"Not Even Wrong" Podcast
Investing in disruptive technologies with large impact.

Episode December 4, 2020

Repositioning portfolio. More focus on Crispr, gene editing and the new opportunities with protein folding.

Episode December 3, 2020

Chapter 8 "The Innovator's Dilemma". How can a company be best run when dealing with disruptive innovation? How can fund managers spot wealth creation? Focus on values and simple longterm goals with large impact, such as getting rid of fossil fuels or curing disease with one shot genetic manipulation.

Episode December 2, 2020

Chapter 8 "The Innovator's Dilemma". Intuition is the key to managing disruptive innovation. You cannot use patterns and extrapolate from the past. But you can use experience, intelligence, knowledge and flexible adaptation, in short, intuition.

Episode December 1, 2020

Chapter 8 "The Innovator's Dilemma". Companies are a set of resources, processes and values. Today we focus on values. Values are the answers to the question: "What' should I do next". Established companies often suffer from rigid value systems which prevent them from embracing disruptive technologies.

Episode November 29, 2020

Quantumscape and the anatomy of a stock bubble. Solid state batteries are a great scientific problem. But is it a disruptive technology. Tesla at Battery Day has addressed most problems Quantumscape is attacking. What's left?

Episode November 27, 2020

Chapter 7 "The Innovator's Dilemma". How to organize for disruptive markets? Problem is, they don't follow patterns. Best is to size appropriately and follow the technology and usage of emerging customers. In short, build an innovation stack.

Episode November 25, 2020

How relevant are valuations for wealth creation with disruptive innovation? Turns out, not at all. Valuations are a macro variable and not controlled by entrepreneurs. As fund managers we focus on our principle stack and finding and correcting errors in our investment process.

Episode November 24, 2020

Twist Bioscience and disruption. Some parts of the business are disruptive, some are not. The valuation reflects value in building a platform for making life science more like an engineering discipline.

Episode November 22, 2020

Chapter 6 "Innovator's Dilemma". Best way to respond to disruptive innovation. 1/3 Create separate organization 2/3 with appropriate size and 3/3 incentives. VW and GM are not doing that.

Episode November 20, 2020

Chapter 5 "The Innovator's Dilemma". How should incumbents respond to disruptive threats? Best is to build a separate organization that harnesses the new disruptive technology and builds an innovation stack around it. Mingling the old structure with the new innovation does not work. VW is choosing the latter. This is a mistake.

Episode November 19, 2020

When measuring something you need an explanation for what you're measuring, why you choose this particular metric and what you expect. The Why precedes the What. Wall Street often lacks this fundmental approach. We invest based on our principle stack.

Episode November 18, 2020

Bad analysis and false analysis. Both are prevalent on Wall Street. Bad analysis is when you're wrong. False analysis is the kind where you don't allow for criticism and error correction.

Episode November 17, 2020

Chapter 5 of the Innovator's Dilemma. How can incumbents react to disruption? VW offers their strategic positioning to fight Tesla. They want to become a software powerhouse. But they first need to figure out how to adapt their cost structure to compete in a Moore's Law driven car market.

Episode November 15, 2020

Chapter 4 "The Innovator's Dilemma". We finish the discussion of chapter 4 with emphasis on why the cost structure defines a company. Also, discussing the importance of theory and sound analysis in the process of wealth generation. Parallels to science.

Episode November 13, 2020

Innovator's Dilemma case prediction. Disruption in the eduction market. Universities are like the Church before Luther. They will be be disrupted by new entrants. Rapid increase in disruptive innovation in industry will change the employment market.

Episode November 12, 2020

Chapter 4 "The Innovator's Dilemma". Asymmetry of going up market but not down. We discuss Tesla self drive tech stack vs. Waymo. Why Waymo is sticking with high specs while Tesla is disrupting from below.

Episode November 11, 2020

Chapter 4 "The Innovator's Dilemma". A company is defined by its cost structure. Tesla like Amazon is relentlessly focused on adapting the cost structure to capture large markets.

