It’s not a lie if you believe it

Happy New Year!

Let’s never speak of 2022 again. 

Ok, now that that’s out of the way, the SECURE Act 2.0 is official, so I wrote about some of the key components of this legislation. Overall there’s nothing groundbreaking, but there are a handful of nudges in here that could once again explain why Richard Thaler’s work on “nudge theory” won him the only Nobel Prize handed out in the last two decades that didn’t address climate change.

Moving on, it’s that time of year, and three simple resolutions are meant to inject a little more happiness into life…


The chart below shows that diversification didn’t work last year. Unless you were heavily invested in select commodities, you’re still licking your wounds. 

There’s a case to be made that diversification is coming back. The bond market is starting to look like a bond market for the first time in 14 years, and this sea change could become a big deal for asset allocators. 

But I’m not holding my breath. As a hedge, I’m plowing what’s left of my money into three asset classes that have stood the test of time.

The first is timepieces. According to a recent article in Barron’s, Rolexes have returned more than real estate, the stock market, or gold over a 10-year period, from 2011 to 2021. 

The second is wine. The Liv-ex 1000 benchmark recorded a 13.6% increase through mid-December and a 44.6% rise over five years. 

The third is Congress. One of the most comprehensive congressional trading reports was just released, showing that D.C. is clearly overrun with hedge fund managers because these returns have been (1) massive and (2) consistent. So much that I’m now designating Congress as an asset class rather than a simple factor in a model. 

Here’s just a taste of how our fearless leaders in D.C. performed last year:

Note: The report did not include spouses and relatives, which is likely why Pelosi is bottom of the list.

Naysayers may push back. They’re probably thinking stuff like “past performance is not indicative of future results” and “there’s no autocorrelation in asset class returns.” 

They may be right, but if I’m going broke, I’m going down sipping a 1945 Romanée-Conti from a curly straw while glancing at my Paul Newman Daytona to see if I have enough time to visit Capital Trades before the market opens.

Corner the market

There’s always been something so alluring about cornering a market. This bug was planted in my ear way back when I was studying for the CFA exams. The story of the Hunt Brothers cornering the silver market read better than any Jack Reacher novel ever could. 

But I don’t have the money to corner a market that trades on a regulated exchange, so I’m going somewhere that (1) I can afford and (2)  steers clear of prison time. 

That’s right. I’m going after Non-Fungible Tokens (NFTs). Remember these? They were the screensavers being sold for 8-figures last year that are now trading for fractions of a penny on the dollar. And I want to own them all.

Because there’s an asymmetric payoff. I don’t need them to recover to all-time highs. I’ll take a few points and be happy. The flip side is that David Einhorn’s famous warning rears its ugly head. But even if that happens, who cares? I’ll lose a few grand? That’s a bad night out in NYC. Whatever.

Lie more

Let’s quickly recap what’s transpired over the last few weeks for Sam Bankman-Fried:

  • He finished his global media tour, denying knowing anything about what could be the biggest corporate fraud in history.
  • Days later, his top two lieutenants at FTX sold him out for a plea deal.
  • One day before testifying to Congress, he gets arrested and thrown in jail in the Bahamas (yes, they really do have a prison, and it’s bad).
  • His mom calls the warden and asks him to serve his son only vegan meals.
  • He agrees to extradition back to the U.S. to presumably get access to vegan meals and bail eligibility.
  • The judge sets bail at $250 million – the largest in the history of the U.S. – and he somehow makes bail despite only having $100,000 to his name (this is how he did it, and two of the cosigners were redacted to hide their identity).
  • He’s seen flying back to Palo Alto in business class a day later.
  • He answers the Call of The Millennial by moving back in with his parents.
  • This week, the world learned that his in-house counsel at FTX has been cooperating with U.S. authorities since November 22nd

And the absolute best part is that despite all this, he still entered a “not guilty” plea to the court this week! 

Some argue that he’s just being strategic to get a better deal down the road. Others view this as a way to avoid getting Epsteined because nobody wants to go out wearing a toe tag from Rikers. 

But I disagree with both for two reasons. First, this guy probably stole Cartel money, and if so, there won’t be any toe tag because those will almost certainly be the first appendages shoved into the wood chipper after the cartel realizes that their crypto is gone for good. Meaning, his odds of survival probably don’t change much in or out of jail.

Second, I think he thinks he is innocent, and that’s simply amazing. 

George Costanza taught us that “it’s not a lie if you believe it,” and while groundbreaking at the time, SBF has converted theory to fact. It’s no different than Einstein. It took decades for SBF to apply Costanza to a multi-billion dollar Ponzi, just like it took decades before computers were powerful enough to prove Einstein’s theory of relativity. 

If so, consider the ramifications. Lying to yourself could be the solution to all of life’s transgressions. There’s no need for Xanax or snorting horse tranquilizers anymore. All you have to do is pretend something didn’t happen, and then POOF! It’s gone!

That’s why I’m planning on lying a lot more this year, and not just to coworkers. I’m talking friends, family, and obviously strangers are all in my crosshairs. By doing so, I’ll be able to SHIFT+DELETE all the gut-wrenching mistakes I’ve made in the past and simultaneously watch any impending mistakes this year die on the vine.

In short, this is going to be the best year of my life. 

Enjoy the weekend, and if you don’t for some reason, try lying to yourself.