2026年6月随性杂谈

All right, hello and welcome to Yet Another Value Podcast. I'm your host, Andrew Walker. You are here today for my monthly random ramblings for the month of June.

We're going to get there in 1 second, but I'll start with the way I start every podcast: Nothing on this podcast is investing advice. There's a full disclaimer at the end of this podcast and in the show notes, and remember, that's always true. I'm just rambling like a madman in my little, tiny closet of an office right here, so that's my disclaimer.

Today, I've got 5 topics I'm going to talk to you about. We're going to start with my thoughts on SBF's Cursor investment and whether he was the greatest VC of all time. How do we marry that with the convicted fraud that he committed—a fraud, a Ponzi scheme; I'm not sure what it's called?

Then I'm going to move into some thoughts on AI, some thoughts on the KPMG report that hallucinated AI, and some thoughts on the power of brand going forward in AI. Again, I'm just rambling. These aren't guaranteed thoughts; I'm just thinking out loud, but I think they're very interesting.

I'm going to end with a thought on time-horizon arbitrage. Every investor says, "I've got a long-term horizon, and that's my edge." I'm going to be honest: 10 years ago, I probably would have said the same thing, and I have just gotten very, very skeptical of that thought process.

That's not to say you need to outperform every second of every day of every year, but I've seen 1 too many people say, "I've got a long-term time horizon, and I will outperform," as they underperform for 20 years in a row. So, some thoughts on time horizon, and then I wrap up.

I say I'm going long. I say I can't do it, but I wrap up the Polymarket changing-rules story. There's been a lot there. Polymarket, if there's a market in question, has ways to resolve it.

There was this thing where MicroStrategy filed an 8-K on June 1st that said, "Hey, we sold our Bitcoin during the week of May 31st." There was a Polymarket question that said, "Will MicroStrategy sell Bitcoin by May 31st?" It resolved no, even though they filed the 8-K.

I just thought that was fascinating, and prediction markets are fascinating. They can be reflexive. They can have real impacts in the world, so I end with thoughts there.

Let's go to the random ramblings, but first, a word from our sponsors. This podcast is sponsored by AlphaSense, and more specifically, my upcoming AI webinar with AlphaSense. Look, the AI landscape is crazy if you're an investor. It's crowded, it's confusing. Everyone's telling you to adopt AI, but nobody is telling you what tools to use. How do you adopt AI? Should you be focused on using it as a superpower? Or should you be building your own tools? How do you get used to it? All this sort of stuff. I personally find it's a lot of experimentation. It's a lot of fun, but it's really confusing, and it's really scary. So, anyway, I told AlphaSense about my problems, and they organized a webinar to try to help out. I'll be sitting down with Dave Wang of Wall Street Prompts and Ben Collins of AlphaSense to break down the modern AI stack for investors: horizontal platforms like OpenAI and Claude, agentic workflows, and finance-specific intelligence tools, and where each one can actually fit and help in a real research process. So, if you're trying to get better at AI, improve, or develop AI-enabled workflows, you're not going to want to miss this webinar. We're going to record it next week, around June 18th, and it'll be going live June 25th. So, there'll be a link to register in the show notes, and please feel free to lob in any questions you have on using AI, whether they're general tools or AI-specific tools like AlphaSense. So, thanks, AlphaSense, and I'll see you for the webinar soon. Let's dive into it. I'm going to lead off with some thoughts on SBF's Cursor investment. Look, if you've been online, you've seen a lot about SpaceX's IPO, obviously, but SpaceX this week announced they were buying Cursor for about $60 billion.

There are lots of articles on who was invested in Cursor early on. SBF and FTX were invested in Cursor, and I think they owned about 5% of it. If that had worked out, it would have been $2 billion or something.

SBF also had early investments in Anthropic. I think he had an investment in SpaceX, and he had some in Robinhood. He had all these great investments.

People were saying, "Oh, my God, he's in jail. He sold his investment in Cursor back to Cursor at cost." And not he sold it—the FTX bankruptcy court sold it. There was all this sort of stuff.

You look at this and say, "Was SBF the greatest venture capital investor of all time?" I've just been thinking about that a lot because, look, he belongs in jail. He ran a fraud. We can say it: He's convicted and he's in jail. He ran a fraud, all this sort of stuff.