Episode November 10, 2020

Chapter 3 of Innovator's Dilemma. Incumbents loose against disruptive entrants because they cater to their existing costumer base and miss the new markets. Two questions for Tesla. 1/2 Is Tesla disrupting the ICE industry? 2/2 Is Tesla at risk of being disrupted by Chinese entrants?

Episode November 9, 2020

"The Innovator's Dilemma" doesn't explain well why Tesla is successful. "Zero to One" and "The Innovation Stack" are filling in the gaps. To realize our mission we are continuously improving our principle stack to find better explanations for how to generate wealth.

Episode November 7, 2020

Chapter 2 Innovator's Dilemma. How do leading companies loose markets to disruptive entrants? Interesting contrast between Jim McKelvey's Innovations Stack and Christensen. Jim says that innovation is not a choice but a necessity. According to Clayton innovation happens and sorts out in the market place.

Episode November 6, 2020

Chapter 1 of Innovator's Dilemma by Clayton Christensen. Why do successful incumbents give up markets to disruptive innovators? We discuss Tesla and the threat of Chinese EV startups through this lens. Tesla is answering the threat by aiming for a 25k car.

Episode November 5, 2020 II

Tesla competition? One set of competitors is to be taken seriously, the Chinese startups. Nio alone has reached almost 60 Bio. $ in market cap. This is significant. We are discussing the Innovator's Dilemma, Chapter 1 through the lens of Tesla and the competitive dynamics. For now, Tesla is fine. No threats.

Episode November 5, 2020 I

Everything is possible unless prohibited by the laws of physics. It is our job to find the subset where wealth creation is likely. We grow with our investments and find new answers to questions we don't even know today. Knowledge compounds like interest.

 

Episode November 3, 2020

The purpose of generating wealth is to keep building financial and human capital. Our goal is to ask better questions in the future, to identify new types of problems have our capital work towards potential solutions. We call this the idea stack.

Episode November 2, 2020

Trump polarizes not just Main Street but also Wall Street. A few winners such as Amazon or Tesla contrast many losers such as ExxonMobil or Goldman Sachs. If he wins, this will most likely continue. If not, probably same.

Episode November 1, 2020

Introducing the market stack. Conquer one market, kill competition, create new markets, kill competition. Repeat. Concept of "Last Mover" from "Zero to One" means you fire the last shot to kill last competitor. Example, Tesla Battery Day..

Episode October 31, 2020

A problem that is not solvable is not interesting. An interesting problem has to be solvable. The question whether something is interesting is not subjective but based on objective facts. Climate change is not interesting because it's not solvable. Reformulate the question to "how to decarbonize energy" and you have an interesting problem with an interesting solution likeTesla.

Episode October 30, 2020

Markets are jittery because of Covid resurgence and US elections. We took a drawdown of 22% in October. US elections should be over in a few days without large turmoil and a clear decision. Covid should abate and global economy should get back to growth. If that happens, markets look at double digit returns for year end. Otherwise, further drawdowns. Probabilities are tilted to the former.

Episode October 29, 2020

What is the goal of driving? Piecemeal approach vs. "end to end learning" Alpha Zero style. But how can an "end to end learning" strategy deliver full self driving when the goal is not clear? Tesla strategy feels better.

 

Episode October 28, 2020

Resurgence of virus crisis causes market sell off. Markets have no faith in experts and authorities. The problem is not that they don't know how to deal with the virus. The issue is that they don't admit it and keep making knee jerk decisions.The markets will not calm down until this attitude gets fixed.

Episode October 27, 2020

Why don't we let everybody work freely? It's because people differ genetically and therefore compete and oppose. Best solution is visionary leaders giving employees freedom to explore technical challenges.

Episode October 26, 2020

Education is key to the innovation supply chain. Knowledge is a  commodity and can be acquired through a mix of public and online services. More difficult is the acquisition of agency and autonomy, which are key ingredients for wealth creation. Agency is impact and autonomy is the expression of free will and creativity.

