(PDF) Experimental evolution of bet hedging

bet-hedging strategy evolution

bet-hedging strategy evolution - win

Environmental variability and the evolution of bet hedging strategies

Environmental variability and the evolution of bet hedging strategies submitted by sburgess86 to BiologyPreprints [link] [comments]

Bet-hedging across generations can affect the evolution of variance-sensitive strategies within generations

Bet-hedging across generations can affect the evolution of variance-sensitive strategies within generations submitted by sburgess86 to BiologyPreprints [link] [comments]

What $GME has taught me in 36 hours of day trading

Jumped on the $GME bandwagon on Friday, 4 @ ~316. My 36 hours of day trading has already taught me that no matter how this plays out, I will never YOLO on a bubble ever again.
The principle seemed straightforward: hedge funds got lazy/greedy, over-shorted their positions, bet against a company that wasn't actually going under, and some astute monkies on reddit caught them and triggered a short squeeze. Even as someone who knows almost nothing about the stock market, the basic premise makes sense. But the devil's in the details, and hype is blinding.
First red flag was when I realized DeepFuckingValue did not bet on the short squeeze, he bet on undervalued stock price over a year ago. He has also trimmed his position such that no matter what happens in the squeeze, he walks away with 8 figures. So the people screaming "if he's still in, I'm still in!" and "look at those brass balls, if he can lose $5MM in a day then I can hold" are really living up to the dumb ape meme. He didn't lose $5MM yesterday, he lost $5MM in *unrealized gains*, there is a *huge* difference.
Second red flag was a common sense idea that hedge funds won't go down without a fight, and they have literally billions of dollars and decades of experience. You don't get that without learning how to game the system in complex, subtle ways. So even if they are still heavily shorted (which they might not even be anymore), and even if somehow WSB is holding some kind of meaningful leverage over them, that doesn't rule out the very real possibility they have a dozen ways out of this that people like me have no idea about.
But even in the off chance that somehow this turns around, and $GME does go "to the moon," that doesn't change the fact that it's bad long-term strategy to bet on bubbles and jump on bandwagons. They almost certainly fail, and if they don't, they only serve to inflate egos that will fall even harder on the next gamble. I'm still holding my shares but I don't expect to see my ~$1200 ever again. In the off chance I break even or see a profit here, I will count it as dumb luck and use it as seed money to learn how to invest in real long term gains.
Edit: holy shit RIP my inbox. No way I can read all that.
Want to clarify a few things. Not financial advice.
My position: I knew I was late to the party. I wanted to gamble. I knew what I was doing, and (mostly) why I did it. Hindsight showed me it was more based on emotion than I wanted to admit, but still, I'm not surprised by the outcome so far, and I'm totally OK with taking the L and calling it a lesson learned. I don't blame DFV, WSB, or anyone for my choices. I own them, even proudly, because I wanted to step out and take a calculated risk vs. sit on the sidelines out of fear of loss. I'm holding because I already bought my tickets to this ride, want to see this thing play out, and I'm fine with gambling the final $300 on the outside chance things turn around.
Your positions: brothers, sisters, nonbinary siblings: you are not your portfolio. whether up or down, your value is not based on how big or small an imaginary number is. you are a human being on the bleeding edge of 3.5 BILLION years of evolution, you have more actual success in your past and potential success in your future than you'll ever know. 12 years ago I was a penniless alcoholic literally stealing change from my grandpa to get loaded on 211 Steel Reserve. I hit my bottom, joined AA, and now I'm a network engineer, wife, kids, the whole lot. Anything is possible if you don't give up on yourself. But I know it's not that easy, we all need borrowed self-esteem before we can see the real value inside. So if this $GME gamble hit you hard, please reach out to someone. don't give up. Hell, this bubble isn't even over, it might even turn around! But either way, don't give up.
Edit2:
wow, never expected this to go this far. wrote it on my way out the door as a way to cope with the situation. read a ton of replies, probably missed most of them. thanks for all the love and hate and everything inbetween! A few more points:
Edit3 2/3/21:
Full disclosure, I closed my position this morning at a ~$900 realized loss.
My gut says the squeeze happened, short interest isn't what I thought it was on Friday, and the stock will return to actual value soon.
submitted by austindcc to stocks [link] [comments]

Trading/Investing Reading List

Received some PMs requesting the book list I recommended from ages ago. Full list is below
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Mathematics/statistics of games, gambling, and sports
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Developing a cognitive edge and avoiding decision-making errors: perception, intuition, judgment, pattern recognition, how experts become experts
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Incentives of Management and People Generally
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Patterns of industry and company change/evolution
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How to identify great companies, competitive advantage, and great managements
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Bottom fishing/distress/special situations
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Case studies of corporate/investing/personal failure
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Forensic accounting and understanding the numbers
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How to analyze countries and economies
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How to read people and situations between the lines
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Meditation/yoga
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Markets and crowd behavior
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Short Selling
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Biographies of great investors and value-creating CEO's/founders
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Surveys of various investment styles/philosophies
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Financial history/commentary/anecdotes
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Psychology of Investing and Trading
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How to structure and interpret information/data
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Value Investing and Valuation
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Understanding price and volume action
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Books from other disciplines which provide thought-provoking models/metaphors for investing/business
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Some good books for understanding specific industries
submitted by miracl_e to thewallstreet [link] [comments]

School Report, Banking vs Crypto.

What are your thoughts? Wall of text incoming. Had to write a paper with a annotated sources.
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In recent years research suggests that the current iteration of banking is stuck in history, it is unsanitary, and perhaps unwilling to evolve and is slowing the modernization of our world. Banking as we know it will either need to adapt or others will take its place because, in today’s society, we need the ability to access our funds at any time, be able to complete transactions within minutes and not days, and to make global transfers within minutes and not weeks while ensuring the exchange is hygienically plague free.
With recent worldwide events, we have found that the banks are not able to fully service their customer because of governmental and environmental sanctions from the Corona Virus and other contaminations that may come about. We look to the future for solutions on how to hold and spend currencies without the requirement of the proximity of fiat changing hands, or third-party establishments providing a service while taking unnecessary cuts from our wallets. Banks let archaic computer systems run our financial communities with very little effort in maintaining the business, almost making a passive income. Some believe the solution is already here, though still in its infancy, blockchain will free us of many of these third-party providers.
To understand what blockchain is, you must first define it. Blockchain is still a relatively new technology and being innovated at a rapid pace. According to Steven Norton from the wall street journal “a blockchain is a data structure that makes it possible to create a digital ledger of transactions and share it among a distributed network of computers. It uses cryptography to allow each participant on the network to manipulate the ledger securely without the need for a central authority.” (Norton, 2016)
A ledger of transactions that is open for the world to see, yet one of the most secure networks in the world with a singular chain known as Bitcoin using a top of 146 million tera-hashes at the current time this paper was written. This is one of a hundred underlying platforms that are available to the world through blockchain.
This is important because of how it is used for business. From the book Blockchain for Business“Blockchain matters because no business operates in isolation. By implementing business processes that leverage the collective knowledge of the group, processes can be orders of magnitude more cost-efficient.” ( (ARUN, 2019))
To simplify what was said this means that no longer will a core group of individuals control how you bank, what your business can or cannot access. It will open doors that were closed to you because of simple choices that were made in the past and over complex regulations and rules.
For example, with the legalization of marijuana in some states, while federally it is still against the law. This provides complexities to banks, do they serve the customer, and the customers cash, or do they serve the federal government that holds the chains and regulations. At this time majority of the Banks still serve the slow to adopt federal government.
For example, according to CNBC, in 2014, SinglePoint, a mobile app payment company, had placed Point of Sale or POS terminals in legal Medical Marijuana dispensaries. Which then the consumer could pay with their credit cards.
“Everything was going great,” the store owner Ralston said. Then the bank decided to shut them down, with no warning, no latitude, or space for business adaptation. The reason the bank cited for such a drastic and uncompromising decision. “They didn’t want to risk it.” (Criteo, 2017)
With the examples of how and why the Banks are losing faith with people of the world this is where Blockchain will come in. It will step in and provide where the current Banking system refuses to.
According to Banking Dive, with Covid-19, our population is currently getting comfortable with doing everything remotely, digitally, with no requirement of the bank branches. "I think everything that's happened over (since February) or so is probably accelerating a trend that’s already happening, which is the reliance on traditional bank branches will continue to go away," Chime CEO Chris Britt (Criteo, 2020)
The Balance lists off many benefits to cryptocurrency that could change or replace banks, such as immutability. For example, if you are selling your used car, you want to get paid before handing over the car. The real current options are cash, wire transfers, or a cashier’s check. However, cash is dangerous and dirty, Wire transfers are labor-intensive, and cashier’s checks can be faked and can cost money to get. Instead, we could wait for a few block verifications to verify the sender and at that point there is no way for them to recall that transaction. (Pritchard, 2020)
A list of other options that the blockchain excels at while banking is slow and expensive is Money Transfers, Swipe Fees, Title Details, Smart Contracts, Reduced Fraud, and the possibility of Public Ledgers that anyone can look at and verify if they have your wallet address.
Banking is a well-defined tradition of being slow to adapt to technology due to many different reasons. Such as: non-agile systems, the mindset of their leaders, as well as regulatory concerns. With the rapid development of technology, they have leaps and bounds to catch up. If they do not they will be left in the dust with many old “unstoppable” industries such as movie rentals, like Blockbuster.
Many new companies are ready to take their place, according to a paper at CNN, "We believe that Bitcoin has the potential to be a more ubiquitous currency in the future," Square's Chief Financial Officer, Amrita Ahuja, said in a statement. "As it grows in adoption, we intend to learn and participate in a disciplined way." (Effron, 2020)
Many companies are buying up this blockchain as a store of currency instead of leaving it in a bank for rainy days. For example, Square invested in almost 1 percent of the company’s assets in the second quarter of 2020. Which at that time went by 4,709 Bitcoins, or a price of 50 million dollars. At that time Bitcoin was worth around 8 Thousand dollars each. Today it is worth 27 Thousand Dollars per coin, tripling that bet if they have not bought anymore.
Not only wanting to hold Bitcoin, in 2018 Square expanded its Cash App to support the top cryptocurrencies, even for users without bank accounts. After the success of Cash App, it launched Square Crypto to help develop the space. (Effron, 2020))
JPMorgan believes “That more will come into the space now that the dam has been broken. With Square’s Cash App facilitating $858 Million worth of Bitcoin Purchases in Q2. We believe that millennials, or the younger cohorts of the US retail investors universe, have been using the Cash App as an alternative vehicle to the Grayscale Bitcoin Trust to add to their bitcoin holdings," said JPMorgan strategists. (Khatri 2020)
Since these opening plays, a few well-known companies have heavily dived down the Bitcoin hole. Such as: GrayScale, PayPal, MicroStrategy. Others who now will accept it such as Microsoft, Overstock, Home Depot, Starbucks, Whole Foods, New Egg. (Tuwiner, 2020)Even as everyday useable credit cards from Crypto.com and Binance.
Our currencies have gone through a few changes already, from being a gold-backed standard and then leaving it on April 20, 1933. (Richardson 2013) We have gone from Cash to Checks, to Debit and Credit cards. The new iteration of financial freedom is upon us. Allowing us greater freedoms to be our money, getting paid directly to hardware and software that we own and control, and connect with people around the world. This gives us the choice. The choice of trusting third party institutions such as Square, PayPal, and GrayScale if we desire. To make available these services on a global scale, not just those that are lucky enough to live in the first world, but anyone that has a phone/computer, power, and some sort of internet, even if it is not connected immediately. This allows us the ability to send unlimited amounts of money throughout the world for a few dollars and a few minutes. Giving us more of what is the most precious asset, time.
Sources:
Norton, S. (2016, February 02). CIO Explainer: What Is Blockchain? https://blogs.wsj.com/cio/2016/02/02/cio-explainer-what-is-blockchain/
This article is a great primer on what is blockchain, how it is used, and what its future components will be used for. “A blockchain is a data structure that makes it possible to create a digital ledger of transactions and share it among a distributed network of computers. It uses cryptography to allow each participant on the network to manipulate the ledger securely without the need for a central authority.” With several startups and industry groups working on multiple levels of blockchain, life-changing solutions will be forthcoming. Steven was the CIO for the Wall Street Journal, a prestigious source that many uses for financial guidance. I will be using this article as a primer on what blockchain is.
Arun, J. S., Cuomo, G., Gaur, N., & Tapscott, D. (2019). Blockchain for business. Boston, Massachusetts: Addison-Wesley.
This book is about bringing blockchain and businesses closer together, whether it's for financial remittance, inventory, and supply chain tracking. It describes various real-world examples, implementation, and industry-specific as well as cross-industry cases. While bringing into clarity and magnification of opportunity that may be present in your organizations. With this source, we have Cuomo, Gaur, and Tapscott, all high ranking individuals within IBM, Gaur is currently the Director of digital research inside IBM. I will be using this source to start outlining how the business and the individual could get away with becoming their own bank.
Pritchard, J. (2020, April 23). Here's How Blockchain Will Transform Banking and Financial Services. https://www.thebalance.com/how-blockchain-is-changing-banking-and-financial-services-4174354
This paper starts to address how blockchain is specifically changing banks, being immutable, public transactions. How one can do financial transactions from money transfers across the globe with minimal financial fees and instantaneous transaction and remittance with low cost private and public ledgers. Justin Pritchard is a Certified Financial Planner and normally covers banking and loans, in his experience, he has covered the financial sector for two decades. I will be using this paper multiple times as it heads many points of my thesis whether it be direct payments, money transfers, and other thoughts
Kozyra, K. (2020, May 18). 10 Use Cases of Blockchain in Banking (1061520692 809060717 K. Shah, Ed.). https://concisesoftware.com/10-use-cases-of-blockchain-in-banking/
Another paper on the use cases of blockchain in banking, quoting faster payments, clearance and settlement systems, and a transfer of assets. It also talks about how the blockchain can help clear up erroneous errors of credit and loans while keeping your information secure. Khadija is a strategic investment and funding expert. Also a teacher for finance in top universities. I will be using this for ideas on how the banks could adapt and continue to be a service that many use.
Effron, O. (2020, October 08). Square just bought $50 million in bitcoin. https://www.cnn.com/2020/10/08/business/square-bitcoin-crypto-investment/index.html
This paper outlines the growing adoption of cryptocurrency. Proving that it is no longer taboo and used for people to purchase things that they would rather stay private. That the blockchain is a great hedge against the current inflation of the dollar. CNN is a place where many people get their daily consumption of news. I will be using this to prove that many other financial services and sectors are willing to take on the bank's role in life. This is the first mover to take on this responsibility.
Khatri, Y. (2020, October 14). JPMorgan believes more payment companies will enable bitcoin purchases similar to Square's Cash App. https://www.theblockcrypto.com/post/80838/jpmorgan-payment-companies-bitcoin-square-cash-app
This paper outlines how JPMorgan believes that now bigger businesses will welcome bitcoin as a treasury and remittance that square started the ball rolling, that PayPal Venmo, grayscale, and quite a few other large companies are putting a small percentage of their cash into Cryptocurrencies and blockchains, removing them from the banks and other standard places of securing money. Yagita is a financial writer with experience in the financial sector, including the Economic Times, Reuters, New York Times, CNBC, and MIT. I will be using this to quote JPMorgans expectation for this space to fill quickly, and that the banks must start moving to stay relevant.
McWhinney, J. (2020, September 16). Can Bitcoin Kill Central Banks? https://www.investopedia.com/articles/investing/050715/can-bitcoin-kill-central-banks.asp
This paper directly addresses the thought of what I want to write about, is it possible that Cryptocurrency replace central banking and what hurdles would need to be overcame to make this a viable option. McWhinney writes on many Financial items for a few different websites. This paper directly supports and helps outline what I want my paper to be about.
Richardson, G. (2013, November 22). Roosevelt's Gold Program. https://www.federalreservehistory.org/essays/roosevelts-gold-program
This paper talks about a huge paradigm shift, when we went from the gold backed dollar to a financial institution with nothing backing the dollar except peoples words. Following the transition and laying the possible groundwork of what can come. This website is currently hosted on Federal Reserve History, documenting the progression and path of our economy.
Criteo, D. (2017, December 15). Bitcoin offers the cannabis industry an alternative to banks. Retrieved December 30, 2020, from https://www.cnbc.com/2017/12/15/bitcoin-offers-the-cannabis-industry-an-alternative-to-banks.html
This article talks about how a blurred line between state legislation and federal legislation is making it difficult for
This article talks about how a blurred line between state legislation and federal legislation is making it difficult for legal companies to complete business transactions through current banking infrastructure. How business can turn to cryptocurrencies to hold their cash in a safe manor. CNBC is often a trusted and respected source of information.
Tuwiner, J. (2020). Who Accepts Bitcoin? 11 Major Companies. Retrieved December 30, 2020, from https://www.buybitcoinworldwide.com/who-accepts-bitcoin/
This list is a quick list of many companies that is currently accepting cryptocurrency, Bitcoin, as legal tender. Direct from user to company or a third-party administrator if that infrastructure is not built yet. Buy Bitcoin World Wide is a moderate source of information that focuses on the cryptocurrency world.
Criteo, D. (2020, November 30). How COVID-19 is driving consumers and banks to embrace digital technology. Retrieved December 30, 2020, from https://www.bankingdive.com/spons/how-covid-19-is-driving-consumers-and-banks-to-embrace-digital-technology/589447/
This article focuses on how with the current pandemic, people are getting use to never seeing their money, or interacting with banking personal. In essence giving the bank their money, with out using a majority of the services offered by the bank, leading us to the next evolution. The writer writes on many financial and cryptocurrency events in the States.
submitted by wdy43di to CryptoCurrency [link] [comments]

