All posts by tremendousblog

At The Sopranos Convention!

I’ve been an huge Sopranos fan for many years. I’ve seen every episode at least 5 times. So when I got the opportunity to attend Sopranoscon this Saturday in Atlantic City, NJ, I was so excited!

Me and Richie Aprile!

As I came to the head of a long line of Sopranos fans, many dressed as their favorite character, I entered a grand ballroom decorated for the “Feast of St. James.” Set up like the Italian church feasts that are all over New York and New Jersey this time of year, the feast was dedicated to James Gandolfini, who died too young but left us with so many memories.

Past the food vendors selling sausages, espresso and cannolis was a board of all the shows best quotes. My favorite:

“I’m sorry I stole your prosthesis. But it did bring me to the Lord.”

Janice Soprano

Giggling like a school girl, I rounded a corner and suddenly saw all my favorite Sopranos stars! It was incredible to see them suddenly appear, alive and moving and freed from screen. It was quite a lineup: Dominic Chianese (Uncle Junior), Lorraine Bracco (Jennifer Melfi), David Proval (Richie Aprile), Jerry Adler (Hesh), John Fiore (Gigi Cestone), and many more.

Uncle Jun!

And since this Sopranoscon doubled as Mobmoviecon, there were amazing actors from other gangster tales as well, like Paul Sorvino (Paulie in Goodfellas) and Giancarlo Esposito (the terrifying Gus Fring in Breaking Bad)!

Gigi!

I took a picture with David Proval, whose portrayal of Richie Aprile I found chilling and memorable. In reality, he is a nice, quiet man, nothing like the loud and dominating gangster he played. As we took a picture together, I told him how I loved his performance. It was wonderful to be able to thank him for all the happiness he brought me. He thanked me and I went on my way to…

Tony’s Escalade

Tony Soprano’s Escalade! Yes, the very same car Tony rode in for the last few seasons of the show. Not only did I see it, I even got to sit in Tony’s seat and take a picture!

This convention was a wonderful experience, and I have way more amazing things to tell you. See you soon!

More on The Sopranos and the mafia:

WELCOME TO SAL “BIG PUSSY” BONPENSIERO’S HOUSE FROM THE SOPRANOS

VISITING UNCLE JUNIOR’S HEADQUARTERS FROM THE SOPRANOS

THE MAFIA’S HOBOKEN FORTRESS

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Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

The Best Mexican Food Is In…New Jersey?

On a quiet side street in Union City, NJ is a small storefront. Inside: some of the best Mexican food in the country.

La Piedra del Sol is run by a lovely family from Oaxaca, Mexico, a region known for its cuisine. While we often think of California or Texas as the best places for Mexican food in America, I submit this may be the best Mexican north of the Rio Grande.

Chips and salsa are no afterthought here. Everything is housemade.

I first tried this wonderful restaurant on a frigid Valentine’s Day night. The shrimp fajitas oozed flavor. The guacamole was creamy and delicious. Simple chips and salsa were an incredible experience: multiple salsas with deep, rich flavors and crispy tortilla wedges, all housemade.

Guacamole served with flair!

Service is attentive and friendly. Everything is done in-house. As the end of our meal came, the owner sent out a delicious tres leches cake, free of charge. It was moist, milky, wonderful. This happened to be one of the last meals out my wife and I had before COVID, and it was memorable.

I visited again on a recent evening and the food was better than ever. I’m very grateful the shutdowns didn’t force this wonderful spot out of business.

La Piedra del Sol is open every day but Sunday and in addition to wallet friendly prices, it’s also BYOB. If you’re in the area, you’d be crazy not to visit.

Have a great weekend everyone!