Episode October 25, 2020

Adding the book "The Beginning of Infinity" to our stack of principles explains in particular why we believe ingenuity can create wealth. Free will is just another way to say that only by acting free you can develop creativity. And only creativity yields disruptive innovations that create large markets and generate wealth. The measure of wealth is freedom and freedom is the key to wealth. It goes both ways.

Episode October 24, 2020

We are adding one more book to the principal stack of Orange Capital Partners. It's "The Beginning of Infinity" by David Deutsch. The book sets the fundamentals for the other three principles, wich are Zero to One, The Innovation Stack and The Innovator's Dilemma.

Episode October 23, 2020

The measure of wealth is freedom. And freedom is necessary to generate wealth. It goes both ways.

Episode October 22, 2020

Discussing Square versus Tesla. Why are we invested in Tesla and not in Square? Square lacks clarity, leadership and differentiation to become a large company with impact. Tesla doesn't.

Episode October 21, 2020

Disruption in payment systems is just the beginning. Companies like Square and Paypal are in the business of developing an algorithmic commerce platform. As a consequence we expect more efficiency, less cost and faster innovation.

Episode October 20, 2020 II

Discussing David Deutsch's book "The Beginning of Infinity". Drawing lessons from philosophy and physics for investing. In particular, what is a good explanation for an investment?

Episode October 20, 2020 I

What about human capital? A full stack company like Tesla is integrating vertically everywhere but relying on an archaic academic infrastructure for hiring talent. Changing that would require innovating in the human stack. Why not?

Episode October 19, 2020

Never underestimate compound interest. The key to wealth creation is compound interest and that means you have to pick the right situation and stay invested for al long time.

Episode October 18, 2020

Discussing Peter Thiel's book "Zero to One". In particular the question of indefinite optimism vs. definite optimism. The latter is key to wealth creation.

Episode October 17, 2020

Tesla is building a monopoly for a decarbonized energy infrastructure. How much is this worth today? The question is execution and competition. Both look good for Tesla right now.

Episode October 16, 2020

Distributed Living is accelerating. Living, working, playing and raising children wherever your want is liberating and offers tremendous opportunities for businesses such as Tesla.

Episode October 15, 2020

What new ideas are we working on? Snowflake IPO, Programmable Cells, Social Life Style Products. When looking at new ideas we filter them through the lens of Zero to One, The Innovation Stack and The Innovator's Dilemma.

Episode October 13, 2020

Tesla's marketing and PR strategy is an important part of the innovation stack. Selling, communicating and marketing through social media is a skill not to be underestimated. It's a serious competitive advantage.

Episode October 12, 2020

What will be the most valuable company on earth? It's the company with a full innovation stack in one or more large markets. Today the contenders are Amazon and Tesla.

Episode October 11, 2020

Tesla dismantling PR department is just another part of the innovation stack. Solving the problem of information dissemination.

Episode October 10, 2020

Our purpose is to generate wealth by investing in disruptive technologies. We differentiate from competitors through principles based investing, high concentration and high compound returns.

Episode October 9, 2020

The measure of wealth is freedom. Wealth can only be generated with disruptive technologies that increase freedom by lowering cost and improve quality and choice. 

Episode October 8, 2020

Tesla is building a business for a decarbonized energy infrastructure. This has implications for market size and valuation. It also brings up the question of market power. 

Episode October 7, 2020

Charpentier and Doudna win Nobel Prize for developing Crispr technology. Wealth is created when science and engineering come together to enable rapid innovation. Crispr is one of those.

Episode October 6, 2020

Why is Tesla pursuing Nickel mining? Integrating all aspects of the value chain is exactly the right thing to do. At this point in time the integration cannot go too far since Tesla is creating a new market.

Episode October 5, 2020

You can tell a lot about a fund manager by just looking at his portfolio. Diversification is not a good sign. Wealth is generated with concentration, not diversification.