But you look at that and say, "Okay, someone who is running a little fraud, a little Ponzi scheme—whatever you want to call it—is running that, and on the side they're doing this VC investment firm. It's literally the greatest VC investment firm of all time."

First, you say, "Why were you running the fraud? You're running the greatest VC investment firm on Earth. You would have made quite a good bit of money if you were doing that and if you had real talent." So, you look at that and say, "Was there a talent? Was there some unbelievable genius?" All this sort of stuff.

I don't know. I've just been thinking about it. I'm going to be honest with you: I've never made an investment close to as good as buying 5% of Cursor at whatever the valuation was and then having it rocket-ship off to get taken out by SpaceX for $60 million inside of a couple of years. I've never made an investment that good, so I don't know.

If you just look at that, VCs would give—the whole venture model is that you hit 1 or 2 grand slams. A grand slam in VC is 1,000×, not 4×, right? He hit 3. He had SpaceX, he had Cursor, he had Anthropic, and I think he had 1 or 2 more in there.

On 1 end, you're like, "Okay, this guy was a super-talented VC. Is he just in the top 1%?" But on the other hand, I've been thinking that venture capital is this game, this business, and a lot of it is the network and everything.

A lot of VC is being plugged in. I will have friends come to me and say, "Hey, we're launching a VC firm to—" Not friends, because I try to always support friends with the ask-for-investment stuff, but loose acquaintances—people I haven't talked to in 10 years—will email me and say, "Hey, I'm starting a VC firm. Can you help me on the phone?"

I'm like, "Oh, my God, I know where this is going." Then they ask, "Hey, do you want to write a check into it?" I'm like, "Man, your background is in marketing. You think you're going to invest in AI firms?"

You're really facing a real selection-bias problem here, right? Anyone who will take your check in the AI area has been turned down by all the top VC firms. The top VC firms have said, "Hey, something about this person or the plan isn't worth us backing."

If somebody came to me and said, "Hey, Kleiner Perkins will buy 10% of my company for $1 million, or Andrew, you'll buy 10% of my company for $1.1 million," and it's a startup, I would honestly tell them they should take the Kleiner Perkins deal, or the top VC firm's deal.

Why is that? Because there's a branding thing. When you go to employees, customers, and other people and say, "Hey, this top VC firm backed me," that's a branding thing, and that's going to help you bring in employees.

As great as I think I am, if you say, "Hey, Andrew Walker backed me," employees and customers aren't going to know that. You're not going to get that. So, you're going to get access to better deals, better talent, and all that sort of stuff.

The VC firms do have a real network effect and a real brand effect. We're going to talk about brands later in this ramble, but they do have that.

I wonder if, because SBF got so much money so quickly and so much buzz—people were saying that he was the future of crypto—he was willing to spray money around. This is what happens with all frauds.

A few years ago, I read a book on all the frauds, and when you read them, it is so stressful reading about frauds. Just imagining being there and running a fraud has to be insanely stressful.

When you read about them, one of the common characteristics of all the people who are running frauds and Ponzi schemes is that they're willing to spray money around because it's not their money. Maybe there's a little piece in the back of their mind that says, "It's not my money. I should just give it away."

1MDB is spraying money around, giving it out to everyone. With Enron, they were spending money on crazy stuff, investing in all sorts of things. That's what I'm thinking through with frauds.

SBF was running this big fraud. He was getting a lot of buzz as the future of crypto, the best exchange, and all this sort of stuff, and he was willing to spray money into anything.

I wonder if that bootstraps the VC network effect on steroids. Maybe there's something interesting there. You kind of frauded your way into the VC network effect.

Could a really rich person just create a VC network effect like that? I think rich people would argue yes, but have they done it at the SBF-on-steroids level? I don't think so.

Masa over at SoftBank would kind of be the only other one I can think of where there are huge highs and huge lows, and he's known for being willing to invest in just about anything. But because he sprayed so much and has so much money, he does get access to all the deals. The returns are very lumpy, but he's hit so many grand slams. Every time SoftBank is down and you think they're counted out, the AI stuff ends up working out for them. Yeah, WeWork didn't, but the WeWork, you know, the valley and then the unicorn slides, it actually worked out quite well for them.

