Good Morning! Jamie Dimon spoke at Davos yesterday, calling the stock market inflated but finding a bright side to tariffs. He also noted he’s patched things up with Elon Musk, calling him the "Einstein of our time."

Musk, meanwhile, cast doubt on the Trump-backed Stargate project and sparred with Sam Altman on X: “They don’t actually have the money… SoftBank has well under $10B secured.” Microsoft CEO Satya Nadella replied, "All I know is, I'm good for my $80 billion."

Anti-DEI activists are targeting Goldman Sachs and JPMorgan over alleged shareholder risks. Meta has invested in Databricks, while Google is adding $1 billion to Anthropic.

Plus, family offices are paying executive assistants up to $190k/year, JetBlue will accept Venmo for flights, and 9 reasons you’re actually unhappy at work.

Home buyers (and investors) are lining up for BOXABL’s $60,000 home that’s built in a day. Don’t miss your chance to invest.

_{SQUEEZ OF THE DAY}

Hedge Funds Taking Half of Investment Gains

Only 15% of hedge funds have outperformed the S&P 500 over the past decade. But underperformance isn’t their only issue—hedge funds are also taking a staggering slice of their investors' profits.

A new report by LCH Investments reveals that hedge fund investors have surrendered 49% of their gross gains in fees over the past two decades, up from about 30% in earlier decades. The average fund outside the top 20 managers keeps 55.7% of gross gains, while since 1969, the industry overall has generated $3.7 trillion in total profits and charged investors $1.8 trillion in fees.

The standout performers, however, tell a different story. The top 20 funds, including Citadel, D.E. Shaw, and Millennium Management, collectively managed 20% of the industry’s assets but accounted for 32% of net gains in 2024.

These elite funds achieved asset-weighted returns of 13.1%, outperforming the broader industry average of 8.3%. Thanks to their higher performance, these funds charged lower fees relative to their returns, keeping just 34.3% of gross gains compared to the industry’s average of 55.7%.

Hedge funds are often associated with the traditional “two and 20” fee model—2% in annual management fees and 20% of performance gains. But this model has evolved, with many funds now incorporating “pass-through expenses.”

These expenses, which often range from 3-10% of assets annually, shift additional costs—like office rents, tech upgrades, and bonuses—onto investors, on top of performance fees that can reach 20-30% of profits.

The report also highlights how fee structures have evolved as the industry matured. In the 1960s and 1970s, management fees consumed less than 10% of gross gains. Today, management fees alone eat up nearly 30%, exacerbating investor frustration as returns diminish. Efforts to cut fees across the board have largely failed, with average costs creeping higher as performance has cooled.

Takeaway: The goal of hedge funds isn’t necessarily to outperform the market but to provide returns uncorrelated to market trends. Yet, with fees consuming 50% of gross gains, many investors are questioning if hedge funds are worth the cost. For those seeking meaningful returns, the top 20 managers seem to be the only reliable bet in an industry where fees continue to rise as returns cool.

_{PRESENTED BY BOXABL}

America’s Top Homebuilder Invests In “Off-Market” Disruptor

You must be doing something right if the biggest names in your industry take an interest.

That’s the story with BOXABL. They’ve rethought housing by bringing assembly lines to new home construction. Not to mention, the company has gained the attention of investors like D.R. Horton.

Where traditional homes take over 7 months to build, BOXABL factories can mass produce their signature Casita home in nearly four hours, plumbing, electrical, HVAC, and all. No wonder 190,000+ potential buyers already reserved one. And they’re just getting started.

Now, everyday investors can join them too. When BOXABL last opened a Reg A investment opportunity, they maxed out the $75M regulatory limit. Become an investor for just $0.80/share.*

_HEADLINES

Top Reads

• Overheard on Wall Street 2024 Annual Letter (SS)

• Jamie Dimon says the U.S. stock market is ‘kind of inflated’ (CNBC)

• Dimon argues tariffs are good for U.S. security (YF)

• Jamie Dimon calls Elon Musk the ‘Einstein’ of our time—said they reconciled and ‘hugged it out’ (AOL)

• Private equity mega-exits become more valuable amid slow investor payouts (YF)

• Musk undercuts Trump on Stargate AI investment announcement (CNBC)

• Saudi prince eyes $600B investment in US over next 4 years (Fox)

• Anti-DEI activists target Goldman Sachs and JPMorgan (WSJ)

• Meta backs Databricks as data analytics startup inches toward IPO (CNBC)

• Family offices are paying assistants up to $190k/year (CNBC)

• Inside JPMorgan, employee backlash over 5-day RTO mandate gains steam (YF)

• Banks play matchmakers in private credit shift (BB)

• Kalshi preparing to launch sports betting-like event contracts (Covers)

• ByteDance director says TikTok deal will get done (Axios)

• MrBeast not quite in the bidding race for TikTok just yet (AP)

• Goldman picks leaders to run Wall Street engines in revamp (YF)

• JetBlue accepting Venmo for flights (Fox)

• More than 7% of crypto users traded Trump's token (Axios)

_{CAPITAL PULSE}

Markets Rundown

Stocks Close Higher on Strength in Mega-Cap Tech

U.S. equity markets climbed on Wednesday, driven by gains in tech shares. The S&P 500 rose 0.6%, while the Nasdaq gained 1.3%.