Episode October 2, 2020 Part 2

When competing most companies just congregate around similar products and services. Individuals compete for the privilege to attend the same schools, same colleges and same companies. There is a paradox here. Why does everybody compete when real wealth is created with unique approaches? This question is inspired by Peter Thiel's book Zero to One.

Episode October 2, 2020 Part 1

Tesla Q3 2020 production and delivery numbers are extremely good. Reassuring confidence in demand and execution. The company keeps delivering on positive signals.

Episode October 1, 2020

Discussing two recently read books. 1/ Chip Wilson's Story of Lululemon. 2/Oliver Stones' Memoirs. One common theme is that only unique visionary thinking and grit can create something extraordinary. "Happy people are all unique."

Episode September 29, 2020

Where do we stand? What are we working on? What are expected money makers?

Episode September 28, 2020

Tesla! If you don't win, you loose. Tesla cannot allow competition to catch up. For that, they chose to control the whole value chain of EV manufacturing.

Episode September 26, 2020

"Everybody has a plan until they get punched in the face". Mike Tyson. Tesla punched the car industry on Battery Day and the ramifications are enormous.

Episode September 24, 2020

We look at the Tesla Battery Day through the lens of three books. 1/3 Zero to One, 2/3 The Innovation Stack and 3/3 The Innovator's Dilemma. Wealth creation starts with those three books and Tesla stacks well.

Episode September 23, 2020

Tesla introduced more technology risk at the Battery Day. That means more upside and more uncertainty. We expect investors to rotate.

Episode September 22, 2020

First episode post Tesla Battery Day. Two key take aways. 1/ Value of Tesla is car volume * value of autonomy 2/ Tesla plans for 45% CAGR volume growth in coming 10 years. We expect the stock to deliver at least 30% CAGR.

Episode September 19, 2020

What is your update rule? This is the key question we ask founders when considering investing. A new way to think about wealth creation opens up things.

Episode September 18, 2020

Risk is what gets you fired. Market players continuously evaluate expected returns under the condition of risk. We discuss why it is so difficult for most market players to buy high growth stocks such as Tesla, Square or Lululemon.

Episode September 17, 2020

Inspired by Stephen Wolfram's physics project we develop a new way to think about wealth creation. 

Episode September 15, 2020

Lessons from wealth creators applied to Tesla.. Lululemon founder Chip Wilson talks about the importance of vertical retail and Netflix founder Reed Hastings talks about optimizing for creativity and efficiency.

Episode September 14, 2020

"There are decades where nothing happens; and there are weeks where decades happen". Lenin. Tesla is putting a gun in the face of OEMs.

Episode September 10, 2020

Wall Street obsession with Tesla S&P 500 inclusion. Best is to ignore.

Episode September 9, 2020

Partnerships in business are not good for investors. Tesla and VW have not much to share. Wondering how longterm the Nikola and GM partnership will be. 

Episode September 8, 2020

Play to win, don't play not to loose. Our Tesla strategy case in point.

 

Episode September 7, 2020

Narratives are great for life lessons but dangerous for investors.

Episode September 4, 2020

Tesla is selling the FSD software suite even though it's not complete. This is a part of building the innovations stack.

Episode September 3, 2020

Volatility spike in markets. The purpose of financial markets are to generate wealth through investing in disruptive technologies with large impact. Those matter the most. Daily noise is irrelevant.

Episode September 2, 2020

New Fed inflation policy will drive asset prices. In particular growth stocks with underlying disruptive technologies will benefit.

Episode September 1, 2020

In 1994 the bondmarket sold off and scared the Clinton administration. What followed was a huge effort to reign in deficits. Today the bondmarket is tolerating high deficits and low interest rates. This is a conundrum. We discuss some ideas why.

Episode August 31, 2020

Risks in the market. Bifurcation of economy in winners and losers will drive social unrest. This is the biggest risk. Best way to deal with it is to show kindness.