So, look, I don't know where I'm going with this, but it's really interesting to think about because you look at multiple grand slams that any VC fund would consider among the best investments they've ever made, all made by the same guy in a very short period of time while he's running a fraud. Is there learning there? I don't know the answer, but it's something really interesting. And I will be honest, I'm pretty negative on—look, I'm going to give a really hot take—someone who committed a massive fraud. So, I'm a little skeptical, but it does have me questioning things.

One other thing while I'm here: I mentioned I read the great fraud books, and I was thinking about SBF. One of the tough things with running a fraud and getting liquidated, or running something with leverage, is that you can't hold on to the end, right? But if SBF had been able to hold on to the end and had this Cursor investment, the Anthropic investment, the SpaceX investment, and a few others, they would have made so much money, right?

I was trying to think of big frauds or big bankruptcies that had really valuable assets inside of them. A lot of bankruptcies do have assets inside of them, right? GGP is one of the biggest special situations home runs of the global financial crisis: very valuable malls and very valuable real estate. They filed for bankruptcy just because there was a liquidity problem. There are companies that have gone bankrupt and had valuable assets, but I couldn't think of any that had assets like this. And yes, it's parabolic VC investment stuff, but I couldn't find any frauds or big blow-ups that had investments this valuable inside of them.

Enron had some pipelines, and famously, I believe Kinder Morgan had the plan for pipelines, but Enron was too busy committing fraud, so Kinder left and just built the business, and that's hugely valuable. So, Enron had some pipelines, and they did have some power plants, but nothing that would have returned the entire equity. Humorously, I did not realize this, but I found it while I was looking up EOG Resources, a giant, giant, $75 billion EV oil and gas company. You can go look them up. EOG stands for Enron Oil and Gas. They spun out of Enron 2 or 3 years before the bankruptcy, but it's hard to attribute a $75 billion EV company 25 years later, after it has done mergers along the way, entirely to Enron.

But I really couldn't think of anything else. A lot of the telecoms that go bankrupt have telecom infrastructure that is still valuable and still there, but it's such a unique case, and I've been thinking about it a lot recently.

Let's stick with SBF, Cursor, and Anthropic. Let's stick with that theme and go to my ongoing fascination with AI. If you've been following the blog or the podcast, you know I've been thinking a lot about AI. I go back and forth between my valley of despair and, "Oh my God, it's getting so fast." As I keep saying, everyone, you can't just think of AI as it is right now.

If you go to AI and ask, "How many R's are in strawberry?" and it tells you there's 8—and I think there are 3 in strawberry. I'm trying to picture the word in my head as I do this on the spot—but it tells you there's 8. Hey, guess what? AI is getting better and better. I have trouble believing that the AI five years from now is going to be failing the strawberry test, as we'll call it. I keep saying that I'm not just worried about AI as it is, even though it's getting so good. I'm worried about AI that's improving exponentially, and I think about 3 years from now: What's AI doing?

I will say that sometimes I have these valleys of being just concerned: "Hey, you know, the AI apocalypse—it's going to take all of our jobs." I'll have those worries. But I've been getting more and more hopeful recently, and there are 2 things.

One of my worries was that I'm not a coder. I don't know how to code. So, I've always been worried about Claude Code and all these skills and stuff. If you don't know how to code, are you going to get replaced by someone who knows how to code and can replace you in the job? They learn all the data and then, "Okay, thanks. See you later. I just coded you."

I'm getting a lot more comfortable with the question: Why do you need to learn to code to use AI? Why can't AI do the coding? And, you know, something like a co-worker or something. I do think a lot of AI interactions aren't going to be done by coding. I think they're going to be done by humans saying, "Hey, AI, here's my dream. Help me build it." That's kind of exciting, and that's made me excited.

That ties nicely into my next thing. Increasingly, I was worried that AI was going to kill us all. Or not kill us all—there are those scenarios, too. But I was worried AI was going to take our jobs or displace a lot of knowledge work. Increasingly, I just think AI is going to be a force multiplier.

In the same way, if you were the best singer in a European village in the 1500s, you could probably get a job as a singer. But in the 2000s, you have to be the best in the world, right? There are 10 people who can do that or something. Or you have to have other talents. You look at the big singers today: they're singers, they're dancers, they can do everything, right? You didn't need that if you were a singer in the 1500s trying to be the best in your little tiny village.