Q1 2020 Letters & Reports

Investment Firm Date Posted
A Primer on Reading Annual Reports April 7
Absolute Return Partners April 7
Bankruptcy Law Primer April 7
Berkshire Hathaway Annual Report April 7
Crescat Capital - Blood in the Streets April 7
Fundsmith April 7
Glasshouse Research - Cubic Corp April 7
Grants - Grand Tour of Junk April 7
Hindenburg Research - HF Foods April 7
Horizon Kinetics - March 20 April 7
Horizon Kinetics - March 25 April 7
Howard Marks Memo - March 3 April 7
Howard Marks Memo - March 19 April 7
Howard Marks Memo - March 31 April 7
J Capital - GDS Holdings April 7
James Montier - Fear and Psychology of Bear Markets April 7
Jamie Dimon April 7
JDP Capital April 7
JPMorgan - Guide to the Markets April 7
Oaktree Capital - Assessing Relative Credit April 7
Oaktree Capital - Risks and Opportunities in EM April 7
O'Shaughnessey Asset Management April 7
Pershing Square Capital - Annual Letter April 7
Pershing Square Capital - CDS Trade April 7
Sequoia Fund April 7
Spruce Point Capital - WD-40 April 7
Wedgewood Partners April 7
Wolfpack Research - IQIYI April 7
Akre Focus Fund April 8
Alliance Bernstein Long Cap April 8
Bill Nygren Commentary April 8
Howard Marks Memo - April 7 April 8
Vltava Fund April 8
Vulcan Value Partners April 8
Bluehawk Investors April 9
Boston Omaha April 9
Driehaus Life Sciences April 9
Riverpark Floating CMBS April 9
Riverpark Large Growth April 9
Riverpark Long Short Opportunity April 9
Schiehallion Fund April 9
Thornburg Global Opportunities April 9
Brown Advisory April 10
GMO White Paper April 10
Mawer April 10
Newfound Research April 10
Templeton and Phillips April 10
Universa Investments April 10
FPA Crescent Fund Transcript April 11
Third Avenue Value Fund April 11
Desert Lion Capital April 12
Massif Capital April 12
Muddy Waters - eHealth April 12
Turtle Creek April 12
UBS 2020 Real Estate Report April 12
Crescat Capital April 15
Howard Marks Memo - April 14 April 15
Longleaf Partners April 15
Madison Investors Fund April 15
Pabrai Funds April 15
St. James Investment Company April 15
Antipodes April 17
Artisan Mid Cap April 17
Baron Funds April 17
Cooper Investors April 17
David Herro April 17
Ensemble Fund April 17
Jeff Bezos Annual Letter April 17
KKR Global Macro Insights April 17
Robotti April 17
Summer Value Partners April 17
Third Point Capital April 17
Tweedy Browne April 17
Whitebrook Capital April 17
Harding Loevner April 18
Kuleana Capital April 18
Mairs & Power April 18
McKinsey - The Future of Travel April 18
RPIA April 18
Silver Ring Partners April 18
Third Point Capital April 18
Upslope Capital April 18
Rhizome Partners April 20
White Crane Capital April 20
Canterbury Tollgate April 21
Elliot Management - Perspectives April 21
O'Shaughnessy Asset Management April 21
Baron Funds April 21
Diamond Hill April 23
Evermore Global Value April 23
Giverny Capital April 23
Kerrisdale Capital - Short Thesis on Mirati Therapeutics April 23
Maran Capital April 23
Wolfpack Research - Short Thesis on Inspire Medical Systems April 23
Ewing Morris April 24
Hoisington April 24
Horizon Kinetics April 24
Merrill Lynch Capital Markets Outlook April 24
RGA Advisors April 24
Gardner, Russo & Gardner April 26
Greenhaven Road Capital April 26
Polen Focus Growth April 26
Polen Global Growth April 26
Steel City Capital April 26
Guggenheim CIO Outlook April 28
Hindenburg Research - Short Thesis on New Pacific Metals April 28
Laughing Water Capital April 28
Miller Deep Value April 28
Miller Income Strategy April 28
Miller Opportunity Equity April 28
Newfound Research April 28
Quintessential Capital - Short Thesis on Akazoo April 28
RF Capital April 28
White Diamond Research - Short Thesis on BioSig April 28
Open Square Capital April 29
TCI Fund - Letter to Wirecard April 29
Alluvial Capital April 30
Arquitos Capital April 30
Bessemer - State of the Cloud Industry April 30
Broyhill April 30
Alta Fox May 2
Boyar Value May 2
SRK Capital May 2
Distillate Capital May 3
First Eagle Fund of America May 3
First Eagle High Income May 3
First Eagle Income Builder May 3
First Eagle Value May 3
Wolf Hill Capital May 3
Angelo Gordon May 5
Citron - Short Thesis on Inovio May 5
Convexity Maven May 5
Graham & Doddsville - Spring 2020 May 5
Grizzly Reports - Short Thesis on WUBA May 5
Tao Value May 5
Universa on Tail Hedging May 5
Health Invest Partner May 7
Amalthea Capital May 10
Amana Mutual Funds May 10
Andvari Associates May 10
Alphyn Capital May 10
Blue Tower Asset Management May 10
Hayden Capital May 10
Horos Asset Management May 10
LRT Capital May 10
Palm Valley Capital May 10
Paul Tudor Jones May 10
Sextant Mutual Funds May 10
Steel City May 10
Third Avenue Real Estate May 10
Third Avenue Small Cap May 10
Tidefall Capital May 10
Touchstone Funds May 10
Bernzott Capital Advisors May 11
Compound Everyday Capital May 11
Comus Invest May 11
Greenwood Investors May 11
Guggenheim Investments May 14
Elliot Management - Alexion May 14
HG Capital Trust May 14
Huffman Prairie May 14
Independent Franchise Partners - Kirin May 14
Tao Value - Strategy May 14
Value Investor Insight - Bill Nygren May 14
Credit Suisse - Global Money Notes May 15
Howard Marks Memo - Uncertainty May 15
Logica Funds - Talking Your Book About Value May 15
Mittleman Brothers May 15
Top Retail Brands May 15
Donville & Kent May 16
Goehring & Rozencwajg May 16
Apollo Asia Fund May 18
Bonitas Research - Short Thesis on Pets at Home May 18
Culper Research - Update on Catasys May 18
Hindenburg Research - Short Thesis on China Metals Resource Utilization May 18
Lightsail Capital May 18
Muddy Waters - Update on Burford Capital May 18
Spruce Point Capital - Short Thesis on Forescout Technologies May 18
Verdad - High Yield May 18
KKR Global Macro Trends May 20
Lightsail Capital May 20
FPA Crescent Fund May 20
Aoris May 22
Giverny Capital Asset Management May 22
Bireme Capital May 25
Greenhaven Road Partners Fund May 25
Hindenburg Research - Short Thesis on Sorrento Therapeutics May 26
Land & Buildings - Short Thesis on Empire State Realty Trust May 26
Muddy Waters - Short Thesis on GSX May 26
Viceroy Research - Short Thesis on Sorrento Therapeutics May 26
JLL - US Office Outlook May 27
Massif Capital - Long Thesis on Bakkafrost May 27
Bonhoeffer Fund May 29
Howard Marks Memo - Uncertainty II May 29
Muddy Waters - Update on GSX May 29
Citron Research - Long Thesis on RH June 1
CloudyThunder Research - Short Thesis on Tianneng Power June 1
Horseman Capital June 1
JCapital Research - Short Thesis on NovaGold June 1
Asset Value Investors - Fujitec June 7
GMO June 7
Grizzly Research - Report on GSX Techedu June 7
Michael Mauboussin Report June 7
Culper Research - Short Thesis on VBI Vaccines June 9
Grizzly Research - Short Thesis on Hebron Technology June 9
Muddy Waters - Short Thesis on EHTH June 9
OSS Research - Short Thesis on Tactile Systems June 9
JPMorgan Guide to Alternatives June 11
Michael Mauboussin - The Math of Value and Growth June 11
Morgan Stanley - Gaming & Lodging Primer June 11
Old West June 14
Arisaig June 15
A Guide to Social Media in China June 18
Brookfield Asset Management June 18
First Eagle June 18
Pender Funds June 18
Peter Lynch Collection 1993 to 1999 June 18
Prescience Point Capital - Short Thesis on Enphase Energy June 18
Pzena - Extreme Discounts in Oil Services June 18
Alta Fox - Evolution Gaming Thesis June 19
Alta Fox - Letter to Collectors Universe June 19
Crescat Capital June 19
Howard Marks Memo - June 18 June 19
J.P. Morgan CIO Survey 2020 June 19
Cambridge Associates - Managing Portfolios Through Downturns July 1
Citron Research - Sonos July 1
JCapital Research - Ideanomics July 1
JCapital Research - WiseTech Software July 1
Logica Funds - Talking Your Book About Value III July 1
Interviews & Lectures Date Posted
Bill Ackman - Bloomberg April 7
Bill Ackman - CNBC April 7
Jim Chanos April 7
Murray Stahl April 7
Oaktree Capital - Emerging Markets April 7
Oaktree Capital - Relative Value April 7
Steve Bregman April 7
Fundsmith Annual Meeting April 8
Grant Williams 2020 Series April 9
Barry Diller April 17
Willow Oak Value Hour April 17
Ray Dalio - Bloomberg April 18
Invest Like the Best - Dan Rasmussen April 18
Invest Like the Best - Gavin Baker April 18
Masters in Business - James Montier April 18
Carl Icahn - Bloomberg April 26
Greg Maffei - CNBC April 26
A Shift in Investment Strategies Post Coronavirus April 28
Bill Ackman - Farnam Podcast April 29
Jim Chanos on Financial Fraud May 3
Sam Zell - Bloomberg May 5
David Tepper - CNBC May 15
Stanley Druckenmiller - ECNY May 15
Howard Marks - Bloomberg May 18
Jerome Powell - 60 Minutes May 18
Chris Bloomstran May 20
Gavin Baker - CSIMA May 20
Howard Marks - CFA May 20
CFA Institute Virtual Conference May 25
Jorge Paulo Lemann May 26
Invest Like The Best - Jeremy Grantham June 11
Peter Kolchinsky and Kush Parmar on Biotech Investing June 18
Horizon Kinetics - Economically Resilient Business Models June 18
Bruce Flatt June 19
Bill Ackman July 1
Jim Chanos July 1
submitted by Beren- to SecurityAnalysis [link] [comments]