More on food:

THE BEST BAKERY IN NYC (IT’S NOT LEVAIN)

I ATE THE BEST BURGER OF MY LIFE OUTSIDE IN THE DEAD OF WINTER

HOW I LEARNED TO COOK

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

Hedge Fund Losses Could Take Decades to Recover

Melvin Capital, among other hedge funds, has taken severe losses on bad bets in AMC, GameStop and others. They are now down by almost half:

Melvin Capital Management, which lost more than $6 billion in January, is now down 46% for the year through June, the fund recently told investors. Maplelane Capital is down 39% for the period.

Until Melvin recovers all of those losses, it will not earn any performance fees. This juicy 20% fee is what induces traders to set up hedge funds in the first place.

The average long/short equity hedge fund, the class Melvin belongs to, has returned just 3% annually over the last decade. At that rate, it would take Melvin 21 years to recoup its losses.

Here’s what could come next:

  • Manager Gabe Plotkin shuts the fund down, locking in investors’ losses. If he starts over with another fund, he can get performance fees right away.
  • Top traders leave the firm for other hedge funds that are earning performance fees, and hence can pay hefty bonuses. Only the B Team remains.
  • Melvin and similar funds make increasingly risky bets, desperate to quickly recover what they have lost, thereby losing even more. After all, 21 years is a long time to wait.

I think you will soon see more and more hedge funds either shutting down or getting desperate. If I were invested in any fund that saw big losses in meme stocks, I’d sell now before I lose it all.

More on AMC:

AMC SHORTS LOST $642 MILLION YESTERDAY

SHORT SELLERS LOSE $44 BILLION IN 30 DAYS

HEDGE FUNDS LOSE $12 BILLION ON AMC AND GAMESTOP

Photo: “Forever is Binding and Freeing” by Lomo-Cam is licensed under CC BY-NC-ND 2.0

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

AMC Shorts Lost $642 Million Yesterday

Short sellers in AMC Entertainment Holdings, Inc. got slaughtered yesterday:

Dusaniwsky, managing director at short-selling data provider S3 Partners, told Barron’s he estimates 75.8 million AMC shares are sold short, or roughly 15% of shares available for trading. There has been some covering, as he estimates shares shorted are down by about 4 million over the last week. But with the stock up $8.47 on Tuesday, short sellers were down $642 million in mark-to-market losses on Tuesday alone, bringing the year-to-date losses to $3.82 billion.

AMC surged upward as it consolidated two new theaters into its company and announced discussions with landlords to reopen closed locations.

Short sellers, largely hedge funds, have already lost nearly $4 billion betting against AMC. Their total losses in meme stocks exceed $12 billion.

The only way I can make sense of their stubborn behavior is this: that they’re desperate to recover what they’ve already lost. A gambler who has lost 90% of his life savings in poker may have to keep playing: how else can he 10x his money and get back to where he started? Conservative bets won’t do that.

The only difference is, the hedge funds are playing with someone else’s money.

More on AMC:

SHORT SELLERS LOSE $44 BILLION IN 30 DAYS

HEDGE FUNDS LOSE $12 BILLION ON AMC AND GAMESTOP

HEDGE FUNDS’ AMC DEATH SPIRAL

Photo: “the Great Hedge Fund Hei$t” by eyewashdesign: A. Golden is licensed under CC BY-NC-ND 2.0

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

How to Get Internet to Cuba

Amid deepening poverty, escalating COVID cases and a lack of vaccines, Cubans are doing something very brave: protesting against the Communist dictatorship in the largest demonstrations in six decades.

I can’t even imagine how afraid they must be, but they’re out there. And activists need to be able to coordinate with each other. The Cuban government knows this, so they’ve taken a cue from dictatorships in Iran, Myanmar and elsewhere: restricting the internet.

Cuba’s government has disrupted access to WhatsApp, Facebook, Instagram, Telegram and YouTube, per London-based watchdog NetBlocks. These disruptions have gone on for over a week so far and show no signs of ending.