In a similar way, I do think that if you are really smart, really talented, really creative, and really hardworking, AI is going to be a force amplifier for that. All of us have egos, right? I like to think I'm really smart, really talented, really hardworking, and, by the way, really humble, really good-looking, all that type of stuff. But I increasingly think that, just because AI opens up so much of the world, if you've got vision and creativity, AI is really going to reward that.

I'll give small examples. All these videos are going viral. There was one a few weeks ago of somebody inserting himself—using AI—into a bunch of Game of Thrones scenes, like the most dramatic scenes. When Ned Stark in Season 1—spoiler—is about to get his head chopped off, he comes in and slaps Joffrey and saves Ned Stark. He does that in all the bad scenes in Game of Thrones.

That video goes crazy viral, right? He could never have created that video on his own as recently as 12 months ago. I think those types of videos, that type of creativity, are going to be really rewarded. That's one very small area, right? That's kind of meme media. But I think every business idea you have is going to be able to get started. Every way you can analyze data—I just think that, if you're creative, it's going to have huge rewards for you.

There is the worry of, "Hey, what if you are not in the top 1% of creativity? What if you're in the top 5%?" If you were in the top 5% in singing in the 1500s, I've argued, there was probably a job for you in some village, or maybe on a small traveling tour as a singer. If you're in the top 5% in singing today, there's nothing for you. You're not a singer, right? You have to be in the top 0.000001%.

It's interesting to think about everyone below the top 1%, but I kind of think there's just so much human creativity that everybody's going to be able to carve out a niche for themselves. I'm getting more bullish on that, and I think it's just really interesting, but I don't know.

The other thing I've been thinking about—and I don't know how any of what I said applies to investing. It just applies to life, and I think about life, too. The one thing I do have that applies to investing is that I read a lot of Substack. Obviously, I write a Substack. I read a lot of books.

You are seeing the rise of AI slop, right? I even created—I call it One Idea Per Day. You can go look at that Substack. That is just an AI-generated Substack, right? I only look at it if it hits my inbox and it's an idea I want to look at, or one I think is interesting and have never heard of before. You're seeing a lot of AI slop get written.

One worry you've heard people express is, "Hey, as more and more AI slop gets written, the AI gets trained on the AI slop, and it kind of brings everything down to the law of averages, right? AI slop can be mediocre and have a lot of hallucinations, and the law of averages brings everything down." One thing I have been thinking about is whether, in an AI world where everything is AI slop—and look, you could be a college student and write a pretty decent research report on any company in 30 minutes with AI, right? It'll be kind of basic.

An expert would look at it and say, "Hey, you know, I think you're repeating a lot of facts. This, this, and this is wrong." But a person would read it and be like, "This is really effing good." I've been wondering if, as the world gets more AI slop and everyone leans more and more on AI, there is a reward for being more of an expert in your field, right?

Everyone is kind of outsourcing their thinking and saying, "I use AI for this," and you have such deep subject expertise. You know all the nooks and crannies. Sometimes, when I see AI slop in something I know, I can immediately identify it.

And I wonder if there’s something to that. In sports, the Knicks just won the NBA Finals—go Knicks! One of the things, if you listen to experts, they’ll talk about how the Knicks are the best at challenges. So, a referee calls a foul on Karl-Anthony Towns, or KAT, and NBA teams have a limited number of challenges they can use.

People will talk about how the Knicks are the best challenge team in the league. They’ll point to places where the Knicks knew they would have won a challenge, but because you can only challenge 2 calls in total in an NBA game—1, and then, if you get that right, you get 1 more—and you’re limited by timeouts and things like that, the Knicks are the best team at passing on challenges they know they should have made. Or they’ll use their challenge and say, “Hey, if we don’t challenge here, we lose our challenge, so we might as well take a Hail Mary. Or this is a much bigger, high-leverage play.”

That’s the type of thing where, if we use my example, a foul is called on KAT in the first quarter—a meaningless play—or even on a lesser role player. AI might immediately say, “Challenge it. You will win. You’re 98% likely to win this challenge.” Whereas a subject-matter expert might say, “Hey, let’s move it from KAT to Jose Alvarado, who is a bench player for the Knicks. This is not your star player who’s going to determine the game. This is the first quarter. If you use this challenge, you’ll lose it.”

