Andy in San Diego

Peter Thiel’s startup class at Stanford (Blake Masters): This is the best collection of new venture knowledge that I’ve read in a very long time, and it’s definitely the best link I’ve posted in this site’s short history. The following link goes to the class notes of a Stanford student that is currently taking the startup class taught by Peter Thiel (co-founder of Paypal, early investor in Facebook (Clarium Capital), and partner at Founder’s Fund). It is well worth the time and I’ll be making a follow up post with a short summary of take aways from each lesson.

Stop calling yourself CEO (Tech Crunch): Pretty good article outlining why it’s annoying and not particular business savvy for a startup founder to display in big bold letters that he is in fact the CEO of his company. For the most part it comes across as arrogant and really doesn’t serve any real business purpose. Well written article that is worth the read.

Foreign Exchange Long/Short Snapshot (Dow Jones): Dow Jones has a pretty good info graphic that shows whether the market is long or short a particular currency verse the US dollar. It’s an interesting way to quickly look at what the consensus is on a particular country’s currency outlook.

 Calling Gundlach a “Jerk” Propels Career (Bloomberg): For those of you that don’t know Jeffrey Gundlach,  he is the “god of bonds.” He is a perpetual all star in the fixed income world and is also thought of to be a grade-A asshole. Take this quote from Jeffrey for example (which I really enjoy) “The reason I’m so polarizing is, if I don’t respect someone or don’t think highly of someone, it’s like they don’t exist, and people don’t like to be invisible.” That is Jeffrey Gundlach. Check out the article.

Steve Blank’s new Startup Manual: Steve Blank is coming out with a 608 page “manual” on a host of different things one should know when building a new venture. Steve Blank is a serial entrepreneur with years of experience and a wealth of knowledge. I will be checking out this book as soon as I get through the stack of books already in my queue. Actually I’ll probably get the book well before I’m even close to finishing the books I’ve already got lined up.

The Whale has taken a hit (Bloomberg): On April 16 I mentioned that a trader in JP Morgan’s Chief Investment Office by the name of Bruno Michel Iksil was moving the CDS market with a massive position. Well it looks like that position went massively against Bruno, and JP Morgan announced on Thursday that they took a $2 Billion dollar loss. As of a few hours ago the head of JP Morgan Trading is stepping down along with two others. This just adds more fuel to the fire against value-at-risk models and whether or not large financial institutions are taking on more risk than they should. Barney Frank is probably overjoyed at the bullshit he can derive from these latest events.

Photo: Nice bikes Steve. (Workin For The Man):

This week was a little bit slower than usual on content worth posting. To put that into context I generally have 13 to 14 items that I’ve saved to potentially put in a post, and I whittle those down to 5 or 6. This week I was only able to gather 6 that I thought were worth saving, and all of them are related to Finance. That being said enjoy:

David Einhorn explains the Fed (Huffington Post) – I don’t believe I’ve ever read the Huffington Post due to a reputation for publishing less than great articles. However, David Einhorn expertly utilizes Simpson characters to illustrate what the Fed is doing, and why he thinks their actions are wrong and misguided. It’s a great read and well worth looking into.

John Arnold retires! (CNBC) - For those that don’t know John Arnold, he is considered to be one of the all time greatest Natural Gas traders. A former Enron trader, his claim to fame was taking the other side of Amaranth Advisors $6+ billion dollar position in 2005, and by doing so he increased his personal wealth by over $900 million. He is currently 39 years old and resides in Houston, TX.

Occupy my balls (CNBC) - For those that don’t know the occupy wall street bull shit has begun again, and their parade of anti-capitalism was not well received by a group of construction workers on West 46th Street.

“Invert. Always Invert” (Distressed Debt Investor) – Hunter has put up another great article on the age old adage that spotting paradigm shifts is the key to investing success. My favorite takeaway from the article is a quote by Charlie Munger and his advice to always invert your thesis on a security to gather a better understanding of what the other side of a trade looks like.

Entrepreneurship and Optionality don’t mix (Information Arbitrage) – Roger Ehrenberg outlines a central tenet that hyper focus is a key characteristic of successful entrepreneurs. The idea that you can both build a successful business and keep your options open is not an optimal strategy according to Roger. He explains that the best entrepreneurs have a single hypothesis that they attack with 100% of their time. If it fails, so be it, but you’re not going to have earth-shattering success by splitting your time among a bunch of different things.

Photo (Source):

Hyper Focus is the Key (Mark Suster) – VC Mark Suster writes a short article on how entrepreneur’s tend to spread themselves too thin, and that this leads to doing a lot of different things in an average or sub-average way. He stresses that the leaders of any entrepreneurial project need to be careful about how and where they spend their time.

Some Olympic Thoughts (Mark Cuban) - Excellent article by Mark Cuban who stresses the fact that Olympic athletes should be paid, and its not all about Dwyane Wade and those professional athletes already making millions. Mark makes a good point that a lot of olympic athletes are “severely underpaid” compared to the profits enjoyed by the IOC.

Harvard’s B-School boot camp (CNN Money) – Harvard is doing an interesting experiment where 150 student teams are given $3,000 in seed capital and told to build a viable business. They also put together a market where students can trade shares in each of the companies giving a free-market atmosphere to determining which companies are worthwhile and which ones need some work. I enjoyed the story of one student who parlayed his $100,000 in virtual money into $2.4 million by shorting his classmates’ weaker ideas.