Episode August 30, 2020

People have two lives, the second begins, when you realize you only have one." This Confucius quote works well for Hedge Funds.

Episode August 29, 2020

When analyzing companies looking at job ads is a useful tool. Tesla is clear and precise. Twitter isn't. It tells you something about the company.

Episode August 27, 2020

Questions for Tesla Shareholder Day. 2. What methods are you using to lower cost of iteration? Is iteration key to battery road map or are you banking on battery breakthroughs?

Episode August 26, 2020

Questions for Tesla Shareholder Day. 1. How do you scale human resources while still keeping the high pace of innovation?

Episode August 24, 2020

We discuss two positions that have lost money so far, INTC and RTX. There is potential for outsized returns when using the right instruments.

Episode August 23, 2020

How to handle tail risk? Example, California wild fires and Tesla Fremont factory.

Episode August 21, 2020

Iteration is key to improving battery technology. Tesla's main competitive advantage is building processes that can be continuously improved through iteration. Battery tech is case in point.

Episode August 19, 2020

Tesla is building a supercomputer to run unsupervised learning on massive video content. We believe they are trying to create for video what GPT did for language. It's a great project with huge potential.

Episode August 17, 2020

Will Tesla license technology to third parties? Even if they did, it won't help third parties compete. That's because Tesla's innovation stack is so deep that copying only certain parts wont help.

Episode August 15, 2020

While Wall Street bets on climate change, Main Street is still skeptical. Why? Because people fundamentally mistrust science when it's not used properly.

Episode August 13, 2020

What is disruption? Disruption stands on three pillars. 1. Clayton Christensen's Innovators Dilemma, 2. Jim McKelvey's Innovation Stack and 3. Peter Thiel's Zero to One.

Episode August 11, 2020

Are there other avenues for knowledge acquisition, other than the scientific method? The question is relevant for science and the hedge fund business. 

Episode August 9, 2020

What do you solve for? The question is at the heart of any business, in particular a business as complex as fund management.

Episode July 31, 2020

Discussing our positions other than Tesla. Performance review, analysis and thoughts.

Episode July 28, 2020

Innovation Stack and Human Stack are two sides of the same coin. You need both. Tesla has the former, working on the later. Key question is, how to avoid an elitist culture as a market leader.

Episode July 28, 2020

Innovation Stack and Human Stack are two sides of the same coin. You need both. Tesla has the former, working on the later. Key question is, how to avoid an elitist culture as a market leader.

Episode July 26, 2020

What do I get out of my job? The hedge fund business is an eat what you catch business. It fosters curiosity, independence and the necessity to be interesting.

Episode July 24, 2020

We need new Moore's Laws such as for battery technology, charging technology, AI and manufacturing technology. Those areas have more potential for disruption than the actual Moore's Law.

Episode July 23, 2020

Why the gold price is bothering me. Higher Gold price is not a good thing. Tesla's stock reaction to earnings is a good lesson for market dynamics.

 

Episode July 22, 2020

Valuation models for equities are difficult to reconcile with current market prices. The reason is that zero or negative interest rates require new models.

Episode July 21, 2020

What we are is best explained by what we are not. No diversification, no excessive trading, no fund raising for the sake of fund raising and no obsession about volatility. 

Episode July 20, 2020

Focus on Fed credit and liquidity measures that are driving risk asset prices higher. Disruptive companies with real organic growth are beneficiaries.

Episode July 18, 2020

Discussing two books, Dr. Faustus by Thomas Mann and Moby Dick by Herman Melville. Is there a limit to positive force and the "can do" mentality? Is genius a pact with the devil? How far can disruption take us and is it always good?

Episode July 17, 2020

Discussing "I am a Strange Loop" book by Douglas Hofstadter. Tools for thinking. Reflection on AI and what is possible. Thinking about thinking is not just useful but absolutely necessary in the hedge fund business.