A subject-matter expert might be able to quickly process all that, whereas AI would just say, “You’re 98% likely to win.” That’s one weird sports example, but I’ve been thinking, as we get more AI—as the world gets more and more AI—maybe there is something to the guy who goes and locks himself in a room and reads and studies something really deeply. The world will present him with a lot of opportunities.

You know what? One more example I’ll point to. I don’t know if it’s going to work right or wrong. Full disclosure: I have a position in ABBVX, but listen to the podcast with Adam A that I did on ABBVX. ABBVX reports blowout efficacy results, but there are some safety signals in the drug that they report.

If you just fed that into AI, or if a lot of generalists looked at that and said, “Oh my God, this is a disaster. Black-box warning. Boom,” maybe Adam’s right and maybe Adam’s wrong—I don’t know. But Adam has subject-matter expertise and was instantly able to look at it and say, “Hey, look at the sample sizes. Look at the base rates. Look at the timing.”

That’s the type of thing where AI maybe gets there, because, again, we’re looking for where the puck’s going. AI is going to continue getting better, but it’s the type of thing I think computers and headlines might have missed, where a subject-matter expert could pick up on it.

Speaking of subject-matter expertise, one thing I’ve been thinking about with investing is that there was this report in the Financial Times on KPMG. KPMG humorously publishes a big report on AI use in business. I think they published it in October, but it just got picked up, and it turns out that a lot of it was hallucinated.

They point to a lot of big companies—I think Shell was one of them—and talk about how they’re using AI, and it’s completely hallucinated. That’s a funny story, and KPMG gets caught with its pants down. You hear lots of examples of this happening in law, too, where a lawyer submits a brief, and it turns out the brief was written by AI. AI hallucinated a lot of the citations, and that is no bueno for a lawyer.

But there was a line in the article—I’m trying to find exactly where it is. Here it is exactly: “Big consultancies such as KPMG and EY are viewed as highly credible. So, their reliance on false information increases the risk of second-hand hallucinations.”

I’ve been wondering, as we get more and more into this AI world, where a lot of things are written by AI and there’s a lot of AI information out there, what happens? There’s a lot of noise. You think about Twitter: you’ve got all these bots and things.

One of the reasons Elon Musk’s takeover of Twitter was—I don’t want to say bad or good; it just changed so much—was that anyone could buy the checkmark. Before, the checkmark was verification, and if you saw someone with a checkmark, you knew that was a verified source.

When anyone could buy the checkmark, you had all these things where people would change their name to Eli Lilly and tweet out, “We’re making all of our insulin free.” Because they had a checkmark next to their name, you thought that was Eli Lilly announcing it.

I’ve been wondering, as we get more and more into an AI world and people worry more and more about hallucinations, scams, and all this sort of stuff, how brands can cut through this. If you gave me a report and said, “Hey, Andrew Walker made it,” I’d be like, “Well, I don’t know who Andrew Walker is. I know who Andrew Walker is.”

So, you say someone else—Paul Walker, my friend Mason, whoever—and I don’t even mean my friend, because hopefully I can trust my friend. But if you say, “Here’s this consultancy report,” I don’t know how much I can lean on it, because I don’t know how much of it is AI-generated, and I don’t know the author’s background.

But if you give me a report and say, “Let’s just take KPMG. KPMG produced this report,” I’d say, “Oh, that’s a brand with a 100-year history and lots of smart people there. I’m sure they checked and double-checked that.” I would pay for this report. I can rely on this report.

I’ve been thinking more and more about whether there is value in these legacy brands, as the world goes more and more toward AI and continues the fragmentation that started with the big 3 media networks getting broken up by the cable bundle, and the cable bundle getting broken up by the infinite layer of the internet.

The best brand in the 1970s and 1980s—the best news brand—was, let’s just say, CBS News. That power has diminished as you’ve had all these competing brands, as CNN comes along, Fox News comes along, all the podcasts come along, and so on.