Palmer new release programme

(This was discussed in previous threads, but since it is now official, it is a good chance to bring it up and see how it will impact investment and purchasing)
In short: Palmer will only release half the bottles in EP, and remaining half 10 years after the vintage.
News by The Drink Business
“In a release the estate said that from this Thursday 24 September onwards, “every last Thursday of September” will herald the re-release of a 10 year-old vintage of the grand vin from its cellars.
......
It explained: “For Château Palmer, 10years marks an age of reason, the arrival at a first level of maturity. In the shadows of the cellar, from the bottom of these bottles which have never left the château, the wine reveals its identity, its character, the spectrum of its aromatic nuances. After 10 years of evolution inside the bottle, now in light of its tasting, it can finally reveal itself. Or wait patiently for another peak.”
.....
Palmer, which started keeping back a good half of its production in 2010, just before Latour quit the en primeur system in 2012, has no doubt been watching Latour’s progress with interest over this time, while devising and revising its own strategies.
Ella Lister, CEO of Wine Lister, told the drinks business: “Château Palmer has been patiently and consistently keeping back half its production of the grand vin since the 2010 vintage for release exactly 10 years later. Think of it as a ‘half Latour’, although they got in there first with the idea, nonetheless keeping one foot in the en primeur system. It’s a smart way of hedging bets between the unique global marketing opportunity presented each year by en primeur, and also benefiting from potential market price increases in the intervening decade.”
submitted by thomasthtc to WineEP [link] [comments]

Tempering your enthusiasm for hedge funds as a HNW investor

I feel like there’s often too much enthusiasm in the FatFIRE community for exotic or “exclusive” investments, and I wanted to offer a counterpoint to hedge fund (HF) enthusiasm. Quoting a redditor who shall remain anonymous, to the first order, "any fund that is worth investing in won't take your money, and any fund that will take your money isn't worth investing in." [Modulo some valid counterarguments wrt portfolio optimization - though even there, if you can only access non-top-tier funds, this in practice argues for a tiny % allocation to such funds.] I think the proper place for HF's is as a portfolio diversifier, but only if you have an appropriate set of expectations going in.
If you look at some of the "best" funds, RenTech's flagship fund basically has no outside investors for ages (though their crappier, alt-beta funds are still open) and most of DE Shaw's funds were typically closed to new investors (all of these have very high minimums); they did reopen recently to new money from existing investors. It's a great signal to be capacity managing rather than asset gathering, of course - but that means you generally can't get in.
Even when investing in the "best" funds (like RenTech or DE Shaw or Two Sigma), you have to consider whether they're still able to extract economic rents after market evolution and AUM growth (again, capacity management is a key signal) - and more importantly, whether investors are compensated sufficiently given top-tier hedge fund pricing power. RenTech was well known for their 5/44 fees; DE Shaw re-raised to 3/30 from 2.5/25 for much of their funds last year; they used to have 3.5/35 assets (on a minority of funds) and their flagship fund was 3/30 for most of the 2000's.) Fwiw, my admittedly industry-biased impression is that these shops do still add value net of fees (at least for their main funds).
Fundamental long-short hedge funds generally have a massive structural disadvantage for investors, since most L/S funds have decently + beta to equities and/or run notionally long as well (though the latter is unimportant, it often causes the former), even after some hedging/shorting. You're almost always still paying 2/20 or 1.5/20 fees on the beta component (well, to be fair, let’s just consider to “20”), whereas the fair price on equity index is close to 0 (or fine, a few basis points). This is an insane, massive hurdle to beat. Imagine if your L/S fund has 0.5 beta to markets (and assume 7% nominal returns for equities) - you're already down 0.50% right out of the gate, even without considering the tax disadvantages.
In general, L/S fundamental shops don't add expected alpha (especially net of fees); a small minority probably do, but the noisiness of returns / relatively small number of bets (relative to systematic funds*) makes it almost impossible to know ex-ante which funds are value-additive (unless, say, you're working at the fund). Sure, some funds will realize alpha ex-post, but that's no different than Warren Buffett's coin-flipping competition example - even with no skill, you'll have winners and losers that beat the markets, but that's not an argument for investing in a lucky coin-flipper. Put differently – say you can get in at the ground floor on an up and coming hedge fund. You know that the PMs are passionate, intelligent, dedicated, have great CVs, track records at their previous shops. Guess what – that describes tens of thousands of folks, most of whom won’t generate outperformance net of fees, taxes, etc.
In addition, it's relatively rare to see L/S funds resist the urge to gather assets, rather than manage capacity and close to new investors. This makes perfect sense - there's a ton of ill-conceived demand for HF investments from investors w/o sufficient experience evaluating such funds and are excited to participate in an exotic asset class. They're often throwing money at funds w/ hot track records, failing to recognize that a great track record at $50mm AUM is not very indicative of performance at $2B or $10B AUM. If you're a fundamental manager, it's incredibly difficult to generate repeatable alpha and new investment ideas - why wouldn't you take on lots of assets if you're getting paid on AUM as well as performance, even if that degrades returns?
Finally, but perhaps most importantly, the tax efficiency of most HF strategies is just awful - turnover results in lots of realized gains (if you're lucky); I'm not a fan of most PE investing for HNW individuals, but at least most of the realizations tend to occur once, and years down the road. If you've got enough money in your self-directed solo-401k, fine, but that's not an option for most folks, even those in FatFIRE.
I do think there's value in alt beta / exotic beta / risk premium collection strategies, as long as they're properly priced and recognized as such (and even more so if they're tax-aware) - the problem with many hedge funds is that they still charge 2/20 fees without acknowledging that all they're doing are crappy versions of such systematic bets. Without really reviewing the landscape of providers, my handwave-y guess is that places like Kepos Capital and Stone Ridge are probably some of the better players in this space, though Kepos has super-high minimums (and is geared towards institutions), and Stone Ridge charges (appropriately) high fees. I have no personal connection to them, though I looked at them briefly in the past (more than 5 years ago) as competitor research, so for all I know management has changed, blah blah blah.
One more thing - you ideally want to diversify your idiosyncratic exposure to single-HF operational, rogue trader, whatever-type risk, but can’t afford to invest in 20 funds. So maybe you’re considering a fund of hedge funds? The vast majority of fund of funds are really terrible, have check-the-box-like approaches (and add another layer of fees), and the ones with access to higher quality underlying funds often charge more as well; I've probably only come in contact with one that ever added value, and it explicitly kept its beta ~0 or even mildly negative. It also charged appropriately, maintaining the increasingly rare 1/10 additional fee layer, which makes it a hard sell, and had institutional-level minimums.
This is rapidly turning into another quarantine-diatribe, so I’ll close by commenting quickly on academic research into performance persistence among HF managers. Briefly put, there’s no strong consensus, but lots of evidence suggests that persistence is low (1 year or so is the limit), except among bad performers, where longer-term persistence can be observed (heh). Also, higher persistence seems to be weakly predicted by lower betas to major factors (like the equity markets); this is completely in line with my priors on manager incentives and sorting etc. Granted, these studies tend to be slightly unfair, since the HF return databases they draw from will not have data for many of the most successful funds (which, lacking a need to fundraise, often keep performance data private) – but this is another commentary rabbit hole.
Source: worked at a few of the largest hedge funds while in college and straight out of college since 2000, and consulted part-time post-FatFIRE'g for a fund of funds (on constructing in-house systematic strategies / total portfolio products, not on hedge fund selection).
*-This is a relative statement- you obviously can have systematic strategies that are really making the same bet over long time periods w/o any crashes, only to lose years of PnL in a single crash episode. Still, performing portfolio attribution analysis, or considering research process, etc. in a systematic strategy context, yields much less statistically (and qualitatively) noisy results than for a L/S fund with relatively few, fairly chunky bets.
tl'dr: generally speaking, don't do it as a HNW investor, even if some institutions can play in the HF market successfully. here's a long list of reasons you'll be taking it on the chin if you do.
submitted by dyslogorrhea to fatFIRE [link] [comments]

A Long-form Analysis of MGM and It's Assets: What Would Its Suitors - Apple, Amazon, Facebook and Comcast - Be Getting?