As an American with a love of freedom and a background in tech, I thought I’d research some options for our Cuban friends:

  • Alternative social platforms: Twitter is not yet blocked, although it could be at any time. Less used video platforms like Vimeo or Dailymotion are also available.
  • Privacy tools: VPN’s continue to work, as does Signal, the encrypted messaging app used by Edward Snowden. This could be a superb WhatsApp alternative. Tor is a great option for browsing. It’s available for desktop or mobile in a convenient browser form. It routes data through many servers, making your traffic untraceable. Unlike most VPN’s, Signal and Tor are free. I use them myself.
  • Satellites: Not viable. These need ground infrastructure that Cuba doesn’t have and their government won’t allow.
  • Balloons: Much discussed and a great potential solution, but I fear the implementation will take too long to be of use to Cubans. These balloons exist today, cost in the tens of thousands (chump change to the US government), and float in international airspace. They could be positioned over international waters as well.

    Cuba would be taking an extreme step to shoot them down, if they could even accomplish it. And in any case, we could always launch many, many more.

If anyone knows of any good charities working on these issues, please leave a comment at the bottom of the page. I’d be happy to contribute to any good effort in this area.

Patria y vida, amigos!

More on tech:

CHINA IS CRUSHING ONE OF ITS MOST INNOVATIVE COMPANIES

INSIDE A STARTUP ACCELERATOR DEMO DAY

CHINA IS KILLING ITS TECH INDUSTRY

Photo: “Project Loon balloon” by douglas_coldwell is licensed under CC BY 2.0

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

The Best Bakery in NYC (It’s Not Levain)

One evening, my wife came home and presented a bunch of small, colorful bags. Inside: some of the most delicious baked goods I’ve ever had.

Their outstanding chocolate chip cookie. Don’t worry, I was gentle.

Eclair Bakery, founded by French pastry chef Stephane Pourrez, is on a side street near the United Nations. Despite eight years in the city, it’s fairly obscure, especially compared to famous spots like Levain. But I’ve never had a Levain cookie as delicious as those from Eclair. They’re moist, chewy, and deeply suffused with brown sugar and butter.

Their namesake eclairs are also the best I’ve ever had. A caramel version I tried had a light, airy pastry filled with rich, smooth caramel cream. It was beautiful to look at and even better to eat!

If you’re in New York City, I strongly suggest giving this under-the-radar spot a try!

More on the NYC area:

THE BEST NYC COMEDIANS YOU HAVEN’T SEEN (UNTIL NOW)

WHAT IT’S LIKE TO BE ON LAW & ORDER: SVU

I ATE THE BEST BURGER OF MY LIFE OUTSIDE IN THE DEAD OF WINTER

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

China Is Crushing One of Its Most Innovative Companies

Didi Chuxing, or “Honk Honk Taxi”, was one of the greatest success stories of Chinese tech. Founded in 2012, it broke out just months later by providing rides during a heavy Beijing snowstorm. A regular taxi was impossible to get, but Didi came through.

After that, the company was on the fast track. It raised over $23 billion in funding from major venture firms like Softbank and beat Uber to dominate the Chinese market. So when the time came to go public this summer, markets had every reason to cheer.

Just sixteen days later, things look a lot different. Here’s what Didi’s stock has done:

Investors are down 15% in just two weeks, a disappointing debut. Meanwhile, Didi’s offices are flooded with Chinese state security agents:

China sent regulators including state security and police officials to Didi Global Inc.’s ride-hailing business on Friday as part of a cybersecurity investigation, the latest development in a regulatory saga that has gripped China’s tech industry.

Regulators from government units including the Ministry of Public Security, the Ministry of State Security, the Cyberspace Administration of China, the Ministry of Transport and Ministry of Natural Resources will be stationed at Didi starting Friday for the investigation, the cyberspace administration said in an online statement.

Potential outcomes include financial penalties, suspensions of business licenses and criminal charges.

Imagine if, shortly after its IPO, FBI and CIA agents raided Uber headquarters. This is exactly what’s happening to Didi.