I do wonder if, in the world going forward, there is brand value, and if brands actually start sucking back up more equity: “Hey, this was reported by CBS News. I know what they’re saying actually happened here.” That sounds silly, but I wonder if you play out the AI world 3 years going forward, there’s value in that, people are willing to pay a premium for it, and other things come from that.

There’s nothing completely unique there. People have always said, “Hey, there’s power in the brands.” But I’m wondering if the power actually increases going forward in the AI world.

I’ll tell you this, and I also wonder how far you can apply that. Let me give you an example. CBS News might be a trusted source for news and that type of thing. KPMG might be a trusted source for consultancy, business data, or whatever it is.

People magazine: do you need a trusted source for celebrity gossip? I don’t know the answer to that. But if we got into a world where, as the world gets crazier, you hear crazy rumors about celebrities, could People magazine’s brand—and maybe a TMZ brand—actually get more valuable because people want to say, “Hey, if I hear Taylor Swift and Travis Kelce are having a baby, I want to know it’s true. I want to know what I can trust”?

Does that get more valuable? Does that have sources? Take it a step further: do ChatGPT and all those services start paying to have access? Already, you see lawsuits where people sue Google and say, “Hey, you should have paid for access.”

But do ChatGPT and services like it start paying to say, “Hey, if somebody asks ChatGPT something, we’ll pay people to let us report, ‘People magazine says X’”? I could see a world like that, because ChatGPT wants people to use it and wants people to trust its sources. I could see that world. I don’t know, but I’ve been thinking about the power of brands there.

Let me hard-cut. I was having dinner with a few investor friends last night, and I had a few things I wanted to talk about, but I’m rambling on for a long time, man. I always ramble on for a long time. I had thoughts on Polymarket, too, that I wanted to get to, but let’s stick with the dinner thought.

I got into a debate with a few people. One person said, “Hey, my edge is time horizon. I’m willing to look longer.” The me of 10 years ago probably would have said, “My edge is time horizon, too. I’m willing to buy, and the stock goes up and down, whatever. I’m willing to say, ‘I’m buying for 10, and I think the stock is worth 20, and I don’t care if it goes to 5 in the meantime. I can hold, and I will get that 20. My iron stomach, my ability, my diamond hands are the reason I can get out of it.’”

I’ve just come to view that as silly, to be honest with you. I’ll tell you why, because I’m rambling, so that’s my job: telling you why.

There are 2 ways you can say you have a time-horizon advantage. Way number 1 is to say, “Hey, all the pod bros are playing for the next quarter, or all the investment funds are playing on a 6-month to 1-year time horizon. I look further. If everyone is playing for 6 months or 1 year, I’m playing for things that work over 3 years. If everyone is playing over 3 years, I look over 5 years.”

I’ve just become incredibly skeptical of that argument. That’s literally saying, “Hey, I drag my Excel file over a column or 2.” The columns go 2025, 2026.

My competitors ended at 2027, and I go to 2028 and 2029. I'm really skeptical of that thing. You'll hear people say, “My edge is that everybody wants the catalyst in 6 months, but I look further out.” I've just gotten really skeptical of that. Maybe that's the case; maybe I'm being too cavalier, maybe I'm being too cute with it.

But I'm skeptical that there are so many smart people who are looking around, trying to outperform the market, and saying, “Look, if I could just buy stuff that would work over an 18-month time frame instead of a 12-month time frame, I could make reams of money, but I'm constrained by my boss, my employer, my investors, my fund, whatever it is. I just can't do that. It has to work in 12 months.” I'm really skeptical that you can just look a little further out and do that.

Again, I could be wrong. I could be wrong, but I'm very skeptical of that. The other way you could say, “I have a long time horizon and I have an edge from that,” is what I referred to earlier: I can buy at 10, and if it drops to 5, I will have diamond hands, and nobody else can. Because I can have diamond hands on the way down, I can buy stuff that's more volatile than my peers do.

This has some roots in Warren Buffett's “We'd rather buy a lumpy 15% return than a smooth 12%.” I understand the underlying thesis. I understand what they're saying, but I've never really heard someone say, “This stock is going to be volatile, but I think it's going to work really, really well, so I can't own it.”