Episode July 16, 2020

There are three vectors Tesla is riding on to become a trillion dollar company. One is AI, one is harnessing the power of the sun and one is building the machine to build the machine. Today we talk about harnessing the power of the sun.

Episode July 15, 2020

Tools for ​running a hedge fund. It depends on your purpose. In our case it's getting better at spotting disruption and refining the concept of social impact. 

Episode July 14, 2020

Reverse Dispersion is how incumbents take advantage of disruptive technology. Example Intel.

Episode July 13, 2020

Is capitalism an algorithm gone wrong? Yes. Also discussing today's massive market reversal. It's a great lesson for what it feels like to run a hedge fund. 

Episode July 12, 2020

Alex Honnold talks about free soloing El Capitan. There is an interesting connection between free soloing El Cap and running a hedge fund.

 

Episode July 11, 2020

The three vectors Tesla is working on towards a trillion dollar company are AI, harnessing the power of the sun and accelerating AI in manufacturing. Today we talk about AI and the self drive effort. 

Episode July 10, 2020

Zero interest rates require new valuation models. Growth stocks appear overvalued based on old models. But are they?

Episode July 9, 2020

We discuss our first half performance. The main driver was actually Macro. Quoting Keynes. 

 

Episode July 8, 2020

Purpose is key in the investment business. Elon Musk is very good at formulating purpose. What is our purpose?

Episode July 7, 2020

The argument for a short squeeze in Tesla stock. It's not the shorts, it's the index trackers that are buying to match their benchmarks.

Episode July 6, 2020

The rate of disruption depends on the cost decline of iteration. The more iteration the more disruption. Both AI and Biotech are in this sweet spot. 

Episode July 3, 2020

We expect Gold to depreciate in the coming years. Gold is the inverse of disruption and real economic growth. And we expect more of that to come.

Episode July 2, 2020

Skunk Works is a book about technological ingenuity and institutional complacency. US dominates tech because of army of entrepreneurs. See Space X or Boom Supersonic.

Episode July 1, 2020

Fed pulling uncertainty out of interest rate market lifts demand for risk assets. Entropy doesn't go away, it only shifts from one place to the other. 

Episode June 28, 2020

How would Laplace's Demon do as an investor? My guess is, not well. Looking for better vocabulary in the hedge fund business. 

Episode June 27, 2020

Do we have the right vocabulary for risk taking? Sometimes I feel like we're watching the weather from above and trying to analyze specific situations on the ground. 

Episode June 26, 2020

Experiencing and internalizing uncertainty is key to running a hedge fund. The test is on right now. 

Episode June 25, 2020

Markets shaken by resurgence of virus cases. The problem is we don't have proper institutions to deal with the issue. 

Episode June 22, 2020

The transition from analog to digital intelligence is the biggest event on Wall Street.

Episode June 19, 2020

Mindset is the weapon. In the business of disruption mindset is the competitive advantage. 

Episode June 18, 2020

Key characteristics of winners. 

Episode June 16, 2020

Is the board of Tesla overpaid? Thoughts on board compensation and relevance for Tesla. 

Episode June 14, 2020

"When fighting Monsters make sure you don't become a monster" (Friedrich Nietzsche). We're concerned that yield curve control makes the Fed a monster. 

Episode June 12, 2020

Define variables we control. What are the degrees of freedom of a hedge fund? Less than you might think. 

Episode June 11, 2020

FOMC press conference and market sell off. Market testing Fed stance on negative rates and yield curve control.

Episode June 10, 2020

Recent performance of TSLA and MSFT.

We start buying longterm calls on growth equities. 

Episode June 8, 2020

Disruption in nature and business. Lessons from the transition of fish from water to land. 

Episode June 6, 2020

Explaining why Podcast was named     

"Not Even Wrong"

Episode June 5, 2020

Falling longterm interest rates in the US will boost prices of quality assets

Episode June 3, 2020

Purpose of "Not Even Wrong" Podcast