By now I think you've heard the big news about the Lion: They are looking into getting sold. After a solid decade of Hollywood perks, Anchorage Capital manager Kevin Ulrich is looking to off-load MGM in the midst of a pandemic after a series of tumultuous valuation drops.
Among the potential acquirers were Facebook, Apple, Amazon, and Comcast. Among those, three are tech companies and one is a more traditional Hollywood media company.
There are some major hurdles to a potential deal, however. Danjaq, the IP holding company that owns Eon Productions and is run by Barbara Broccoli and Michael G. Wilson, owns merchandising rights and shares greenlight authority for all Bond movies. Distribution rights for movies like Creed and Casino Royale are divvied up between different companies. Reality TV assets, which were brought in to bolster their holdings, include Big Fish Entertainment, which among other things produces the now-cancelled Live PD. Debt hides in the balance books; any purchase would include about $2b, making the purchase that much harder to stomach.
For fun though, let's take a look at each of these four buyers to see how it could play into their strategies.
Apple: The much ballyhooed content lack for Apple might've motivated a deal back in the day, especially in 2019; indeed, the article notes that a deal with Apple that would've valued MGM at $6b was almost reached in 2018.
In 2018, Mr. Ulrich, by then the board chairman, and others on the board fired Mr. Barber for having early, unsanctioned conversations with Apple to sell the studio for more than $6 billion. The preliminary talks fell apart when he was ousted. Minority shareholders protested, with Owl Creek founder Jeffrey Altman sending a letter to the board saying Owl Creek and other shareholders wanted a deal.
From an accounting perspective, there are some serious perks to buy MGM. Say you spend 8b to get The Lion plus debt; assuming 4,000 movies and 50 100+ hour TV shows, that means you got 13,000 hours for about $600k per hour, pretty cheap all things considered and a fraction of what it would have cost to get the equivalent amount of content at Apple TV+ production prices (seriously where does that money go I don't see it on screen). Plus you get a full-fledged studio with Emmy credentials on the TV side and blockbuster franchises on the feature side; Fargo and Handmaid's Tale alongside Rocky and Bond.
Now here's the question: will Apple actually buy MGM? Their biggest M&A to date was the acquisition of Beats for $4b, and that came with technology that they could use for Apple Music.
This $6b offer came in 2018, before Apple had an in-house studio and any library to speak of. So far, they've been weathering the pandemic surprisingly well; they've managed to keep a steady drip of content between stuff like Ted Lasso and Tehran, while also building up their own in-house production arm (presumably at significant expense).
What this gets Apple now is a still not-insignificant franchise portfolio as well as a library of 4,000-ish movies plus TV shows. That's nothing to sneeze at, but it's still a far cry from the benefits that would've come from acquiring MGM earlier. If your only goal is library, then you don't spend $6b on it. Indeed, I don't think Apple will. Whether Ulrich will be willing to accept a deal for, say, $4b is an open question. My bet would be no.
Amazon: Same deal for Apple, though slightly less urgency because they already have a homegrown studio.
Facebook: Now this is interesting. Facebook exited the scripted content business pretty recently but there is a cognizance that content keeps users coming back to platforms and they need that content. Buying MGM would get them a fairly significant unscripted division with producing roles or control over valuable formats; among other things, they would own Botched! and have producing roles in several Real Housewives franchises, Survivor, and Shark Tank. That having been said, I see any deal that involves the House of Zuck to involve a private equity company like Vine Investments or something that will take command of the library and other such assets - that way, Facebook isn't overpaying for one component.
Comcast: And the more traditional content company. There are interesting synergies that come with ownership by Comcast, but also big stumbling blocks. Their justification for buying Dreamworks was turning a low-margin business like movies into high-margin businesses like consumer products and theme parks. Similar thinking wouldn't be applicable to MGM, at least with regards to Bond; as mentioned before, Danjaq controls Bond's merchandising rights, and Comcast is pulling back investment in Theme Parks hard in the wake of the pandemic (many, many people got fired recently, unfortunately).
Still, control of Bond is important when Comcast is the owner of Sky, a European media company. That alone may end up making a lower-valued deal for MGM "worth it" for the cabler. A sale of MGM might also spur Danjaq to sell the rest of their rights to the property, though I wouldn't hold my breath. An Mi-6 land in Comcast's planned "Epic Universe" Theme Park in Orlando could make a great replacement for the now problematic Fantastic Beasts/Ministry of Magic land that was planned before.
Additionally, weetening the deal for Comcast are a myriad other smaller-scale IPs and franchises that could help beef up their portfolio and generate lucrative TV or movie revivals; among them are Stargate: Atlantis, Teen Wolf, Rocky, Robocop, Chitty Chitty Bang Bang, The Addams Family, Jump Street, Pink Panther, Legally Blonde, Carrie, Bill & Ted, and Poltergeist. Rights to adapt the musicals to film would also be taken; Dirty Rotten Scoundrel and Legally Blonde: The Musical are tantalizing possibilities.
Tolkien properties like The Hobbit are presumably still tied up in rights tangles with New Line and the Saul Zaentz company, as well as Tolkien's estate. So far as I can tell, Zaentz owns merchandise, New Line has license for the film rights - but not necessarily/fully TV? - and the Tolkien estate own Theme Parks. Look, if MGM had sole rights, it'd be a Disney subsidiary by now.
In terms of TV: Epix, I assume, would be on the chopping block. Steve Stark's MGM/UA Television appears built to be a prestige-outlet (Fargo, Perpetual Grace LTD, Vikings, Handmaid's Tale, though they're programming more sci-fi and general interest stuff like Clarice and Condor) and can thus complement the more genre/thriller-y UCP. By the same token, Orion TV would get retired. The dedicated formats division could be a component of Universal Alternative; Evolution Media, producer of Botched, can be kept as a separate division. Other assets, like Christian Film and TV producer Lightworkers, Live PD producer Big Fish, Mexican Media joint-venture Gato Grande, and Linear Channel Impact, can be sold.
MGM Films could go either way, De Luca has a relaxed relationship with Donna Langley so I could see her protecting him for a while. The best case scenario for him IMO is a FOX 2000 type situation where the team is dedicated to producing a small slate of good, lower-mid budget movies that are intended for Oscar season. Trouble is, Fox 2000 had like, 16 employees including assistants, and MGM is a full-on studio, so the overhead's gonna be a lot higher. Distribution and Marketing would also presumably gonna get pink-slipped, unfortunately; unlike Disney, Universal has ample infrastructure for distributing those sorts of movies. Not helping him would be if any of MGM's movies bomb. Overall, I think MGM has a strong enough brand to where it'll survive as Universal's New Line Cinema, a smaller-scale division with occasionally unclear branding (ironically, De Luca was NLC's President of Production). I am, however, left wondering if execs like Pam Abdy would tolerate being in charge of a glorified boutique when they signed on to be part of a studio.
Orion Pictures is in an awkward place in the case of a Uni merger. Their historical brand is as a genre outfit and said brand was revived in recent years with releases like the 2019 Child's Play and The Prodigy. However, they've recently pivoted to making it an outlet for underrepresented voices... but haven't had the chance to actually make that pivot public with some theatrical releases (or even projects). That leaves Langley and co with a choice regarding what to do Orion: keep it as a genre label, keep it as a minority-focused label, or retire it completely.
Now the plus side is that the overhead is likely to be small; the downside is that unlike say, Sony, Uni has little patience for prodigious numbers of labels (hence how short-lived experiments like reviving Gramercy as a label were, and stuff like selling off Rogue Pictures), so that bodes ill for the continued survival of Orion. Uni also already programs tons of minority-focused movies in general, so it's unclear if the brand would stand out in the broader company. On the flipside of that, Universal's large number of minority-focused Overalls (Will Packer, Jordan Peele, Malcolm Lee, Eva Longoria, SpringHill, Justin Lin) could help feed Orion's pipeline; I would imagine people like Michael B. Jordan, Taika Waititi and The Rock being wooed over to a producer deal with Universal by the presence of a dedicated minority-voice division designed to put out passion projects related to their heritage. The real test of whether or not Uni would want to nurture Orion as that kind of brand would be if they put out the next Jordan Peele movie through them.
Overall, it might be worth it to keep Orion around and see where it goes. If it doesn't work out, they can always just promote Alana Mayo as an EVP in Universal proper and retire the label completely. If Universal really wanted a genre label that badly, I would suggest taking a minority-stake in Blumhouse first.
submitted by rageofthegods to boxoffice [link] [comments]

The Smartest Guys in the Room eerily describes Tesla

I just finished reading the smartest guys in the room and couldn't believe how many parallels Enron's story has with Elon's. Obviously some of these are immaterial and just coincidences, but I think some of them get to the heart of how the companies got away with so much.
For the record I'm not saying that Tesla is a fraud like Enron was. The accounting rules that were put in place after Enron's bankruptcy make accounting fraud a lot less likely these days. I'm just calling attention to the company culture and some of the bad behaviors it causes.
I tried to cut the content as much as possible but there's so much here that it's difficult.
Everything below other than the headings is a direct quote from the book, written in 2003 with a few quotes from the 2013 update. Again, the parallels are impressive.

Outside Investors

Blaming the shorts and the media

In Internet chat rooms, individual investors flamed analysts who downgraded their favorite stocks. Even sophisticated institutional investors—the analysts’ primary clients—often became angry at research analysts who turned bearish on stocks they held. It didn’t matter if the analyst’s insight was correct or perceptive; all that mattered was that he or she had hurt the stock.
Enron, he told the jury, was “a wonderful company—a shining star.” Its failure had resulted not from fraud but from an irrational panic (the “run-on-the-bank” theory) triggered by irresponsible media stories (especially those Wall Street Journal articles) written by reporters in cahoots with short sellers bent on destroying the company.

Banks and analysts complicit

Analysts who worked for Wall Street banks later claimed that they had been deceived by Enron. But if they were indeed victims, they were willing ones. “For any analyst to say there were no warning signs in the public filings, they could not have read the same public filings that I did,” Howard Schilit, an independent analyst who is the president of the Center for Financial Research and Analysis, later told Congress.
But analysts got to be rich and famous only if they were bullish. That’s what got them appearances on CNBC, not to mention loving profiles in The New Yorker,
What if an analyst tried to get beyond Enron’s pat explanation of its business? Executives would imply that they were slow and stupid, and most of the other analysts would agree with that assessment.
For the analysts, there was a final reason they needed to keep their buy ratings on Enron: the ugliest and most powerful reason of all. There was simply too much investment-banking business at stake not to have a screaming buy on the stock.

Aggressive fan boys against the shorts

Over at Kynikos, Jim Chanos was in hysterics. He had never heard the CEO of a Fortune 500 company lose it like that. After listening to the conference call, Chanos was more convinced than ever that Enron was hiding serious problems. Even owners of Enron stock thought Grubman’s questions were perfectly valid—and if they hadn’t been, Skilling should have dealt with them more adeptly. “Any CEO should be able to handle the hardest of questions from the most aggressive of shorts,” says analyst Meade.

Large investors started dumping shares

Instead, in private deliberations in sequestered boardrooms, major institutions were beginning to reevaluate their position on Enron. Unlike the public buy recommendations from the equity analysts, though, these private decisions never came to the attention of the small investor. Between March and the end of June, four large holders—Janus, Fidelity, American Express, and American Century—sold a total of 21.3 million shares, according to an internal Enron document. One major Wall Street firm that traded with Enron began to watch its exposure more carefully and ever so slowly cut back the amount of money it would allow Enron to owe at any point. “We thought Enron was a very funky animal that kept getting funkier and funkier,” says a credit officer there.

Shorts leading the way with information

It was short sellers who first asked tough questions about Enron. Their interest was sparked by the tremendous run-up in the stock, which can suggest that a company is overvalued. It was fueled by the hype about broadband and the collapse of Azurix.
Though most of the mainstream business press was unaware of Roberts’ report, it was widely circulated among hedge-fund managers and other large institutional investors. A reporter named Peter Eavis, who wrote for the popular online financial site, TheStreet.com, followed up on Roberts’s research and began writing a string of negative stories about Enron. Slowly, the heat was being turned up.

All the information was public

The circle of people who knew—or should have known—that Enron’s glittering surface masked a different reality was surprisingly large. Much of what Enron did—such as generating billions in off-balance-sheet debt—was out in the open. Many of the analysts knew full well that the company’s earnings far outstripped the cash coming in the door. The bankers and investment bankers, who worked for the same firms as the analysts, certainly understood what Enron was doing; indeed, they made Fastow’s deals possible. The credit-rating agencies knew a lot. The business press, which could have looked more closely at Enron’s financial statements, couldn’t be bothered; the media was utterly captivated by the company’s transformation from stodgy pipeline to new economy powerhouse. And of course there were any number of Enron’s own employees who could see for themselves how the company was making its numbers. And yet, they all chose not to make the logical leap, to see where it was inevitably headed. Instead, they all chose to believe. Everyone loved Enron.

Company Leadership

Nepotism, the company is mine

His top executives were also dismayed at the way he and his family openly fed at the Enron trough. “If you’re the CEO of a public company, it isn’t yours,” says a former executive, but Lay seemed oblivious of such distinctions. Over the years, he seemed to have cultivated a powerful sense of personal entitlement. Not only did he use the company’s fleet of airplanes for his private use; so did his children. Enron employees called the planes the Lay family taxi, so frequently did family members use them. Linda Lay used an Enron plane to visit her daughter Robyn in France. Another time an Enron jet was dispatched to Monaco to deliver Robyn’s bed.

The CEO was a visionary genius

When people describe Skilling they don’t just use the word “smart”; they use phrases like “incandescently brilliant” or “the smartest person I ever met.”
“What Skilling did so well was to motivate other people to his vision,” says a former Enron trader. “I still believe in a lot of the things he said.” Several of the traders did think that some of Skilling’s personal habits, such as hanging out in Houston dive bars until the wee hours, were strange. But they liked that in a way, too. “Enron people, who cares about normal?” asks another former trader. “We don’t like normal. People at Enron didn’t want a typical CEO.” And in a way, Skilling was just like them.
Skilling and Lay found themselves mentioned in the same breath as GE’s Jack Welch, Microsoft’s Bill Gates, Apple’s Steve Jobs, and the very small handful of other celebrity businessmen.
By all appearances, Skilling was on top of the world. BusinessWeek celebrated his new position with a worshipful cover story, featuring Skilling precisely as he wanted the world to see him, dressed in ultracool black, electricity sizzling through his body. Worth magazine described him as “hypersmart” and “hyperconfident”—and named him America’s second-best CEO

The fans became disillusioned with CEO

And suddenly, Skilling was no longer infallible. Always before, when Skilling said the stock would go up, it went up. But not this time; now, his insistence that the stock was worth $126 a share had the scent of desperation. Skilling now hated riding in the elevator with employees.

Unstable CEO, harassing employees

A few years earlier, when he was still COO, he gave the finger to an employee who had almost run into his car during the morning parking rush. It was hardly the sort of gesture one expected from a big-time corporate executive. But Skilling blew off complaints about the incident, word of which spread like wildfire. “I’m an entrepreneur, not a politician,” he said.
As for Skilling’s mood, it seemed to oscillate between depression, righteous indignation, and manic excitement about the next big enchilada.

Margin calls

Lay’s finances, however, were built around the belief that Enron’s stock would never go down. During most of the 1990s, Lay had most of his net worth in Enron stock. In 1999, his advisers began pestering him to diversify. But he did so in a manner that wound up, in effect, doubling his bet on the stock. Here’s what he did: Lay pledged almost all of his portfolio of liquid assets—primarily Enron stock—as collateral for bank and brokerage loans.

Genuinely believed in their work

For all of Skilling’s public bravado about how great everything was at Enron, he spent most of his time dealing with a host of serious problems, the part of the job he had always despised. Part of him was caught up in maintaining the illusion that Enron was, indeed, the World’s Leading Company. But it seems likely that another part of him was being forced to confront the darker reality. Holding those two conflicting notions in his head at the same time—at a minimum, it had to be exhausting.

Pushover board

And here’s the most amazing denial of all: Even Enron’s board of directors—the people formally entrusted with serving as a check on management and with guarding the interests of the shareholders—disclaimed any responsibility.
Lehman Brothers was so shocked that the Enron board would approve such an arrangement that it insisted on receiving a certified copy of the board resolution approving Fastow’s conflict. Then it signed on for $10 million.

Insider selling

Pai had continued unloading his shares. Just between May 18 and May 25, 2001, he sold almost a million shares. When he had finally parted with his last share, Pai had sold over $250 million worth of Enron stock—more than anybody else at the company.
Skilling also took care of his own finances. Since May 2000, he had sold over 450,000 shares of Enron worth some $33 million. In mid-September, he sold another 500,000 shares, bringing his total proceeds to over $70 million.
Lay, of course, didn’t reveal that in the previous two months, he had secretly cashed in $20 million of his own stock by drawing down his company credit line, then repaying it with Enron shares—part of the $78 million Lay had pocketed this way over the previous 12 months.

The Company

The company was good for humanity and disrupting dinosaurs

Just as he had when Enron was riding high, Skilling labeled ExxonMobil a “dinosaur”—as though it didn’t matter that the oil giant was thriving while Enron was nearly extinct. “We were doing something special. Magical.” The money wasn’t what really mattered to him, insisted Skilling, who had banked $70 million from Enron stock. “It wasn’t a job—it was a mission,” he liked to say. “We were changing the world. We were doing God’s work.”
He was openly scornful of steady, asset-based businesses that grew slowly but generated cash—then swept them away to make room for a series of ever-bigger, ever-riskier bets that brought in almost no cash at all.
According to their view, what the Enron executives had done was nothing worse than what dozens of CEOs had done in Silicon Valley, where people who worked for companies with far less to offer than Enron had fed Internet hype, cashed out, and walked away unscathed. A more extreme version of this thinking was that Enron’s sins were not incompetence and fraud but rather innovation and free-spiritedness. Enron’s dwindling collection of defenders made the same argument as Michael Milken’s defenders had in the 1980s: They were being prosecuted because they were a threat to staid, old corporate America. “You can always tell who the pioneers are, because they’re the ones with arrows in their backs,” became their refrain.

Telling the market what they want to hear, pointing forward

Besides, the Enron story, when Skilling told it, sounded so good; otherwise intelligent people were reduced to nodding their heads in agreement. Skilling listened to what the market wanted and sold Enron that way.
Always before, Skilling was able to come with a new big enchilada to drive the business—and the stock price. That was the part of being a businessman that he loved. But he was out of big ideas. Righting Enron required lowering everyone’s expectations—something he could not bring himself to do—and fixing problems, which he hated. “It was getting hard,” says a former executive, “and Jeff doesn’t do hard.”

All the appearances of success

“Enron is literally unbeatable at what they do,” raved David Fleischer, a securities analyst at Goldman Sachs. “The industry standard for excellence,” chimed in Deutsche Bank’s Edward Tirello. “Enron is the one to emulate,” wrote the Financial Times.
That Skilling himself sometimes seemed unable to give a coherent explanation of Enron’s business—at times, he got by with saying “We’re a cool company”—bothered no one. All that mattered was that the stock was going up. Because the stock was rising, Enron’s executives were seen as brilliant.
It was so easy to believe, for signs of success were everywhere. Enron was building a flashy 40-story skyscraper, designed by the architectural superstar Cesar Pelli, at a cost of about $200 million—complete with a $1 million, hand-etched relief map of the world that hung from the atrium ceiling on 18-foot glass panels. Lay told employees that the building “may become kind of the landmark for downtown Houston.” (It was still under construction when Enron collapsed; the building was sold for $102 million in 2002.) In London, Enron’s expensive new offices overlooked Buckingham Palace. “You walked through the offices every day and thought, ‘Someone is paying for this,’ ” says a former Enron Europe employee. “We all had faith based on empirical observations.”

Good ideas but unrealistic

Skilling also had a tendency to oversimplify, and he largely disregarded—indeed, he had an active distaste for—the messy details involved in executing a plan. What thrilled Skilling, always, was the intellectual purity of an idea, not the translation of that idea into reality. “Jeff Skilling is a designer of ditches, not a digger of ditches,” an Enron executive said years later. He was often too slow—even unwilling—to recognize when the reality didn’t match the theory.
Most executives believed Lay’s makeup included an unhealthy capacity for self-delusion: he tended to deceive himself about harsh truths he didn’t want to face. “He invents his own reality,” says one.
In many ways, broadband stands as the logical evolution of the accumulating problems that ultimately brought down Enron. What Enron was trying to accomplish was bold, even inspirational. It looked dazzling in a hotel ballroom, presented to analysts by Skilling on PowerPoint slides. But in the real world, it ran headlong into the reality of a thousand technical, economic, competitive, and logistical roadblocks that keep any business plan—especially one so exceedingly ambitious—from unfolding perfectly.
Attempting even one of these plans would have been an enormous undertaking for any company, requiring a tremendous commitment of resources, time, and talent. To try to do them all at once, without any previous experience, virtually overnight? It was crazy.
While EBS was never what Enron claimed, certainly much of the work being done was real. Teams of engineers were struggling with the technology, trying to crack the code on the networking problems, testing video-streaming, spending hundreds of millions on hardware, and cobbling together the promised 15,000-mile fiber network, which Enron had pledged to extend to Europe (where it was putting yet another hundred employees). The traders were developing standard contracts, trying to drum up trading partners, and courting the phone companies. EBS’s mergers-and-acquisitions team gobbled up software companies that might help the business along. Broadband even had its own venture-capital division, investing in start-ups and public tech stocks. Considerable effort was also devoted to giving Wall Street the impression of rapid and dramatic progress.
Energy trading, which Enron pioneered, is very real today, as is video on demand—which was supposed to be part of Enron’s broadband business. Corporate energy-efficiency retrofitting—the intended business of EES—is all the rage today. Compare all that to the making of loans to people who couldn’t pay them back and the packaging of those loans into securities to be sold to clueless investors. The former was genuinely creative; the latter was simply opportunistic and destructive. Or to put it a different way, there was so much possibility in Enron, and there could have been a different ending. There was never going to be anything but a bad ending to the inflation of home prices. By some measures, maybe the Enron guys really were the smartest guys in the room.

Fake it till you make it

It was also a veritable sham. The war room had been rapidly fitted out explicitly to impress the analysts. Though EES was then just gearing up, Skilling and Pai had staged it all to convince their visitors that things were already hopping. On the day the analysts arrived, the room was filled with Enron employees. Many of them, though, didn’t even work on the sixth floor. They were secretaries, EES staff from other locations, and non-EES employees who had been drafted for the occasion and coached on the importance of appearing busy. One, an administrative assistant named Kim Garcia, recalls being told to bring her personal photos to make it look as if she actually worked at the desk where she was sitting; she spent most of the time talking to her girlfriends on the phone. After getting the all-clear signal, Garcia packed up her belongings and returned to her real desk on the ninth floor. The analysts had no clue they’d been hoodwinked.
When the executives talked about the Enron Intelligent Network, they made it sound as if it were working already. “This software layer, is this a pipedream, is this something that we’re going to get done in the next five years?” asked Joe Hirko, co-CEO of the business. “No, this is something that exists today.”
At the time, Enron had portrayed this network as “lit, tested, and ready.” In fact, it wasn’t close to operating on a commercial scale, and much of the promised technology never made it out of the lab.
Top executives Ken Rice, Kevin Hannon, and Joe Hirko, as well as two others, were charged with fraud and insider trading, accused of lying to the investing public about EBS’s technological capabilities to inflate market valuations of the business while collectively selling more than $150 million of stock.

Thought they were a startup

Everybody talked about moving at Internet speed. Much of what Skilling was selling had the effect of positioning Enron as a company that had more in common with the dot-coms than with an old energy giant like Exxon. Of course it also helped that no one suspended disbelief more than Skilling himself: he seems to have truly thought the culture he was establishing would give Enron a huge competitive advantage in the new age.

Obscure reporting metrics

“It was a PR message embedded in a financial disclosure,” says one former divisional EES accountant. “That even made Rick Causey cringe.” It served the same purpose as the dot-com metrics: it gave Wall Street something to focus on besides profits.

Slippery Slope

There have been accounting frauds over the years where companies created receivables out of whole cloth or shipped bricks at the end of a quarter instead of products. In such cases, someone at a company has to consciously consider the fact that he or she is about to commit a crime—and then commit it. But for the most part, the Enron scandal wasn’t like that. The Enron scandal grew out of a steady accumulation of habits and values and actions that began years before and finally spiraled out of control.

Employees

Using employees

But even inside Enron, the old Skilling magic wasn’t working anymore. The questions were skeptical. How’d we make our numbers this quarter? Why are you selling so much of your own stock? And finally, from Margaret Ceconi: “You say we’re going to make half a billion a year, Jeff. How in the world are we going to do that? What’s your strategy?” “Well, that’s what you guys are for,” Skilling responded. “You guys are the creative ones—you’ve got to figure it out.” That afternoon, EES laid off three hundred people, including Ceconi.

Trusting the experts

the vast majority of people who worked for Enron simply assumed that the Global Finance team and Enron’s accountants at Arthur Andersen—not to mention the stock analysts and credit analysts—knew what they were doing and that there was nothing for them to worry about.

Performance tied to stock price

For Skilling himself, says a former aide, “the stock price was his report card.” When it rose, he was exultant; when it dropped, he was glum. Whenever he was on the road, Skilling would call several times a day just to check on how the stock was performing. Lots of corporate executives were fixated on their companies’ stock price during the bull market of the 1990s, but Skilling’s obsession went beyond most of them. As a businessman, his thought process revolved almost entirely around the stock, to the point where he began to believe that Enron’s market capitalization—that is, the total value of the company’s stock—was the only measure the company should be concerned with. Eventually, he would justify business decisions entirely on the basis of what it would mean to Enron’s valuation.

Lying about layoffs

Two days later, CBS MarketWatch, another online financial site, quoted Skilling as saying that the rumors of broadband job cuts were “absolutely not true”; Enron’s PR department said the redeployments were “standard daily practice” and went so far as to say there were sixty job openings in broadband.

Expert in everything

Enron was promising to run the cooling and heating systems, hire the energy-maintenance staff, change the lightbulbs, and pay the bills. Enron had never shown that it could manage that sort of operation.

Finance

Financial manipulations at end of Quarter

In fact, it was anything but effortless; there was nothing at Enron that required more effort, more cleverness, more deceit—more everything—than hitting its quarterly earnings targets. As out of control as Enron was on a day-to-day basis, the place went practically bonkers when the end of the quarter grew closer. For this, Skilling deserves the lion’s share of the blame.

Unwilling to raise capital

Although Enron clearly needed capital—it had by then billions in debt and was preparing to spend billions on new business ventures—Skilling and Lay were cool to the idea. Skilling, in particular, was opposed to anything that might hurt the stock price, even temporarily. That’s always the danger when new shares flood the market: the new supply can outstrip the demand for the stock and push the price down. Additional shares also make it harder to hit an earnings-per-share number because there are more shares outstanding. As they say on Wall Street, existing shareholders are diluted.
Rumors had been floating in recent days that Enron would need to do an equity offering to raise money; Skilling went out of his way to flatten the rumor. “From a credit standpoint, there is absolutely no need to issue additional equity, either this year or for the foreseeable future,” he said. “So overall, I have no understanding of why [our] stock price is in the $53, $54—that’s just crazy.”

Bad Credit rating

But to get an A rating would have meant, at the very least, cutting debt, controlling costs, and funding fewer big enchiladas, and that Enron was not willing to do. The highest rating Enron achieved was BBB+, just a few notches above junk-bond status

Risk of credit

Why would investors be willing to buy the Marlin debt? Because once again, Enron promised that if Azurix couldn’t pay it would make up the difference by issuing stock or buying back the debt itself. As was the case with Osprey, investors got extra protection: if Enron’s debt rating fell below investment grade and its stock fell below $37.84, the company would be obliged to pay off all the Marlin debt at once.