I'm skeptical of this argument. If you've got great skill, why do you need the big drawdown? Why do you need to? I get it—you're willing to—but you're basically presupposing that this stock is going to go from 10 to 5. If that's the presupposition, why do you need to buy at 10 and go to 5? Couldn't you buy at 5? I don't know the answer. I understand that markets move up and down, but I've never talked to an investor who said, “I bought this at 10, it went to 5, and I had to get out of it at 5 for XYZ reasons.”

If you look over time, forced selling is a lot rarer than I think people think, but forced selling generally happens in the situation I love—and people know this if you listen to this podcast—where a drug trial fails. The stock goes from being valued at 10 billion, with a billion dollars of cash, and people are just getting out.

Some of that is rational, right? You want the tax loss and all that sort of stuff. Some of that is irrational, and I've talked to these people. It's not irrational because they're not there to play for, “Hey, the company's got a billion dollars of cash, it's trading at 750 million, we're going to get that cash.” They're there to play for literally the next cure for cancer. They're there to make binary bets. So they're kind of handing it off to more natural buyers.

That is forced selling. A lot of the forced selling, though, is dividend cuts. I don't see that big of a drawdown from dividend cuts unless it is a massive surprise these days. Index kicks—you don't see huge moves from index kicks.

By the way, if you're coming to me and saying, “My edge is that when a company I own cuts its dividend and the stock goes down, I can hold on to it,” well, companies that cut their dividend generally aren't doing great over there, right? My edge is that I can hold a company that gets kicked out of the index while I own it. Well, companies generally get kicked out of the index because the stock isn't working.

I just think the argument that I can hold when everyone else can sell, or I can diamond-hand this thing, is something I'm skeptical of. One of the reasons I'm skeptical is that a lot of the time—most of the time—when I hear someone say, “I have a longer time horizon, I can hold things that are volatile,” the unspoken part is, “I've underperformed for the past 3 years. I've underperformed for the past 5 years, but I'm convinced there's a pot of gold at the end of the rainbow.”

Investing is a bet-on-yourself game, right? You're saying, “I'm going to beat the market.” That's why I'm investing. And saying that I differentiate from the base rates—there is some arrogance there. There is this crazy thing where, when you underperform the market, you say, “The market's going to come around. I am skilled. I am special. It's going to come around to me.”

I can't tell you how many times I've seen a letter that says, “We've underperformed the market 7 years in a row. We are convinced the market's in a bubble. Our stocks are going to work, and we're just going to stick to it. We've got long-term edge. We've got diamond hands. We've got this long-term time horizon.” Seven years of underperformance is a long, long time. How much are you going to outperform in the 8th year to justify those 7 years?

I hear the argument: “We have a long-term time horizon. We'll take stuff lumpy.” But the subtext I generally see is, “We are underperforming. We think we're going to underperform. We're setting ourselves up so that if the market's racing and we don't, we can tell you what we're saying.”

I just don't know. Investing is hard. There's no easy answer. I'm not saying everybody needs to outperform the market every day, every minute, every second of the day. But there is something to asking, “Hey, if you underperformed, let's say, in a year, when is it time to look yourself in the mirror? Is it after 3 months, 6 months, a year, 2 years, 5 years? When is it time to look in the mirror and say, ‘What am I doing wrong? What is the market seeing that I'm missing?’”

I use this as a portfolio as a whole. I've created this 3-year rule, right? If I buy a stock and for 3 years it's done nothing, it's really time for me to look in the mirror and say, “Hey, is the market seeing something that I'm missing?”

Every now and then, it's caused me to miss a huge winner that would have just done great in year 4. But a lot of times, it's caused me to get out of stocks that would be flat for another 3 years or that have deteriorated even further.

I can't tell you how many times I've seen someone write up a company and say, “Hey, we made our investment. The investment didn't work last year, but all the factors are there.” Then I go back and read the letters, and they've been in this stock since 2019. They've been saying the whole time, “It's going to work, it's going to work, it's going to work.” Now we're in 2026. You can say I have a long time horizon, but it feels like that's a busted thesis and you're just not willing to admit it to yourself.

Okay, look, I've been rambling for 30 minutes. I've got great stuff. I really wanted to talk about the Polymarket situation. I'm sure a lot of you have seen this, but there was a Polymarket market where MicroStrategy sold Bitcoin on May 31st, I believe it was, and filed that in an 8-K on June 1st.

