Tuesday , April 20 2021
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Epsilon Theory

Mailbag: ET Forum Edition

Back in the earliest Epsilon Theory days, I used to write a regular Mailbag note that was modeled after what Bill Simmons used to do for his ESPN Sports Guy column and then later at Grantland. I tried to make it funny and entertaining, with a smattering of new writing and observations, and I’d always end it the same way Bill did, with an absolutely nutso reader email and the tagline: Yup, these are my readers. I think it was a popular feature for Bill, and it was for me, too....

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The Missing Wall of Worry

DISCLOSURES This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability...

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What Do We Need To Be True?

Source:  Cnes2021, Distribution Airbus DS There are these two young fish swimming along and they happen to meet an older fish swimming the other way, who nods at them and says “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes “What the hell is water?”David Foster Wallace, in 2005 Commencement Address to Kenyon College There is a funny thing I’ve noticed about telling that David...

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Drawing the Narrative Battle Lines

DISCLOSURES This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability...

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ET Podcast #8 – Leverage and Its Discontents

The Epsilon Theory podcast is free for everyone to access. You can grab the mp3 file below, or you can subscribe at: Spotify: https://open.spotify.com/show/3ZXOnreiGGiUtuGHzbin6d Apple: https://podcasts.apple.com/us/podcast/epsilon-theory-podcast/id1107682538 Three blow-ups in three months: Archegos, Greensill, and Melvin Capital. What do they have in common? Insane leverage employed to maximize private gain, provided by lenders that can socialize losses. ET...

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A Tiger Can’t Change Its Stripes

Oh, wait. That’s not a tiger. That’s a raccoon. In Epsilon Theory-speak, a raccoon is a financial scammer, a fraud. Raccoons are everywhere in the investment world. I hate raccoons. Over the past few days you’ve probably seen an article or two about Bill Hwang and the collapse of Archegos Capital, Hwang’s hedge fund with an estimated $10-15 billion in assets that was levered up more than 5x across multiple prime brokers, and came tumbling down in a “margin call”...

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Tiger King

DISCLOSURES This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability...

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Hot and Cold

To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. Your email will not be shared with anyone. Ever. We are in a cold war with China. That is, as we say, not a prediction. It is an observation. Feel free to disagree with it. But you also ought not to read anything too portentous into the term. Cold wars aren’t declared, after all. Observing their existence is the limit of what we can do. In any...

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The Darnold Dilemma

DISCLOSURES This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability...

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ET Live! 3.16.2021

DISCLOSURES This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability...

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