Blockhouse Archives

Bridgewater co-CIO Greg Jensen, on Nvidia's vendor financing: "People look at this vendor financing and think it's because of normal bubble dynamics. This is how they're gonna get their revenue. Not at all." "Nvidia could get as much revenue as it wants. They have no problem selling these chips, but they don't want to set up a system where they lose their competitive edge." "Their problem is Google is a true competitor." "They're like Standard Oil in the Gilded Age, trying to create monopolistic control on things..." "...everybody's gotta lock up. Who do I partner with? Where am I gonna get my chips and power? And if I don't do it, I'm gonna die."

AHL co-founder and Winton founder David Harding, on the '90s convertibles boom he says they missed, and Ken Griffin at Citadel: "I definitely didn't think that... trend following would work as long as it has" "The one I pick on is Ken Griffin at Citadel who he was doing convertibles, which is a completely different world." "A lot of money was made in the '90s out of convertibles." "I'm not saying we could've been Renaissance... but we definitely could've developed convertible arbitrage"

Numerai (@numerai) founder and CEO Richard Craib (@richardcraib) on why buying the S&P isn't really passive: "...the market portfolio is amazing. It's like my favorite thing. One of the things I don't like is that people call buying the S&P passive investing because it really hides the ball." "...in reality it's actually you've got 500 of the world's best CEOs to actively manage your capital all day, every day." "So why do you think the market portfolio is boring? That's almost sci-fi level amazing."

Third Point founder Dan Loeb on buying the Twitter buyout debt: "The Twitter debt was a resale of the financing debt that was offered when Elon bought the company. Morgan Stanley sat on it for a while. It was deep underwater. When it got close to par, they decided to sell it." "Most credit investors were really scared and nervous to buy that, even though it was, like, 96, 97 cents on the dollar. It was yielding around a 12% yield." "We were comfortable enough with the underlying value of the business and with the fundamentals that we made that, at that time, our largest credit position."

Renaissance Technologies CEO Peter Brown on arguing against Jim Simons to add risk during the 2007 quant quake: "I ran into my office, and I found Jim, Bob, Paul Broder, who was the head of risk control, all holed up, and the office was full of cigarette smoke." "Jim was interpreting every little wiggle in various graphs. He was really scared, and he wanted to cut back, and hard." "I argued that we should not cut back, that this was gonna be the greatest money-making opportunity we'd ever seen, and if anything, we should increase our positions. But it was three against one." "And then at one point, miraculously, the whole thing came roaring back, and indeed, it was an incredible money-making opportunity."

Balyasny's Global Head of Quantitative Research Giuseppe Paleologo (@__paleologo) on the LCH study showing just three firms, including Citadel and Millennium, made 38% of hedge fund P&L over three years: "There was this LCH study that showed that 38% of the P&L in the past three years in hedge funds was generated by three firms, 38%." "So this tells you how concentrated the industry is, and it's getting more concentrated." "It's crazy, 40% of AUM is passive." "Passive used to be zero. It's almost 40%."

CNN AI correspondent Hadas Gold (@Hadas_Gold) on Nvidia losing Jensen Huang with no succession plan, days before Tuesday's earnings: "Nvidia famously did not have a succession plan. Jensen Huang was very much against a succession plan." "He said that he just wants everybody to learn how to run the company, but that he wanted to run the company until he dies." "Now he is out. He is completely out of Nvidia." "They're actually supposed to be reporting earnings on Tuesday." "...even though Nvidia's business is still very strong, people still want their chips..." "...a CEO like Jensen Huang who is out, that is going to cause some challenges for the company." "So it's just hard to overstate what a earthquake this is for the AI industry."

Citadel founder and CEO Ken Griffin on what a market maker like Citadel Securities does when you sell $50 million of a stock: "Which means that when you go to sell $50 million of a stock, if there's not a buyer in the market at the exact same instant, you're not pushing that stock price unduly." "The market maker will use their capital to facilitate your trade, and then will hope to find the eventual buyer of your stock at some point in the future." "In the United States, we trade almost 25% of all the equity that trades every day."

Tudor Investment Corporation founder Paul Tudor Jones on watching Bunker Hunt's silver squeeze collapse in 1980: "...I think this silver here is the most valuable asset and resource on Earth." "Someone asked him, 'What are you gonna do with all that silver?' And he goes, 'I'm gonna bury it.'" "...he buys 20 million ounces at 35 bucks." "...it goes to 50 bucks, so at 50 bucks now he's worth about 11 billion..." "The commercials had been just eradicated, because they're sitting there holding physicals and having to put up this margin every day." "...made it liquidation only. Silver collapsed. It went from 50 bucks to under 10 bucks in the space of about eight weeks." "...that had a searing impact on me..." "Right then and there, I would never own anything... or trust anything for the rest of my life."

Jensen Huang founded Nvidia 33 years ago. Bettors now think he won't even keep his seat on the board. 65% say he's off the board by year-end. 91% by 2028.