Refinancing Debt

Once again, Enron’s enablers came to the rescue, allowing Enron to refinance the Marlin debt. In a CSFB-led deal, Enron raised a fresh $1 billion to pay off old investors and extend the terms of the debt for another two years. This new deal contained the same provisions as the old one: all the debt came due at once if Enron lost its investment-grade rating status—and if its stock fell below $34.13.

Desperate raises

Still, by November 1, Enron was able to announce that it had secured another $1 billion in financing. But as it turned out, $250 million of the package was merely the refinancing of an existing loan from Citi that was expiring at year-end. It improved the bank’s collateral position but gave Enron no new cash. Even after hocking its pipelines, Enron had generated only $750 million more, which wasn’t going to last long.

Cash problems

While Enron’s reported earnings were growing smoothly, the business didn’t seem to be generating much cash—and you can’t run a business without cash. In fact, Enron had negative cash from its operations in the first nine months of 2000.

Bonus coincidences

Used a hair growth drug

He later started using a hair-growth drug to recarpet his balding scalp. At the age of 43, he’d never looked better.

Young inexperienced CFO

Lay told Enron’s board that he felt the best candidate was an internal one: rising star Andy Fastow. In March 1998, Fastow, just 36 years old, was named CFO of Enron. Once again, Enron had installed the wrong man in the wrong job for the wrong reason.
He lacked something else: the knowledge that being a CFO demanded. Fastow knew so little about accounting that one person who knows him wasn’t even sure he could dissect a balance sheet.

Backdating documents

For a price, LJM2 made all sorts of accommodations to Enron, even backdating documents.

Customer deposits boosting cash balance

In 2000, Enron reported an unprecedented $4.8 billion in operating cash flow. Roberts noted that almost $2 billion of it was from customer deposits—because energy prices were so high, Enron’s counterparties had to provide more collateral. But this money didn’t really belong to Enron. If prices fell, it would have to be returned to the counterparties.

Ross Gerber lookalike

Launer was a longtime, well-respected natural-gas analyst. But by the late 1990s, his career had become a perfect example of the rewards an analyst could reap by playing the game according to the new rules. In his reports, he didn’t seem to have any particularly deep insights into Enron’s business. His understanding of the business was such that he told at least one investor that Enron was “a ‘trust-me’ story.” Some at the company didn’t think much of him. “He loved going to lunch with Skilling and Lay,” recalls one former top executive. “He was never into the numbers. And he didn’t understand the trading business even after we spent years explaining it to him.” But he pounded the table for a soaring stock.

70 billion valuation

On August 23, 2000, Enron’s stock closed at $90—its all-time high—giving Enron a market valuation approaching $70 billion.

Larry Ellison

What outsiders would buy into this arrangement? Friendly ones. In the first step of the transaction, the broadband division formed a joint venture, called EBS Content Systems, with two partners. One was a vendor involved in the Blockbuster trial called nCube—a tiny video-on-demand equipment company privately owned by Oracle CEO Larry Ellison.

Jim Chanos

After Chanos saw Jonathan Weil’s story in the fall of 2000, he flipped open Enron’s 1999 10-K. He read: “The market prices used to value these transactions reflect management’s best estimates.” He thought: “A license to print money.” He began talking to Enron’s competitors, Wall Street analysts, and virtually anyone else he thought might have information on the company—though not to the company itself, which he viewed as a waste of time. (“You can call the analysts and get the company party line,” he says.) The more Chanos poked around, the more he felt that the Enron story didn’t make sense. Chanos had made a fortune researching—then shorting—telecom stocks. He knew how much trouble they were in. How could Enron’s broad-band unit be doing so well when the rest of the industry was on life support? “We know telecom cold,” he says. “And here’s Enron bleating about this great opportunity.” Enron’s return on invested capital was abysmally low, around 7 percent—and that figure didn’t even include the billions upon billions of off-balance-sheet debt. “They were chewing up capital,” says Chanos. He was struck by a three-paragraph disclosure in Enron’s third-quarter 2000 filing about its dealings with a related party. No matter how many times he read it, he still couldn’t understand what it said. He showed it to derivatives specialists, corporate lawyers, and other experts; they couldn’t figure it out either. Chanos thought: “They must be trying to hide something.” And then there were the insider sales. Lay was consistently selling about 2,500 shares a day. Skilling was also selling in big chunks. Chanos and the others who shorted Enron’s stock didn’t have any special information that wasn’t available to the bulls. “As soon as anyone looked, they could see the stuff we saw,” says Chanos today. At first, he adds, “We didn’t think it was some great hidden fraud. We just thought it was a bad business.” By November 2000, he had begun taking a big short position in Enron stock.

Billion dollar payment

The debt, which amounted to almost $1 billion, was due at the end of 2001, and just as the short sellers had long suspected, Azurix wasn’t worth nearly enough to pay it back. Which meant, of course, that Enron itself was on the hook for the money. Back when Marlin was set up, in 1998, Enron promised to issue stock if the assets backing Marlin proved insufficient to repay the debt. But now that the moment was arriving, Enron was adamant about not wanting to issue new stock. Given the questions that were swirling around the company, that was the last thing Enron wanted to do.

Attacking the WSJ

“WSJ investigative reporter is doing an expose on LJM-Enron. Obviously, we’ve done everything we’re supposed to, plus some, but they are going to do a character assassination on me based on hearsay from unnamed sources. Major hack job. I probably fired one too many people this year. You may not want to be seen at the pub with me.”

2 billion doesn't last long

Despite the $2 billion that had arrived on November 13, Enron had only $1.2 billion left. Counting the money it had in hand before getting the $2 billion, that meant Enron had burned through at least a billion dollars in six days and $2 billion in less than a month. Clearly Enron no longer had ample liquidity.

Aimed to be the largest company

“When we talk about becoming the ‘World’s Leading Company,’ the target I think we all ought to have in mind is how do we become the company with the highest market value of any company in the world,” he said. At that time, those honors belonged to General Electric, which had a market value of $400 billion—almost six times larger than Enron’s.

Failed massive partnership, blamed the partner for supply problems

Enron announced it was ending its 20-year deal with Blockbuster. Enron publicly blamed Blockbuster, saying the video giant had failed to provide the “quantity and quality” of movies the project needed. Here’s the most amazing part, though: Enron’s spin machine, which had shamelessly hyped the Blockbuster deal to the analysts, now labored to dismiss the significance of its implosion—and the analysts bought it!
submitted by cryptocam26 to RealTesla [link] [comments]

[Standard][WAR] Lets talk G/W Proliferate

A deck that has been on my radar since proliferate was spoiled for the set, is a G/W list that takes advantage of the sheer amount of efficient token producers and AOE counter placement cards. These two effects work very well with proliferate, and when you throw in a few planeswalkers as well then you start getting insane value from even one proliferate trigger.
At it's core the deck functions similarly to the G/W token decks in the current standard, but instead shifts some of the go-wide strategy into a faster go "tall" play style that can help get over other creature decks. The deck is a very board presence focused deck that will need to have a presence early game to be successful. That is not to say the deck cant recover from a board wipe and rebuild, but the deck is certainly weak against board wipe decks. The trade off there is that the deck has a certain level of inevitability to it as it grows out of control very fast, similar to merfolk or mono white.
For now lets take a look at some of the card options we have to work with this upcoming standard, and then ill present the list I am currently testing with my group.
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Early Game (1-2 drops)
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[[Dauntless Bodyguard]]: Efficient and great at protecting key cards. Unfortunately this card is better played turn 2+ which can be a problem if you rely on it to be your 1 drop.
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[[Legions Landing]]: This card is a staple in every go-wide deck for a reason, it provides a lifestealing token and ramp if you get a good opener. Late game it can help you crawl back from a wipe.
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[[Pelt Collector]]: This guy might look odd in a deck with a bunch of small creatures, but even if he gets a single growth trigger from a creature being played the proliferate and AOE counters this deck places makes this little guy a big trampling threat. All for one mana!
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[[Healers Hawk]]: Against RDW this guy can help win a race pretty quickly, but besides that it's average at best. It is neat to get some counters on an evasive threat however
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[[Hunted Witness]]: Chump blocker that replaces itself, can be useful if you want to hedge your bet against sweepers but overall this guy is just better in aristocrat decks.
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[[Skymarcher Aspirant]]: Kind of a mix between Hawk and Bodyguard, making it a decent top deck late game when you need to get a few points of damage through.
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[[Adanto Vanguard]]: Potent threat that gets only better with +1/+1 counters running around, great if you find you are struggling with control matchups.
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[[Huatli's Raptor]]: Bread and butter of a proliferate deck, this guy is an efficient 2/3 vigilance beater early that plays great with Pelt collector. Whats great is that when it is drawn later it's just as useful as it can pump the team with proliferate.
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[[Growth-Chamber Guardian]]: Another concession to the control/midrange matchup as this card can represent 3 extra cards. The fact that is draws you a card every time you give it a counter makes it very valuable when you are trying to keep a reasonable hand size against a grindy deck.
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[[Emmara, Soul of the Accord]]: An all star 2 drop that can build an army by herself, that also has great synergy with loxodon and other convoke cards.
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[[Hero of Precinct One]] With 12+ multicolored cards in your deck this little 2 drop can provide quite a bit of value by itself. Decks like this want to have "army's in a can" type cards that can build board presence quickly, and this card fits the bill perfectly if you can find enough playable gold cards.
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[[Pollenbright Druid]]: Another cheap proliferate piece that can also just grow a creature early if you need to play it on curve.
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Late Game (3-5 drops)
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[[Jiang Yanggu, Wildcrafter]]: I seem to be higher on this guy that most people, but in my opinion this guy can be a key role player in this kind of deck. Not only does he play will with proliferate but he also helps ramp out multiple threats early and provide some counters to grow the team.
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[[Knight of Autumn]]: Swiss army knife type of card that plays well with the main strategy of the deck.
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[[History of Benalia]]: Sometimes you just cant beat a good value card, and this is one of those. two 2/2 knights that grow into even bigger threats for a turn, all for the low investment of 3 mana.
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[[Ajani, the Greathearted]]: Great new addition to the deck that puts in work against creature decks. Usually you will use him for the better proliferate two turns in a row if you can, but then you can sit back and build up with a bit of lifegain so you can do it all again. Against mono red this guy can represent 9 extra life if they decide to kill it, as well as provide vigilance so you can safely race.
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[[Bloom Hulk]]: This guy is pretty vanilla as long as constructed goes, but something about a 4/4 that grows the whole team is pretty good. Could be worth a spot on a slower version.
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[[Evolution Sage]]: Proliferating every turn is a strong effect in standard, the problem is that it's tied to a 3/2 for 3 that dies to everything. The nice thing is that as long as you play it before your land drop you can always get at least one trigger.
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[[Venerated Loxodon]]: Pretty much the centerpiece of this kind of deck, this card provides you with so much pressure that it can single-handedly win you games if your curve was decent.
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[[Shalai, Voice of Plenty]]: Very useful card that gives you an evasive threat that protects your other permanent's and face from any pesky burn or removal. Late game she provides a repeatable blanket of counters which will almost always close out games quickly.
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[[Trostani Discordant]]: Anthem effects stapled on a body that also provides you with tokens is a solid deal for 5 mana, and there is a reason this card see's decent constructed play.
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Removal/Utility Spells
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[[Flower // Flourish]] Nice little utility card that allows you to lower your land count and increase your multicolor count if you choose to run Hero of Precinct One. If you flood out this can also be an overrun effect which eliminates the worry that the card will be useless later on.
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[[Baffling End]]: If the format skews towards fast creature decks, this card will help you out.
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[[Song of Freyalise]]: I have a love/hate relationship with this card. On one hand it does everything this deck wants to do, help ramp out a big board, then run them over with a big and indestructible army. The only problem is that it takes two turns and is broadcasted, allowing them to respond easily.
[[]]
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[[Unbreakable Formation]]: Very powerful card that can either save our board from a wipe, or grow it for a big swing. This deck will always want some copies of this card.
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[[Prison Realm]]: Worse Oblivion Ring that scry's is still a good magic card.
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[[Conclave Tribunal]]: In a token deck like this Tribunal is often reads "Pay 1-2 mana exile any threat" which is exactly what we need in our removal slot.
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[[March of the Multitudes]]: The ultimate late game rebuilding tool/push for lethal. Sometimes I find this stuck in my hand for too long, but there is no doubt this is a powerful card.
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[[Karn's Bastion]]: A nice utility land that fits into a two color deck pretty easily. I love that it acts as a mana dump to keep the pressure on late game when you don't feel the need to extend even more on the board.
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Sample Deck
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G/W Proliferate
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Creatures: 22
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4 [[Pelt Collector]]
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4 [[Huatli's Raptor]]
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4 [[Growth-Chamber Guardian]]
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3 [[Emmara, Soul of the Accord]]
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2 [[Knight of Autumn]]
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4 [[Venerated Loxodon]]
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Enchantments: 8
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4 [[Legion's Landing]]
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4 [[Conclave Tribunal]]
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Instants: 2
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2 [[Unbreakable Formation]]
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Planeswalkers: 6
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2 [[Jiang Yanggu, Wildcrafter]]
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4 [[Ajani, the Greathearted]]
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Lands: 23
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4 [[Temple Garden]]
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4 [[Sunpetal Grove]]
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7 Plains
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6 Forest
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2 [[Karn's Bastion]]
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This is the list I have ended up on after quite a few changes. Originally I was much closer to mono white with lots of 1 drops that just swarmed the board, pumped them all with the planeswalkers and loxodon and swung in. What I found is that it was mostly just a more inconsistent version of mono white, so instead I decided what cards from the mono white package we could take over while offering a more token feel.
Once Huatli's Raptor was spoiled I was pretty excited to replace pollenbright druid with it and cement the deck into a more aggressive list that has game if we are forced to go long. With raptor in I knew that Pelt Collector would be a great 1 drop for the deck, and in testing the games where I curved from elf to raptor was very powerful.
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So far testing with my group against their various WAR brews, it has performed well. It was clear right off that bat that it was struggling with pure control decks like jeskai and esper while it excelled against the various creature based strategies. This lead to the sideboard being in constant flux over the past week, but in general I found myself skewing the board with more sticky threats and answers for the control matchup.
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Example Sideboard
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1 [[Knight of Autumn]]
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2 [[Shalai, Voice of Plenty]]
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2 [[Unbreakable Formation]]
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4 [[Adanto Vanguard]]
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1 [[Vivien Reid]]
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3 [[Baffling End]]
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2 [[Ajani, Adversary of Tyrants]]
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This is the list I ended up with after roughly 15 test matches, and for the most part I am happy with it. For an unknown meta it answers a few of our problem matchups, as well offers us protection from some more common cards in standard. Baffling End and Conclave come in against aggro and midrange decks that look to gum up the board to get in our way. Ajani is a value engine that gives us lots of game against control decks if we can slip it past their counters. On that same note I run the full 4 Adanto as a more sticky threat that red decks and control decks have to worry about. Knight and Shalai are both great against burn while knight also deals with the many enchantments that are played in standard right now.
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Well that's all I have for now, I know it's not exactly concrete testing and statistics, but against my group of solid players it was a highlight of our new brews. Let me know what you think or if you have any questions.
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*Edit\*
Took out the Hero package in favor of more consistency by upping my numbers and adding a generically good card in Knight of Autumn
submitted by Skyrian2 to spikes [link] [comments]