There was a student who bet a bunch of money on the Polymarket market, “Will MicroStrategy sell Bitcoin by May 31st?” He bet a lot on yes, and the market resolved no. Polymarket's rules are, “Hey, it has to be disclosed by the end of May 31st.” It wasn't disclosed.

I find that fascinating, and I get why Polymarket's doing it, right? You would hate to have a market resolve no, and then 20 years later, in my memoir, I say I had a Diet Dr. Pepper that day, and the market can switch to yes 20 years later. You do want markets to resolve in a timely manner.

That's what I would say about the MicroStrategy thing. Experts have pointed that out: It was disclosed the next day. If you understand how these rules work, they're not trying to be the pure arbiters of truth. You have to have disclosure. I understand it, because it was a few hours later and you say, “Oh, I got robbed.” But what if, instead of filing that on June 1st, MicroStrategy had filed it on August 15th when they reported earnings, 2½ months later? Could we have kept the market open for 2½ months?

I get that they're technical, but I do think these markets are having issues where they can be gamed, and they're dealing with areas where there is a lot of gray. Will the US-Iran war resolve? Was it resolved last week when Donald Trump tweeted out, “We're going to sign a memorandum on Friday”? Was it resolved on Friday when they signed the memorandum of understanding? Will it be resolved 30 days from now? I don't know.

These are gray areas, and they're not getting defined. Because the world evolves, even if you try to define things up front, a lot of times the way things play out won't be what you defined. I do wonder if that's a big issue for prediction markets over the long term.

The last thing I'll mention on prediction markets is that I don't think people realize how seriously people take them. I hear from people all the time, “Oh, Polymarket says 60%, and I trust Polymarket because Polymarket's been better at analyzing markets.”

What I think they mean is, people say, “Hey, if Polymarket is at 55%, it predicted the winner at 55%.” Remember, 55%, if these markets are really functioning, should mean there's a 45% chance—it's almost a coin flip—that the candidate loses.

And people are taking these things verbatim. If it's 50/50, they say it's a coin flip. The reason I mentioned all that is that a lot of these markets are very thin, and I keep thinking—I'm surprised. I think there are people doing it, but I'm surprised there's not more.

If you're running for office, you could go slam a Polymarket. You have Andrew Walker running for New York congressman. I could slam a Polymarket market with $5,000 worth of yes bets, and I would really drive my odds up. Then I could start emailing around and saying, “I am the Polymarket favorite for running for this office, right? You should support me.” Momentum can beget momentum, and I've seen these thin markets where someone jams it and they start getting some momentum.

I'm really surprised that you're not seeing Polymarket wars being waged, especially in these really thin markets, to shape the narrative. Or even in bigger elections—like when you go back to the 2024 election—people are talking about the Polymarket data all the time. It wasn't that big of a market. I kind of thought Elon Musk, instead of spending an incremental $5 million in Ohio or wherever it was, should have just gone and spent $5 million betting yes on Donald Trump, taking the market from 60 to 80 maybe 2 weeks before the election, demoralizing the opponents, right? Getting that last push.

Hey, if you were a swing donor, why would you donate to Kamala Harris? She's clearly going to lose. Look at Polymarket. Donate to Donald Trump, get in his good graces, get him to owe you a favor for putting him over the finish line when he's in office. I'm surprised by that.

Polymarket, and prediction markets generally, can be very, very reflexive with the real world, and that is scary. The ambiguity in how these things resolve, combined with the reflexivity of them impacting the world, is a pretty big risk to the business model, in my opinion. I don't know what the answer is, but it's something I've been thinking about.

The other thing I've been thinking is, if I was a 20-year-old, oh my God, I would have spent all day on Polymarket, just looking at these weird markets, making bets, and talking to my friends. It would have been $5 bets all the time, and every night we would have loved it.

Anyway, those are my ramblings. I've been rambling for over 30 minutes, which I think makes this my longest rambling, but these are my random ramblings for the month of June. We've got some more great podcasts coming up in the next couple of weeks, so looking forward to hearing you for the podcast. I'll be writing on the blog, so looking forward to talking to you on the blog, and I will see you in July.

A quick disclaimer: Nothing should be considered investment advice. Guests or the host may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor.