Author: Jeff Carter

Substack Blog`

This post is by Jeff Carter from Points and Figures

I have been intrigued by Substack ever since I heard about it.  I have blogged here on this WordPress sight for a long time. I have messed with creating content at Medium and LinkedIn.  Never saw the advantage to it.  A long time ago, I had a Tumblr blog and messed with that site too.

I started blogging at Substack here:

So far, the WordPress platform is a bit easier to blog on.  Maybe it’s because I am used to it.  I think that the email subscriber part of Substack is significantly better than WordPress.

I don’t know if I will ever charge for content or not.   I have friends like Brian Lund that do.  It’s obvious writers that had followings like Bari Weiss and Glenn Greenwald are making a lot of money on Substack via paid subscribers.  Alex Berenson recently started writing there too.

I do know that I am suspicious of all social media companies.  It’s obvious Twitter, Facebook, YouTube etc are focusing on advancing an agenda that I do not subscribe to in any way shape, or form.  Parler was shut down by collusion between Big Tech and the Federal government which ought to give any freedom-loving person pause.  I have an account at Parler, Gab, MeWe, and Codias.  But, Parler before the forced shutdown was decent.  After, not so much.  Twitter is a left-wing echo chamber being D +60, but the ones I just mentioned are different kinds of echo chambers.

Access to free and (Read more...)

Leading From Fear

This post is by Jeff Carter from Points and Figures

Worth dissecting where we are with Covid.  Instead of watching the television, or listening to blowhard politicians, it is best to look at data and statistics.  Unfortunately, most people do not understand stats.  Most of the stats you see in the news are manipulated in some way to drive an opinion.

People use fear to whip and drive people. They use fear to control them. One of the things I learned trading is if I traded from a place of fear, I made bad decisions. As I invested in startups, I saw CEOs wrestle with fear. The ones that handled it did better than the ones that were controlled by it.

Fear is a powerful emotion because of the chemicals that are released into the body. We are genetically ingrained for flight or fight. Animals are too. I see a lot of wild animals up here in Northern Minnesota all summer long and all of them choose flight when you happen upon them. I have seen wolves, bears, moose, deer, fox, and coyotes. All have run rather than face me. Flight is a lot easier than fight.

Same goes for humans. It’s easier to accept all the bullshit that comes down than fight it.

Check this out:

Covid is just not as serious as the politicians are making it out to be. They have another goal. Increase their power. Political entities love power. The Founders recognized that and enshrined people’s rights into the Constitution. It’s worth pointing out the Constitution (Read more...)

America Needs Transparency

This post is by Jeff Carter from Points and Figures

I have resisted all the chatter about the mental and cognitive abilities of President Joe Biden. I have read where he is senile, has dementia, or some other malady.  I have seen doctors who haven’t examined him weigh in and I have discounted it all.   I remember early in the Trump Administration where left-wingers wanted to enact the 25th Amendment and said Trump was mentally compromised. Congresspeople like Adam Schiff even encouraged the talk in his quest to undermine the President.

It seems every day, Biden puts an end to his Presidential activities very early.  It’s not to play golf either.  Obama and Trump both played a lot of golf but it was on weekends.  Biden goes to nap or rest or do whatever he does.

One thing I will compare and contrast is this.  A few years ago I attended a Chicago Economic Club dinner featuring ex-President Barack Obama.  I was not, and am not politically aligned with Obama and think he is one of the worst Presidents the country has ever had.  He had a friendly audience in Chicago along with friendly questions.

One thing that he said struck me.  I think it is true no matter who is President, and whether you are politically aligned with the President or not.  It’s true if you like the President, identify with the President, or abhor (Read more...)

Learning From Mistakes, And People

This post is by Jeff Carter from Points and Figures

Aaron announced this today on Twitter so I guess it is okay to blog about it. I was an early investor in Riskalyze. As I was trying to build my street cred as a solo investor, I built a syndicate for Riskalyze and we invested. It paid off.

The whole story isn’t so simple. I met Aaron in NYC at Fred Wilson’s beer blast. It was Fred’s 10th anniversary party of his blog, and he invited some people who interacted with his blog. I met Andy Swan there, who became a Riskalyze board member. I met Donna Brewington White there, who became a talent agent for Riskalyze. I met Arnold Waldstein there who also invested. RIP Arnie, I know you are smiling.  Arnie and I didn’t agree on politics, but we agreed on Riskalyze and Aaron.

For some background, I took Professor Scott Meadow’s class at Chicago Booth on PE/VC. When he teaches that class, he tells a story about passing on Starbucks not once, but twice.  He passed because of valuation, and because he wasn’t getting preferred.  I always remembered the Starbucks story.  It didn’t hit home because of the lost opportunity.  It hit home because in investing, you have to be objective on each (Read more...)

The Last Investment

This post is by Jeff Carter from Points and Figures

The little seed fund we started back in November of 2016 has reached the end of its investment period.  We just closed our last investment.  The fund is closed to any new investments and we aren’t raising another fund. So far, we have had some nice markups on companies we invested in.  The total fund is doing well, but it will be a few years before we realize cash on cash exits.

This week, we invested in MLTech.  We met them through the Chicago Booth New Venture Challenge.  They placed in the Top 10.  This was a convertible debt seed round.  ML is hiring.  This is a tremendous opportunity for an engineer to hop on a great company in the most innovative space going right now, crypto.

We are excited to work with Leo, Markus, Ying, and the rest of the team.  We are really looking forward to being with them on this ride.  Prior to our investment, they had put together a strong cadre of angels in their round.  The team has extensive experience in the hedge fund or trading industry and will put it to use for ML.  Many of the angels are from the trading industry too.  When we chatted with our LPs about this investment, a lot of them were super enthused about it since they are actively trading crypto today.  This investment fits our thesis and was a fat pitch down the middle.

MLTech is a B2B FinTech platform for researchers to (Read more...)

Learning New Things

This post is by Jeff Carter from Points and Figures

Everyone tells you to be a lifelong learner.  Few of us really do it.  We fall into habits, reject new information and bray against new processes because it disrupts our habits and confirmation biases.  “That’s the way we always have done it.”  Common refrain.  Another one, “My mind is made up, don’t confuse me with facts.”

In the summer, I spend my time in the Boundary Waters Canoe Area (BWCA).  I am in the middle of nature all summer.  The past two days I have seen two different black bears driving down the road.  One was what we call an “H” bear, for huge.  One was an “M” bear for medium.   We were fishing the other night and my daughter spotted a wolf pup padding along the shore.  (see photo above) This is wilderness.

Since we rehabbed the cabin, I have internet, electricity, and reliable running water.  I can conduct business up here and do anything I need to do, except meet people in person.

As I am typing this, I am watching the hummingbirds feed at our feeders. They are trying to fatten up for the trip south.  You can tell the seasons are changing because the birds are a lot more active at all of our feeders.

Where I live during the summer is totally out of my comfort zone.  It’s rural.  Grand Marais is a town of 1100 people.  I have to do a lot with my hands and there is a lot of manual labor.  (Read more...)

The Bull Is Broken

This post is by Jeff Carter from Points and Figures

Over the last five to seven years, I consistently have seen articles talking about the end of the bull stock market.  My favorite Permabull is Tim Knight of Slope of Hope.  The stock market has continuously hit new highs.  The Federal Reserve’s easy money policy has really propelled it.

Over the course of years since 2009 when quantitative easing forever started happening, the market has rallied.  It took awhile, but risk preferences changed.  People abandoned “safe” assets for riskier ones.  One anecdotal piece of evidence is the percentage change in startup valuations.  They are up by large percentages as new money has filtered into all stages of the space seeking returns.

I have watched it and tried to keep my confirmation bias out of it.

In April of 2020, my wife woke up nervous and wanted to sell.  We sold some stock.  I reinvested after the market kept going up.

However, today is the first day I ever took a look around, put my finger in the air and thought, the bull is broken.

Why?  More importantly, why don’t I think there is anything the Fed can do about it?  Permabears have hated the Federal Reserve since at least 1997 when the Fed seemingly propped up the tech sector.  The “Greenspan Put” is not a colloquialism for nothing.

  1.  Ramp up of Federal Spending.  We always spent way too much, but what they are doing and have done since Covid is unprecedented and stupid.  It’s irresponsible.
  2.  Covid policy.  It’s not (Read more...)

The Winners Write History

This post is by Jeff Carter from Points and Figures

I remember after 9/11, there was a fervor across America to make the bad guys pay.  It took until 2003, but President Bush was going to make the bad guys pay.  The bad guys were in Afghanistan and Iraq.  Remember the hearings at the UN?  Hans Blick said there were no weapons of mass destruction.  Colin Powell said there were.

Those hearings turned Powell into a Democrat.

Turns out, there were WMD in Iraq and they spirited them out of the country before we got there.  In early battles, we decimated the Iraq army, and decimated the Taliban.  From all news reports, we were “winning”.

Then came an election and Bush put up the banner, “Mission Accomplished”.  That was the tell.  No one knew the mission.  When you don’t know the mission, you can’t win.  They tried to articulate the mission, but even when they said exactly what it was the fighting on the ground said otherwise.

The war was terribly politicized at home.  Every day and week, mainstream media slanted their coverage.

I remember thinking back then that Bush will go down as the President that remade the Middle East, or go down as one of the biggest goats in history-and that doesn’t mean greatest of all time.  Bush didn’t remake any of the Middle East countries formerly trapped by radical Islam to be a peaceful loving democratic republic.

Obama didn’t do much more.  He extended the war.  He was always an uncomfortable war president having no knowledge of (Read more...)

Pulling The Football Away

This post is by Jeff Carter from Points and Figures

For the younger crowd that might read this, they might not understand “pulling the football away” so here is where that phrase comes from.

The US Treasury, the Biden Administration, and the Congress (Democratic-led don’t forget) just played Lucy to the cryptocurrency industry.

Fred Wilson opined how happy he was with the progress of crypto regulation talks the other day.  Fred didn’t realize the sausage wasn’t made yet.  What Democrats like Fred don’t see is that regulation isn’t used to make an industry better or more efficient.  It’s used to eliminate competitors, and most importantly to increase government power.

I recall doing legislation when I was on the CME Board.  Congress snuck in a transaction tax that had to be eliminated literally in the last minute before it was passed back in 2000.

a16z, a huge VC fund, put out a fact sheet on the legislation.  This was good only because 99% of Congress has no idea what crypto even is.  Instead, all branches of government pattern matched and tried to force crypto into a corner it doesn’t belong in.

Republican Senator Ted Cruz had it right.  Do nothing.  Let it breathe.  The Lummis/Wyden/Toomey bill was the compromise bill that should have been passed in the pork-filled infrastructure bill, which is a bad bill anyway.

The US Treasury was having none of that, and neither was Biden.  They want more tax dollars wherever they can find them.  The damage might be able to be fixed, but lines in the (Read more...)

Pure Political Power Versus Safety

This post is by Jeff Carter from Points and Figures

As the bloated infrastructure bill makes its way through the US Senate, a donnybrook has ignited about regulation on cryptocurrency.  The initial bill had an amendment that was agreed on by everyone, or so the world thought.  Then uber-Washington Machine politician Democratic Senator Mark Warner of Virginia, and retiring Machine politician Republican Rob Portman threw a wrench into it.  Democratic Senator Kristin Sinema of Arizona also joined in sponsoring the amendment.  The White House and US Treasury signed on to the Warner Amendment.

The competing amendment sponsored by uber-liberal Democratic Senator Ron Wyden of Oregon, RINO Pat Toomey, and Republican (Trumpish) Senator Cynthia Loomis of Wyoming is the one the crypto industry would like to see passed.

Lost in the noise, Republican Senator Ted Cruz of Texas offered up the idea that the US shouldn’t regulate crypto at all. Cruz is probably right if you want to see competition and innovation pick winners and losers in the crypto industry.  Unfortunately, once a pen has been put to paper by a government bureaucrat, there is no shortage of paper or ink.  They are often ideological and driven by their pursuit to control outcomes rather than for the good of the people.  I fought a transaction tax on trading for years and they are still fighting it.

I have some experience with government regulation as it pertains to commodity markets.  I was a part of the CME Board when we engaged in the CFMA in 2000.  At the time, OTC derivatives didn’t have (Read more...)