Didi may not have adequately disclosed the concerns the Chinese government had about its security practices. That, and substantial investor losses, set the stage for a tsunami of shareholder lawsuits. Indeed, a class action suit has already been filed against Didi.

I see Didi being increasingly distracted by heavy pressure from the authoritarian Chinese government along with cascading lawsuits in the US. Even if the company survives, they’re distracted and ripe for disruption.

There is no evidence Didi has actually done anything improper with user data. But the Chinese government doesn’t like any information passing outside its borders, and companies are required to make disclosures to IPO in the US, so Didi is now under fire from a powerful and dictatorial government.

Another company had its IPO on the same day as Didi: SentinelOne, a California-based cybersecurity startup. Here’s how they’ve done since:

Up 4% with no regulatory problems: a situation Didi can only dream of.

If one Chinese company after another comes under the Communist thumb, and investors suffer as a result, why wouldn’t the venture funding go to the SentinelOnes rather than the Didis? Even in today’s hot market, there are always more startups than there is funding. Chinese companies, with their unique regulatory risks, are likely to be the last in line.

China has generated amazing innovation, but those days may be coming to an end.

Have a good weekend everyone!

More on tech:

HOW CHINA’S TECH INDUSTRY DIES

CHINA IS KILLING ITS TECH INDUSTRY

INSIDE A STARTUP ACCELERATOR DEMO DAY

Photo: “crushed can” by subsetsum is licensed under CC BY-NC-ND 2.0

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

Hedge Funds’ AMC Death Spiral

Despite losses of nearly $4 billion so far this year shorting stock in AMC Entertainment Holdings, Inc., short sellers are actually increasing their bets against the company:

As AMC tests its key 50-day moving average support level, short bets against the company are increasing, according to data from S3 partners. Over the past week, short bets increased 6% to 5 million shares, worth nearly $200 million.

When a stock is up 17-fold for the year despite a recent correction, and you’ve already taken billions in losses, why would you add to your position? I suspect that some hedge funds, who tend to be large short sellers in AMC, are swinging for the fences because they have little alternative. Many have already taken huge losses, and a few conservative bets won’t bring them back.

Keep in mind the incentive structure for hedge fund managers: they generally make 2% of all assets under management yearly, plus 20% of any gains. That 20% performance fee is what can really make them rich. But, if their fund is down, there’s no performance fee until they’re back in the black.

If only high risk bets can get you back to earning your fat performance fee, you make those bets. Slowly clawing back over a period of years with prudent trades means no performance fees for an extended period, and that’s not palatable to many fund managers. They’d sooner take high risks with their current fund and, if it fails, close it and start fresh with another.

Nice deal for them, not such a nice deal for the pension funds and universities whose money they hold.

If I held a position in any hedge fund that was betting against meme stocks, I’d liquidate it immediately before they lose more and suspend redemptions. The risk here is simply too high and too unpredictable.

There are easier ways to make a buck.

More on AMC:

SHORT SELLERS LOSE $44 BILLION IN 30 DAYS

HEDGE FUND TORCHED BY AMC

AMC + UFC = JACKPOT

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

Photo: “Danger of Death By Failing” by AlmazUK is licensed under CC BY-NC-SA 2.0

When Citadel Almost Died

Meme stock traders on Reddit and elsewhere love to hate Ken Griffin, CEO of Citadel LLC. The hedge fund and market maker manages over $34 billion and handles more US stock trades than anyone else. Many suspect it had a hand in Robinhood limiting buying in GameStop shares, which angered traders.

Its tentacles are everywhere. Citadel is so big, well-known, and rich it almost seems invincible.

But what’s less well known is that Citadel nearly went bankrupt during the financial crisis of 2008:

…in July 2008, Citadel endured the first of six straight money-losing months. Following his old script, Mr. Griffin raced to buy beaten-down assets such as convertible bonds, long his specialty, only to see them take a further beating.

