Capital Allocators Monthly - April 2022
“Take the high road. It’s less crowded.”
– Warren Buffett
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Capital Allocators Premium members receive transcripts, Ted’s investment blog, gatherings with show guests, and a weekly email. This month, we’re giving access to Ted’s most recent blog.
The Melvin Dilemma. In the early days of institutional interest in hedge funds, Byron Wien published a paper entitled “The Inherent Instability of Hedge Funds.” He described how strong performance leads to inflows, which can shift the investable opportunity set away from the one in which the manager thrived, and weak performance can lead to concerns over the stability of the organization.
Melvin Capital has experienced both performance extremes and is tasked with figuring out how to move forward. The present dilemma for Melvin, its investors, and the industry is a real-time case study on incentives, option value, and decision making under uncertainty.
Read ‘The Melvin Dilemma’
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Announcements
Supercharge your Productivity. Khe Hy is launching his 10th cohort to design systems to help identify and implement your most impactful goals. Registration closes May 3rd.
Listen to Khe Hy on Capital Allocators
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Check out our Guests Making Waves! As a part of our Premium subscription, we share news about past guests on the show, and it was a heck of a month for our community.
During April, Annie Duke joined First Round Capital, Chris Dixon topped the Forbes Midas list, Homebrew announced Homebrew Forever (without outside capital), Brett Jefferson sold a stake in Hildene to Leucadia, and Ash Williams joined JPM Asset Management. We take no credit for the Capital Allocators boost
Hot Jobs to Share. Send interesting opportunities our way and we’ll share them with the community. For job hunters, our Premium members get an early look at Hot Jobs before the rest of the crowd.
Advocate Aurora Health. The Chicago-based fund overseeing $15 billion in not-for-profit and pension assets is bringing on three Investment Analysts to its 10-person team. Candidates will be considered for senior analyst based on experience.
Investment Analyst
Senior Investment Analyst
Capital Allocators China. An exciting opportunity to grow the Capital Allocators brand abroad! Our Chinese affiliate group is looking for an Entrepreneurial Associate to join their staff.
Reading
Ordered by reading time: tweets first, books last, and blog posts and articles in between.
1. Decision Education Podcast. Season 3 of the Decision Education podcast from Annie Duke’s Alliance for Decision Education has kicked off with popular Capital Allocators guest Katy Milkman. Listen Here.
2. Dollar Dominance Here to Stay. Sebastian Mallaby takes a contrarian view to the adage that the weaponization of the dollar will end its role as the global reserve currency. Read Here.
3. MIT 15-year letter. Seth Alexander’s thoughtful, infrequent letter shares deep insights into the operations and investing of MITIMCO. Read Here.
4. Yale 2021 Endowment Report. A beautiful ode to the life, career, and impact of David Swensen. Read Here.
5. Streaming Tech Stories. The series on Uber (Super Pumped) and WeWork (WeCrashed) are exceptional tellings of the trials and tribulations of two marquee, venture-backed companies in the sharing economy and their passionate founders. Watch Super Pumped & WeCrashed.
Listening
Capital Allocators Episodes
EP.244: Steve Papa – Entrepreneur’s Perspective on Venture (Venture is Eating the Investment World EP. 13)
EP.245: Sebastian Mallaby – The Making of the New Future in Venture (Venture is Eating the Investment World EP.14)
EP.246: Tom Lenehan – Taking the Helm at the Wallace Foundation
EP.247: Louis-Vincent Gave – Macro Consequences of Government Sanctions
Manager Meetings Episode
EP.29: Andrew Milgram – Mid-Market Distressed Investing at Marblegate
A Word from our Sponsors
Janus Henderson Investors. This month from Janus Henderson’s institutional blog, past Manager Meetings guest, Danial Graña, CFA, and his team explain why ESG factors are becoming increasingly important in the analysis of EM companies.
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Listen to Long-Term Trends in EM
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