About ideologies and winning?

So previously a thing was written here, and this ended up arguably too long for a comment, so it's a post, and here we go.
Many years ago me and some friends played a bunch of Container. (I promise this will end up related.) The first game we didn't really know what we were doing or how the different parts fitted together, and it was a bit awful. We'd got attached to what we'd personally shipped to the island, each rejected auction was money leaving the system. Operations started to get tight, someone took out a loan, that removed even more money, and with our restricted options the endgame turned from "who is playing this game best?" instead into "who can do anything?"
In subsequent games we improved at making and accepting offers of goods arriving at the island, which massively adds money into the game system. Liquidity, or something, and the assorted parts just moved better, the economy clicked and whirred with products and margins. But even at the conclusion of the second game, I'd made a conscious change. I would no longer play Container, for Container is a game about maximising personal profit in comparison to your competitors. I would instead play to maximise goods delivered to the island, with my personal profit an explicitly secondary concern. This is a similar & compatible game, a semi-cooperative variant. It's played on the same board with other players who were playing Container, who might not even realise that I'm not. (I didn't tell anyone.) We all ended up individually strictly better off than the first game, myself included, even though I didn't "win at Container". Of course the fictional settlement on the island got more containers (though it's never clear if this means "brocolli", "iPhones", or "AK47s").
It's not an overly common thing to assess our personal behaviour as it relates to the function of the entire system. Indeed, Smith's Invisible Hand is that, under certain assumptions, the systemic benefit follows exactly from aggregated personal decisions. But there are already a couple of contexts where we're used to thinking like this. Jumping to mind is driving a car - "merge like a zip" etc - it's widely recognised that driving decisions that keep all the traffic evenly flowing are the best move. People already do evaluate their personal decisions with respect to their contributions to the overall system. Now we've outlined the behaviour and demonstrated existence, it's a conversation about contexts.
(I'm also aware I'm using "the system" a lot and this might get read as a defense of "the patriarchy". It's not. It's a general discussion of of the arrangement and mechanisms of society, which includes "the patriarchy" as one case, but also generally includes any other configuration that might replace it. It's a wide use of "all systems that might be" rather than "the system we have".)
The feeling was one of: if there is no God, and all we have is this brief time before oblivion, I can understand why someone, if they had the opportunity to take & hold onto the things they wanted, would do that.
Maybe, but there's a couple of things to mention here. The first is that this behaviour tells you about who the person really is. This is how someone behaves when they don't think they're being watched. But it might also be more complicated than that.
It might be that their whole lives have been built separating personally motivated behaviour and socially beneficial behaviour into two different conceptual baskets. That years of thinking in terms of "doing God's work" has reinforced motivations of actions done for God, even in some constructions by God through them. And that if the belief in God is undermined, that entire side of the decision framework could fall away. Perhaps less that they're only good people because God was watching, more that they never practiced making decisions for the benefit of all people because those same decisions got made for God.
The question as a Christian was always: How Now Shall We Live
That one is a weird one, because Heaven, the afterlife, etc, you'd expect a better question to be "how should we prepare for eternity?", but that's a small & tired point, moving on.
There is a part of me that thinks we can't all live so pluralistically, that there must be some common strands that bind us.
Maybe, but not necessarily. We know that monocultures are bad in agriculture, monopolies are bad for a market, and that single points of failure are bad engineering. Similarly I'd vaguely handwave that a monolith of uniform ideology is a bad idea lacking both resiliency and versatility. That there isn't necessarily a worldview "winning" by achieving ubiquity, but instead a continuation of "not losing" as contrasted to unfit worldviews that are shed from the catalogue of viable possibilities. Bye, Flat Earthers. Which is also in line with how science advances progression towards truth, but that's a very handwaved analogy.
I hadn't thought this next point was connected to the Container realisation, but maybe they are the same thing. In the last few years I haven't thought of evolution as a process that acts on individuals trying to maximise the well-being of their genes / offspring. Instead I think of it as an operation of entire population undertaking a distributed search for "utility" across the landscape of selection forces. It doesn't change any of the evidence or mechanisms, it changes where the moral judgements are attached (which isn't really part of the science anyway).
So instead of an evolutionary trait being "good" for an individual, those discoveries of local utility are a "good" thing for the population to explore - in a risk tolerant manner, since there's still a lot of diversity maintained. The population is the principal unit of analysis, as opposed to the individual, things are "good" or "bad" for the population as a whole as explored by some subset of individuals. Which makes a degree of sense for a/ any sexually reproducing species, where a limited gene pool is harmful and an isolated individual is an evolutionary terminus, and b/ for any group that forms larger social & economic structures, the wider population is vital. No man is an island, so I no longer think about evolution as an operation acting on an island, but instead tides around an archipelago (to misuse that metaphor).
But there I go again. Why should my humanism be your humanism?
Maybe it isn't. Maybe it's a better strategy for the population as a whole - both more effective, and more risk averse - to simultaneously pursue a number of different ideologies. If it's not something we're going to figure out for a decade or two, then yeah, hedge those bets and keep all the options open in different parts of of the distributed search. Yeah, we're handwaving from evolution as a distributed process over biological entities to a process over ideological frameworks, but so did Dawkins so it's probably fine. That's what memes are.
There are tangents in here that connect to both Tragedy Of The Commons, and also possibly to the Stakhanovites. In relation to concerns of the later, this isn't about pushing for productivity increases, instead about deciding what to produce for, to where the benefits should be directed. It's also not the case that things are done for "the system" at the expense of the individuals. The system is just the aggregate of individuals, and you're part of that. Capability is a vital component of agency. I didn't come last in Container, even when I wasn't playing Container. I still needed some resource base of my own to pursue my goals, even if those goals weren't the maximisation of that personal stash.
submitted by IDontLikeBeingRight to irirangi [link] [comments]

Victoria’s Secret: Have the Angels Fallen from Grace? (Interesting article on how the Epstein saga has affected the VS Brand)