The rally was fueled by President Donald Trump’s announcement of a joint venture between Oracle, ChatGPT, and SoftBank, pledging up to $500 billion in AI infrastructure investment over the next four years. 

Oracle shares jumped 7%, leading technology to be the top-performing sector. Meanwhile, Netflix reported record Q4 earnings and subscriber growth, sending its stock up nearly 10%.

Overseas, Asian markets were mixed, with Japan’s Nikkei rising 1.5%, while China’s markets dipped after Trump’s tariff comments. Bond yields edged higher, with the 10-year Treasury yield reaching 4.6%.

Corporate Earnings in the Spotlight

Earnings season continues to impress, with 12% of S&P 500 companies reporting so far. Profits are on track to grow by 12% year-over-year for Q4, supporting an annual growth rate of 9% for 2024.

Among reporting companies, 76% have beaten estimates, with an average upside surprise of nearly 8%.

Looking ahead, 2025 earnings are projected to grow by 15%, underpinned by a supportive economic backdrop. Given elevated valuations, robust earnings growth will be essential to sustaining the current bull market.

Broad Leadership in Early 2025

While it’s early, market leadership in 2025 has been broad-based. Cyclical sectors, including energy, industrials, and materials, have outperformed, while technology has slightly lagged.

This has also translated into value stocks leading gains, up 4.5% year-to-date, compared to a 2% rise for growth stocks.

Over the past two years, value stocks have underperformed due to weaker profit growth, but both styles are expected to see profits grow over 12% in 2025.

This balanced outlook strengthens the case for portfolio diversification, with opportunities in both growth- and value-style stocks.

Movers & Shakers

• (+) Netflix ($NFLX) +10% after raising monthly fees because of a record jump in new subscribers.

• (+) Oracle ($ORCL) +7% because of optimism on $500B Stargate deal.

• (–) Ford ($F) -4% after Barclays downgraded the automaker as earnings outlook deteriorates.

Private Dealmaking

• Anthropic, an AI startup, raised another $1 billion from Google

• Render, a cloud application company, raised $80 million

• Nelly, a digital medical practices startup, raised $52 million

• Vertice, a procurement spend management company, raised $50 million

• Eve, an AI legal platform, raised $47 million

• Bioptimus, a French foundational AI model developer, raised $41 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

The Psychology of Leadership

The Psychology of Leadership redefines the art of leading with a bold, innovative perspective rooted in cutting-edge research from positive, sports, and personality psychology.

This isn’t just another leadership book—it’s a transformative guide that combines science, storytelling, and practical wisdom to unlock the secrets of exceptional leadership.

Written with wit, warmth, and a conversational tone, The Psychology of Leadership takes readers on a journey through captivating real-life stories, actionable insights, and a touch of humor. It distills complex psychological principles into simple, powerful strategies that will help master the mental game of leadership.

Imagine possessing the ability to decode workplace personalities, uncover hidden motivations, and navigate group dynamics with ease. This book equips leaders with the tools to inspire their teams to achieve the extraordinary, sharpen their communication skills, and cultivate the art of listening and persuasion.

But it doesn’t stop there. Along the way, readers will also embark on a personal growth journey, building unshakable resilience and a mindset primed for success.

Whether for seasoned executives or emerging leaders, The Psychology of Leadership empowers leading with confidence, clarity, and impact—transforming not only organizations but also individuals.

“This book gets to the heart of what truly drives successful leadership: meaning, relationships, and a mindset focused on mastery.”

_{DAILY VISUAL}

Netflix Hits 300M Subscribers

_{PRESENTED BY MACABACUS}

Lightning Fast Pitch Decks, Flawless Tombstones

Building presentations shouldn’t take forever. Macabacus makes it easy to create professional slides:

• Seamless integration: Link your models and charts directly to branded slides—no more copy-paste headaches.

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Stop struggling with shapes, spacing, and formatting. Your time—and your work—deserve better.

Watch a pitch book transform in seconds.

_{DAILY ACUMEN}

Love Archetypes

Helen Fisher’s theory identifies four love archetypes—Explorer, Builder, Director, and Negotiator—each shaped by brain chemistry and hormones.

• Explorers (driven by dopamine) thrive on novelty and excitement. They often pair well with other Explorers for shared adventures or with Builders for grounding stability.

• Builders (driven by serotonin) value tradition and stability. They match best with other Builders for shared values or with Negotiators, who add emotional depth.

• Directors (driven by testosterone) are logical and decisive. They connect well with Negotiators, whose empathy balances their intensity.

• Negotiators (driven by estrogen) are empathetic and idealistic. They complement Directors for balance or Builders for reliability.

Understanding your archetype can help you navigate relationships and find greater compatibility.

_{ENLIGHTENMENT}

Short Squeez Picks

• 9 reasons you’re actually unhappy at work

• NYC named the best party town in the U.S.

• High-paying jobs that include room and board

• How to say no and not feel guilty 

_{MEME-A-PALOOZA}

Memes of the Day