what Apple should become, the products he thought were slipping. And at the end of all of it, he landed somewhere quieter. "Who knows what would have happened, had all this not happened?" He asked that in 1992, running NeXT, five years before he'd walk back into Apple and build it into the most valuable company on earth. The version where none of it happened is the one story he never got to know. Bookmark & watch ↓
Fireside Tapes16,290 Aufrufe • vor 16 Tagen
In 1995, NVIDIA was days from vaporizing. Jensen Huang flew to Japan, told SEGA the chip he owed them did not work, and then asked them to hand him $5 million anyway. Today NVIDIA is worth more than $4 trillion. This is him telling Joe Rogan the whole story, the confession that saved the company: NVIDIA had chosen the wrong graphics technology and ended up dead last. It was out of money, and it owed SEGA a game console it now knew it could not build. So Jensen flew to Japan and sat down with SEGA's CEO. "I said, listen, I've got some bad news for you. First, the technology we promised you does not work. Second, we should not finish your contract, because we'd waste all your money and you'd have something that doesn't work. And third, even though I'm asking you to let me out of the contract, I still need the money. Because if you didn't give me the money, we'd vaporize overnight." He asked SEGA to turn the final $5 million into an investment instead. "He said, it's very likely your company will go out of business, even with my investment. And it was completely true. Back then, in 1995, $5 million was a lot of money." SEGA's Irimajiri thought about it for two days and said yes. When Jensen asked why, the answer was almost nothing at all. "What he decided was, Jensen was a young man he liked. That's it." That $5 million kept NVIDIA alive. "If he had kept that investment, I think it would be worth probably about a trillion dollars today." Bookmark & watch ↓
Fireside Tapes16,289 Aufrufe • vor 22 Tagen
Jamie Dimon was fired by his own mentor, then sank half his net worth, $60 million, into a broken Chicago bank almost no one had heard of. He turned it into JPMorgan, the most valuable bank in the world. This is Dimon on the firing that ended his career at the top and started it over from scratch, and the night he had to tell his kids: He had spent thirteen years with Sandy Weill building Citigroup into one of the biggest financial companies on earth, and was widely expected to run it. Instead, Weill fired him. That night, while he was hosting a hundred people in his apartment, he pulled his young daughters aside. "The youngest one says, Daddy, do we have to sleep on the streets? And the middle one was always obsessed with college. Can I still go to college? And the oldest one said, great, since you don't need it, can I have your cell phone?" Two years later a headhunter called about Bank One, a troubled $30 billion Chicago bank next to the $200 billion Citigroup he had just left. He took the job, and did something nobody had seen a new CEO do. He put $60 million, half his net worth, into its stock. "I was going to be the captain of the ship. I was going to go down with the ship. I made it clear to everyone I was here permanently." He fixed it. Four years later it merged into JPMorgan, and he has run that bank ever since, building it into the most powerful financial institution in America. Bookmark & watch ↓
Fireside Tapes14,987 Aufrufe • vor 23 Tagen
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