Know Why You’re In a Trade (Kid Dynamite) - Age old adage that if you don’t have a specific reason or thesis for why you’re in a trade, then you shouldn’t have a position. The biggest take away I get from this rule is that if you have a thesis for your positions then it makes it much easier to know when to exit those positions.

A High Frequency Trader’s Apology, Pt. 2 (Chris Stucchio) – This is Chris Stucchio’s followup post on High Frequency Trading. In this article Chris goes more in depth on why high frequency trading adds value and why the attacks on the industry may be misguided.

Photo: Looks heavy (Source):

What Happened to the Future? (Founders Fund) – The Founder’s Fund Manifesto is flat out excellent. Bruce Gibney, a partner at Founder’s Fund, writes a great 9 page piece on how the state of startups isn’t tackling the big and almost-impossible problems that companies like Intel, IBM, and Apple conquered. Its a great piece with a great tag line: “We wanted flying cars, instead we got 140 characters.”

If I Were a Broker, Here’s How I’d Sell Facebook (Reformed Broker) – I’m a big fan of Josh Brown’s writing and insight into the financial services industry. His post on the approach broker’s use to distribute IPO shares is a great read and well worth the 5 minutes.

The Poor Don’t Work Because They’re Economically Rational (Chris Stucchio) – I recently ran across this guy’s blog, and I’m glad I did. The above break down of the utility value of working versus the utility value of time for individuals earning less than 30k a year is hilarious.

My Sister’s Pension Assets and Agency Problems (Jeremy Grantham) – Grantham’s Q1 2012 Shareholder Letter is out, and like always it’s well worth your time. He breaks down some of the behavioral characteristics of asset managers and how they’re career risk leads them to follow along with the rest of the pack. I suggest digesting it when you’ve got some free time.

JETMAN: Update – Jet Man was taken offline. I was unable to find it in a quick search. The video below is awesome, best piece of media I’ve seen all week. Nothing else needs to be said.

Photo: Secret To Life (Venn Diagram):

Snazzy Watch (Pebble) - There’s a pretty cool watch project on Kickstarter that allows users to control their iPhone or Android from the wrist. The thing that jumps out to me is that the project had a goal of raising $100,000; and the current funding count stands at a tad below $2,900,000. I’m thinking this watch is going to be popular.

Bruno moving markets(WSJ) - The Wall Street Journal had a story about a low key JP Morgan employee in London named Bruno Michel Iksil who is making some major waves in the credit markets. While I have absolutely no idea what the makeup is of the entire position, I do enjoy reading about traders taking monster positions, reminds me of guys like John Arnold.

Houston getting paid (Reformed Broker) -  Interesting info graphic on the cities with the highest wage growth in the United States. Houston takes the top spot at 9.8% growth since 2006, and its always good to see Houston getting recognized for something other than being the country’s fattest city.

Howard Marks’ “Deja Vu all over again“ - Howard Marks, Chairman at Oaktree Capital, penned an impressive client memo in mid March that I just recently got to read. He outlines how history can be a great tool for investing with some great anecdotes, and even better quotes. My favorite comes from Mark Twain “History doesn’t repeat itself, but it does rhyme.” I suggest checking it out.

Million dollar bad beat (Deadspin) – This is just a brutal story from Deadspin about a best buy employee who pitched a perfect 9 innings in MLB 2k12. The only problem was that he himself hadn’t scored any runs, so it was a bad news when 4 and 1/3rd innings later he gave up a hit, punched his xbox, and took off to work his afternoon shift. No million dollar pay day this time.

Photo: 2011 Coachella

Below are a few things I found interesting this week. There’s the future of cell phones, the pit falls of a big VC firms investing in your young company, some expensive digs, becoming an educator, and why you’re not really connecting with anyone on Twitter. Enjoy.

Google Lab’s new Augmented Reality (NY Times) - Google is working on a new pair of frames that allows users to interact with their cell phone, while leaving said cell phone in their pockets. The concept eye glasses utilize a heads up display that allows you to send/ receive text messages, get directions, check out your calendar, and virtually anything else you can do while looking at your cell phone screen. Check out the corresponding article and mock video in the New York Times article above.

Big VCs in the Seed round (Chris Dixon) - Chris Dixon,CEO of Hunch, warns about the pit falls of taking seed capital from well known venture capital firms. The biggest danger is if the fund does not follow on during your company’ s Series A round then other potential investors are going to take that as a strong signal not to invest. In my opinion this is an efficient market doing its job, and other investors should take into account that a very smart well-informed investor is passing up on the company. However, Chris points out that it could just be a poor fit for the current investor and that on certain occasions this investor aversion is undeserved.

Most expensive real estate in the world (WSJ) - An interesting look at the most expensive places to live on Earth. Monaco takes the top prize with a strong $5,408 / sq ft. Which would value my current apartment at $4,867,000 dollars.

Quora: Question of the week – How does one become a professor at a top University? - Quora is an excellent site that I don’t visit often enough. The following paraphrased question, How does one become a professor at a top institution, is answered fantastically by Samual Madden, a professor at MIT. The level of detail in answers sets Quora apart as an online question-asking community.

Sherry Turkle’s “Connected, but Alone” (TED) - This is a fantastic TED talk that I  whole heartedly agree with. The basic premise is that Social Network’s like Twitter and Facebook have overwhelmingly positive results. However, people are starting to become dependent on them for “artificial” connections with others. I find it reassuring that this is coming from one of the few people who spoke in favor of chat rooms and the social aspects of the web during 1995, when there was a large public “fear” that chat rooms and connecting over the web was a recipe for disaster.

Photo: Nice House (Source) -