Griffin’s hedge fund lost 55% of its value, and rumors swirled that the fund was about to go bankrupt. That was a very real possibility: 20% of all hedge funds shut down in 2008-09.

Citadel stopped investors from withdrawing money to stanch the bleeding. It also benefited from a helping hand from regulators, perhaps showing its political influence. From The Wall Street Journal:

In particular, regulators pressed Wall Street firms including Deutsche Bank AG not to make drastic changes in their dealings with Citadel, according to these people.

I suspect that if banks had been left to their own devices, Citadel would’ve imploded under an avalanche of margin calls and severed credit lines. When you’re down 50%, much less 55, people assume you can go down all the way. And they want to cut their losses.

With this governmental helping hand, Citadel managed to survive and today is thriving. But I find this history lesson instructive: the mighty can fall, fast.

More on meme stocks:

SHORT SELLERS LOSE $44 BILLION IN 30 DAYS

AMC ON THE THRESHOLD LIST: STRONG EVIDENCE OF NAKED SHORT SELLING

HEDGE FUNDS LOSE $12 BILLION ON AMC AND GAMESTOP

Photo: “R.I.P. Rest In Peace” by Beauteous Babe is licensed under CC BY-NC-ND 2.0

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

How China’s Tech Industry Dies

The Chinese Communist Party has launched a severe crackdown on the technology industry:

  • Didi Chuxing, the Chinese equivalent of Uber, had its app removed from all Chinese app stores shortly after its US IPO
  • ByteDance, parent company of TikTok, shelved its IPO plans under regulatory pressure. Its CEO has resigned.
  • Over 30 tech companies have been hauled in for meetings with regulators
  • Ant Group, a financial company founded by Jack Ma that would’ve been among the largest IPOs in history, had its IPO in China cancelled after Ma criticized authorities

This crackdown makes it nearly impossible for Chinese companies to list their shares in the US, removing one of the main ways that venture capitalists cash out. This will cause venture firms to shy away from investing in Chinese companies.

Why does this matter? Let’s take a look at how venture funding works:

1) Company makes product
2) Company pitches investors
3) Investors give company money
4) Company uses money to hire engineers and make a better product, and…
5) Acquire users through ads and/or building their sales team. Next…
6) With more users and revenue, company comes back to VC’s to raise more money at a higher valuation. Then, they do more of 4-5
7) After repeated rounds of VC funding, the company either gets acquired or goes public. VCs cash out.

But Chinese companies cannot go public in the US for the forseeable future, and even a listing in China may not be possible, as Ant Group proved. And if the Chinese authorities think a US listing brings security risks, surely the acquisition of a Chinese tech firm by a US company would be even riskier and thus also off limits.

What does that leave in terms of exits? Acquisition by a Chinese tech company, which means a lot fewer and smaller potential acquirers. The only other option is an IPO in China, providing the company doesn’t offend anyone. But the Chinese stock market is just 1/4th the size of the US one, so the payoff may be much smaller.

No exit means no investment. For VC firms, the exit is the entire point!

Unlike in China, firms in the US and elsewhere will be able to choose whatever exit is the most lucrative. That means they’ll be able to raise venture capital much more easily. That money will let them hire the best engineers, build the best products, and acquire tons of customers, leaving Chinese firms in the dust.

A couple of years ago, I thought the Chinese technology industry might overtake the US. I don’t think that anymore. With the government’s hand ever heavier, I see Chinese technology falling further and further behind.

The Chinese people have proven they have the skills to compete. But will their government let them?

More on tech:

CHINA IS KILLING ITS TECH INDUSTRY

WHY I JUST INVESTED IN GAUGE, THE BEST WAY TO SELL YOUR CAR

WHY I JUST INVESTED IN CRAFTER, MAKER OF THE MOST BEAUTIFUL ARTS AND CRAFTS KITS IN THE WORLD

Photo: “Vice President Xi Jinping” by nznationalparty is licensed under CC BY-NC-ND 2.0

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Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.