Link to article
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Victoria’s Secret: Have the Angels Fallen from Grace?
by Dimitar Ganev | Oct 2, 2019
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Victoria’s Secret, the largest lingerie retailer in the US, has been one of the most iconic apparel brands since the 1990s, not least because its sexually charged imaging set the industry’s standard for decades and exerted a strong influence on body image norms. But since 2015, the shares of its parent company L Brands have been dropping as sales keep taking hits from shifting consumer tastes, executive turnovers and emerging competition.
The Victoria’s Secret brand, built on skinny girls and scantily clad lingerie, is now largely perceived as inadequate for a time when consumers’ preferences have moved away from sex appeal and towards empowerment, inclusiveness and comfort. To many, the brand’s traditional marketing strategy, which bets on fashion shows where supermodels walk in stiletto heels and angel wings, seems tone-deaf in the era of #MeToo, which condemns all forms of objectifying women and imposing hard-to-achieve beauty standards.
The Victoria’s Secret Angels, once considered symbols of sexiness, have now started to alienate consumers: a recent study found that 68% of them like the brand “less than they used to” and 60% feel that Victoria’s Secret is “forced” or “fake.” Demand for its products has cooled as up-and-coming rival brands have become more attractive by promoting themselves through unedited images featuring women of more diverse shapes and sizes. The retail giant reported that it will close 53 stores in North America this year, citing a “decline in performance.”
The brand itself admitted that it relied on hypersexualised imaging for far too long and it needs to rethink its identity. At L Brands‘ recent investor day, John Mehas, head of Victoria’s Secret Lingerie, asserted that the company needs to evolve and to reconnect with consumers by launching new products, hiring new executives and using new marketing strategies.
An essential part of the narrative shift would be a more diverse group of models, improving the merchandise, replacing the brand’s marketing chief and “rethinking” its annual Victoria’s Secret fashion show, the only fashion show regularly broadcast around the world, whose ratings keep falling. The brand hinted that network television would no longer be the “right fit” for the event, which has been criticised for being focused on empowering the models who walk in it instead of trying to relate to consumers.
Inclusivity, Diversity and Epstein
Many specialised fashion publications and business outlets embarked on questioning how the once-beloved brand managed to garner such a bad reputation. Analysing the media conversation around Victoria’s Secret in the top-tier English language publications from October 2018 to September 2019, we found that the most often discussed topics were body inclusivity, the company’s ties with Jeffrey Epstein and gender diversity:
The strongest coverage drivers for both the “Body inclusivity” and “LGBTQ+ diversity” topics were the comments which 71-year-old chief marketing officer Ed Razek made in a 2018 interview with Vogue that quickly went viral. Razek, who reportedly has final say over who’s in the televised fashion show, said that he didn’t think Victoria’s Secret‘s fashion event should include transgender or plus-size models because it is supposed to be “a fantasy”.
“Shouldn’t you have transsexuals in the show? No. No, I don’t think we should,” he said. “Well, why not? Because the show is a fantasy. It’s a 42-minute entertainment special. That’s what it is. It is the only one of its kind in the world, and any other fashion brand in the world would take it in a minute, including the competitors that are carping at us. And they carp at us because we’re the leader.”
The remarks prompted a strong backlash from consumers. As with the most severe social media crises, Victoria’s Secret was embroiled in an outrage cascade — outbursts of moral judgment which start to drive the conversation around brands, their products and their corporate messages. In these cases, the virality of moral judgements is facilitated by the fact that most of the content on social media feeds and timelines is sorted according to its likelihood to generate engagement.
The fact that fashion brands in particular face a growing number of crises could be explained by the supposition that fashion items are often taken to be markers of cultural and social identity, and thus are susceptible to be perceived as controversial across social networks. For instance, designers often draw inspiration from other cultures’ traditions, which has recently given rise to accusations of “cultural appropriation”.
Razek later used the company’s Twitter account to issue a formal apology, saying that his remark “came across as insensitive.”
In August 2019, Razek retired just days after the lingerie brand hired its first openly transgender model for its teen label PINK: Brazilian Valentina Sampaio. The hire was generally welcomed by commentators – for instance, Kendall Jenner, daughter of trans icon Caitlyn Jenner, posted “celebrate trans women” to her 98 million Instagram followers.
Meanwhile, media monitoring organisation GLAAD, which deals with lesbian, gay, bisexual and transgender issues, said Sampaio’s move comes as transgender people are becoming more visible in advertising. Examples of the trend include recent campaigns by Calvin Klein, Gap and H&M, while Playboy’s first transgender Playmate appeared in 2017.
Another strong coverage driver within the ‘Body inclusivity‘ topic was the protest outside Victoria’s Secret‘s store on Oxford Street in London, in which protesters stripped to their underwear and held signs demanding more diversity in fashion. To address such concerns, the latest investor meeting saw Victoria’s Secret deciding it will no longer rely on a small group of supermodels to promote its sexy lingerie, in a bid to use more inclusive marketing.
An example of this new strategy was an Instagram post of model Barbara Palvin, which was celebrated for being more body-inclusive, as social media users perceived Palvin to be curvier than the other supermodels. The post received over 780,000 likes in two days, generating 4.2 times the average number of likes, with users commenting that the model looks “normal” and “healthy”.
But the brand wasn’t that successful in managing another crisis: the widely publicised ties between L Brands founder Les Wexner and financier Jeffrey Epstein, an accused child sex trafficker who committed suicide in jail. Although Epstein didn’t actually work for Victoria’s Secret or L Brands, he had control over Wexner’s finances and personal life, according to reporting by The New York Times, and used his connections with Victoria’s Secret to facilitate his alleged crimes.
L Brands tried to distance itself from Epstein, saying it had cut ties with him nearly 12 years ago and disclosing that it had hired outside counsel to review the case. Wexner said: “Being taken advantage of by someone who was so sick, so cunning, so depraved, is something that I’m embarrassed that I was even close to. But that is in the past.”
In many media reports, the ‘Epstein ties‘ topic was closely related to the ‘Sexual harassment‘ topic, which was dominated by a petition urging Victoria’s Secret to take a stand against sexual harassment and violence. The open letter was addressed to Victoria’s Secret CEO John Mehas and signed by more than 100 models, many of whom have worked with the brand in the past, and also by the Model Alliance, an advocacy organisation in the fashion industry, and the Time’s Up movement against sexual harassment which was founded in response to the Weinstein effect and #MeToo.
The petition cited “numerous allegations of sexual assault, alleged rape, and sex trafficking of models and aspiring models”. Several of the company’s photographers have been accused of misconduct, on top of the links with Jeffrey Epstein. A Victoria’s Secret spokesperson said the firm has been in conversations with the Model Alliance “for some time”: “We are always concerned about the welfare of our models and want to continue to have dialogue with the Model Alliance and others to accomplish meaningful progress in the industry.”
Crisis mode
Ed Razek‘s aforementioned controversial comments regarding transgender and plus-size models made him the most often quoted spokesperson in the discussion around Victoria’s Secret:
Razek’s dominance in the conversation underlined the crisis of perception the brand suffers: his remarks were taken by many media outlets as a sign that the brand is unwilling to adapt to the current sociocultural climate. Models who have previously worked with the brand and who had a relatively large share of voice in the media conversation were quick to criticise him. For example. Karlie Kloss and Lily Aldridge posted a photo reading “Trans and GNC [gender non-conforming] people are not a debate” to their Instagram stories.
Karlie Kloss was one of the most vocal critics: she recently told Vogue that she had decided to terminate her relationship with Victoria’s Secret because the image was not “truly reflective” of who she was and the “kind of message I want to send to young women around the world about what it means to be beautiful.” Model Tess Holliday was harsher, leaving a message to Razek on Twitter following his Vogue interview: “Who needs VS anyway? They never supported plus ladies & now they are trying to dis my trans sisters? Hell nah. Kiss my fat ass, [Victoria’s Secret].”
The majority of media reports on Razek’s retirement announcement cited these remarks as one of the key points in his career and highlighted that he was one of the main figures in the highly sexualised beauty ideal put forth by the brand. The crisis of perception was also emphasised by the fact that L Brands CEO Les Wexner, another major corporate spokesperson in the conversation, was quoted primarily in relation to the Epstein scandal.
However, some of the spokespeople portrayed Victoria’s Secret in a positive light. Adriana Lima, one of the best-known Angels, quit the label after two decades and 18 fashion shows with the brand, sharing the news on Instagram with a heartfelt caption: “Dear Victoria, Thank you for showing me the world, sharing your secrets, and most importantly not just giving me wings but teaching me to fly.”
And while she presented the brand positively, some media publications reminded their readers of a an interview she gave to Grazia in 2011 in which she outlined the physical challenges she went through in order to be in shape, especially after her pregnancy.
Angel Behati Prinsloo tried to defend the Victoria’s Secret Fashion Show against the criticism for its lack of transgender models and diverse body types. In an interview with Elle, she explained what the show stands for: ‘There’s a lot of talk about everything but I think people need to also understand that it’s a show. It’s not saying negative or positive about any body type, it’s ‘this is who they are’.”
In the meantime, Barbara Palvin was named as a Victoria’s Secret Angel after the successful Instagram post which customers perceived to be more body-inclusive. She announced the news to fans also via Instagram and her hire was generally interpreted by the media as a sign that the label is finally starting to listen to its critics.
CEO John Mehas‘ comments about the brand’s marketing shift were met with similar enthusiasm, especially his plans to include messaging that responds to the #MeToo movement. But the most warmly welcomed move was the hire of Valentina Sampaio: although some publications suggested that the brand’s first openly transgender model came too late, most commentators said that the retailer has finally moved in the right direction.
Lingerie wars
While Victoria’s Secret is caught up in a fierce discussion, L Brands‘ other flagship label, Bath & Body Works, a personal-goods retailer, continues to report strong earnings, supporting its struggling parent. Many reports on Victoria’s Secret‘s controversial reputation outlined this development, making Bath & Body Works the most frequently mentioned brand in the conversation:
While L Brands is firmly focused on the Victoria’s Secret turnaround story, Bath & Body Work is perceived as staying relevant with updated stores and new product tests, maintaining a wholesome image as “America’s sweetheart of beauty brands.” Its loyal core consumer base of millennial women is boosted by fan blogs and YouTube accounts dedicated to sharing new products. The brand also plans to ramp up volume by having a digital makeover for the first time in India.
Investors have even started pressuring L Brands to make Bath & Body Works a standalone company which would not be associated with Victoria’s Secret. Hedge fund Barington Capital, whose CEO James A. Mitarotonda was one of the few corporate spokespeople in the conversation, sent a lengthy letter to L Brands CEO Les Wexner arguing for a spinoff.
But after Bath & Body Works posted its first unchanged quarter of store traffic in five years during 2019’s second quarter, Jefferies analyst Randal Konik suggested that the best days for the bath and candle retailer may be over. Konik also said that the teen brand PINK is the next sore spot for L Brands, with sales falling by low double digits in the fourth quarter, as the label is “without fans and rudderless.”
ThirdLove, American Eagle Outfitters and Savage X Fenty were identified as the main competitors which have capitalised on Victoria’s Secret’s reputational struggles. ThirdLove, an online bra startup which was launched in 2013, was perceived as coming head to head with Victoria’s Secret as it focuses on inclusive sizing and marketing, which have helped its annual sales to grow at a rate of 180% for the past four years.
The brand opened its first pop-up store in New York in July 2019, putting itself in direct competition with Victoria’s Secret as the lingerie giant had a store less than a 10 minutes’ walk away. ThirdLove also joined the discussion around Razek’s comments, taking out a full-page ad in The New York Times, in which co-founder and co-CEO Heidi Zak said she was appalled when she read them: “I’ve read and re-read the interview at least 20 times, and each time I read it I’m even angrier. How in 2018 can the CMO of any public company — let alone one that claims to be for women — make such shocking, derogatory statements?”
When asked whether Victoria’s Secret was worried its customers might now be looking for something different, Razek mentioned ThirdLove: “We’re nobody’s ThirdLove,” Razek said. “We’re their first love. And Victoria’s Secret has been women’s first love from the beginning.”
American Eagle Outfitters was also viewed as one of the main companies to break Victoria’s Secret‘s grip on the apparel industry by offering fitting bras and using messaging which pitches inclusiveness and comfort over sex appeal. Its activewear and lingerie brand Aerie has built an image of an “anti-Victoria’s Secret” label with untouched ads featuring models of all shapes and sizes. Kyle Andrew, American Eagle’s CMO, said the company’s success is due to its willingness to experiment and find ways to better listen to its teen customer base.
Rihanna’s Savage X Fenty recent show, streamed on Amazon Prime, has been making headlines everywhere, with commentators saying it was everything that Victoria’s Secret’s annual runway show wishes it could be by featuring models of all shapes, sizes, and ethnic backgrounds, with a clear focus on body inclusivity and acceptance.
Meanwhile, retail corporation Target also tried to capitalise on Victoria’s Secret’s struggles with a strategy similar to ThirdLove, American Eagle Outfitters and Savage X Fenty: it launched a new bra and underwear brand called Auden with a campaign featuring women “in all different shapes and sizes.”
Nike was mentioned as one of the brands which have gotten ahead of the curve with their socially-conscious marketing efforts featuring ex-NFL quarterback Colin Kaepernick, who had participated in racial justice demonstrations during national anthem ceremonies. Fast-fashion brand H&M got involved in the discussion for selling a $199 bra similar to Victoria’s Secret’s $1 million Fantasy Bra as part of its collaboration with Moschino.
Victoria’s Secret‘s reputational woos come at a time when the fashion and apparel industries occupy a central place in the extensively covered #MeToo movement and play a major role in ongoing media discussions around gender and identity. Since such issues naturally polarise consumers, brands which are dealing with products directly related to them are regularly caught up in fierce debates.
The growing importance of the debates around gender in the fashion industry has also been highlighted in the accelerating gender-neutral trend. The latest seasons have seen luxury brands like Gucci, Saint Laurent and Haider Ackerman combining menswear and womenswear runway shows, Others, such as Proenza Schouler and Rodarte, have started showing women’s pre-collections or women’s ready-to-wear during the back-to-back menswear and couture calendar. Meanwhile, fast-fashion labels such as Zara started releasing ungendered collections with models of both sexes dressed in the same clothes.
There are also a growing number of new brands like the Phluid Project, Agender and Rebrand which are built around the concept of non-binary dressing. Beyond fashion houses, the trend has also been recently reinforced by the Council of Fashion Designers of America (CFDA), which added a unisex/non-binary option for New York Fashion Week. Spokespeople for the CFDA explained that this decision came as a response to “a growing number of designers whose collections are not delineated by gender”, which “reflects the cultural momentum.”
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bet-hedging strategy evolution video

Bet-hedging theory addresses how individuals should optimize fitness in varying and unpredictable environments by sacrificing mean fitness to decrease variation in fitness. So far, three main bet-hedging strategies have been described: conservative bet-hedging (play it safe), diversified bet-hedging (don’t put all eggs in one basket) and adaptive coin flipping (choose a strategy at random from a fixed distribution). DiscussionUsing a finite population, we have confirmed the classical bet-hedging prediction that the optimum probability for employing a strategy is approximately equal to the probability that the strategy will be useful, provided the population size N is sufficiently large.When N < 2(s + 1)/(sθ), bet-hedging appears not to be favored, or to be favored so weakly that it can barely be detected The de novo evolution of bet hedging in experimental bacterial populations bet hedging — stochastic switching between phenotypes — can be an advantageous strategy. But how does bet hedging A bet hedging strategy can evolve by assuming that, evolution sets a boundary through the existence of an inverse proportionality between the exchanges of life between two worlds, The finding that selection acts to increase geometric-mean rather than arithmetic-mean fitness affects our understanding of trait optimality (because bet-hedging traits appear to be maladaptive over the short term), substantiates the idea that bet hedging should not be considered a ‘special case’ of evolution [31,32] and carries the corollary that persistence in the face of future environmental change may depend on bet hedging that has evolved in response to variable evolution of strategies that eliminate high variance in fitness (because of those occasional periods of especially low fitness), even for some degrees of cost in arithmetic mean fitness (the amount of cost required to counteract this selection depends on the magnitude of the variance being avoided by the bet-hedging strategy). Associate Professor Andrew Simons of Carleton University in Ottawa argues 'bet-hedging' is a neglected evolutionary strategy used by living organisms in general, to cope with changing environments. The evolution of bet-hedging adaptations to rare scenarios. Author links open overlay panel Oliver D. King a Joanna Masel b. Show more. Share. Here the fixation probability of a bet-hedging strategy is the probability that it replaces the resident strategy in a population, when it is originally held by a single individual. The evolutionary advantage of the bet-hedging strategy increases, the more drastically and unpredictably the environmental conditions change. Such risk-spreading mechanisms are, for example, known from bacterial pathogens: By varying their cell surfaces, genetically identical pathogen cells escape the human immune system. Here we report the de novo evolution of bet hedging in experimental bacterial populations. Bacteria were subjected to an environment that continually favoured new phenotypic states.

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