🍋 Poker Room to Trading Floor

A Wall Street powerhouse training its new traders with 100 hours of poker.

Author

Short Squeez
October 11, 2024

Together With

"People pay to see others believe in themselves." — Kim Gordon

Good Morning and Happy Friday! TD Bank officially pleaded guilty in a money laundering case, admitting it failed to stop a massive Ponzi scheme. CPI came in at 2.4%, higher than expected but still the lowest since February 2021. Elon Musk unveiled a driverless Robotaxi priced under $30K. AMD launched an AI chip to compete with Nvidia’s Blackwell, and OpenAI is projected to face losses of $14 billion by 2026.

Plus, tennis legend Rafael Nadal announced his retirement, Mark Cuban reportedly ran a Ponzi scheme in college to help cover his tuition, and Tom Brady’s workout that keeps him in shape at 47.

Ready to shape the future of smart living? Invest in RYSE today.

SQUEEZ OF THE DAY

Poker Room to Trading Floor

If you’ve ever wanted to be a trader at Susquehanna International, you better brush up on your poker skills. 

New traders at the firm spend over 100 hours playing poker during their 10-week training program. Susquehanna even has its own poker room. But it’s more than just a quirky training ritual – the firm believes poker teaches more about Wall Street (and life) than any finance textbook ever could.

Susquehanna says the skills honed at the poker table – like taking calculated risks, making decisions with incomplete information, and staying calm under pressure – are exactly what set elite traders apart from the rest.

The firm's annual poker tournament, held this past Saturday, October 5th, drew thousands of employees battling it out. Some have even taken their skills to Las Vegas and walked away with big prizes.

Susquehanna trades just about everything, from stocks to sports, even predicting whether Taylor Swift will remain the top artist on Spotify.

“We aim to be in as many markets as possible. We believe the decisions we make at the poker table translate directly to finance,” says Todd Simkin of Susquehanna.

Susquehanna, which invests only its own money, not clients’, is an industry giant. In 2023, it handled more than 22% of all U.S. equity-derivatives trades.

Takeaway: At Susquehanna, poker is more than a pastime – it’s part of the firm’s origin story. Founded by poker enthusiasts from SUNY Binghamton, they may be onto something. A 2019 study found that hedge fund managers who excel at poker often report better investment returns. And a recent study showing employees at firms like Susquehanna making three times what Goldman Sachs traders earn, it may be worth picking up the hobby.

PRESENTED BY RYSE

Missed Investing in RYSE? You Have Another Chance

RYSE is on the cusp of making automated smart shades a staple. And if you missed investing in their company, you have another chance.

Along with their recent launch in Best Buy retail stores, they’ve just opened a new public offering. You can invest in their company at just $1.75/share.

Best Buy has a knack for picking the up-and-coming tech products that go on to dominate the market. Their early bets on household items like Ring (acquired by Amazon for $1.2B) and Nest (acquired by Google for $3.2B) have a proven record of paying off. 

And now, they’re lifting the curtain on their latest find, launching RYSE’s SmartShades in over 120 retail stores. RYSE has already hit $8M+ in lifetime revenue with over 40,000 units sold, and the numbers are rising (along with the window shades). 

RYSE shareholders have seen their value increase 40% year-over-year, with strong upside remaining as the smart home industry continues its projected double-digit growth until 2033.

HEADLINES

Top Reads

  • TD Bank pleads guilty in DOJ money laundering case (Axios)

  • OpenAI losses could hit $14B in 2026 (TI)

  • Elon Musk hypes $30,000 Tesla self-driving Cybercab (CNBC)

  • Inflation falls to 2.4%, lowest in three years (Axios)

  • Is private equity out of control? (Guardian)

  • Social Security checks to rise 2.5% (AP)

  • AMD launches AI chip to rival Nvidia’s Blackwell (CNBC)

  • CPI bolsters hawkish view that Fed rate cuts need to be gradual (YF)

  • What September’s mixed inflation news means for the Fed (MS)

  • Private equity follows diverging paths with insurers (WSJ)

  • Rafael Nadal announces retirement from tennis (CNN)

  • Mark Cuban says he once ran a Ponzi scheme to pay his tuition (YF)

CAPITAL PULSE

Markets Rundown

Market Commentary

Stocks close lower on inflation report: U.S. equity markets declined on Thursday following the release of mixed inflation data. Small- and mid-cap stocks underperformed compared to large caps, and while most sectors traded lower, energy and materials stocks managed to gain ground. Bond yields rose, with the 10-year Treasury yield nearing 4.07%.

On the global front, Asia saw gains, while Europe ended the day lower. Meanwhile, the U.S. dollar declined against major currencies. In commodities, WTI oil rose on concerns about supply disruptions in the Middle East, and gold also moved higher.

Key inflation measures mixed: The consumer price index (CPI) fell slightly to 2.4% year-over-year in August, higher than expectations of 2.3%, but still the lowest since February 2021. However, core CPI (which excludes food and energy) edged up to 3.3%, above expectations of 3.2%. Shelter inflation continued to decline but remained elevated at 4.9%, contributing heavily to core inflation.

These mixed signals indicate inflation is gradually easing, though at a slower pace than expected. This should keep the Federal Reserve on track for its rate-cutting plans, although the process will likely be gradual.

Jobless claims rise: Jobless claims rose to 258,000, surpassing the forecast of 229,000. While this suggests some cooling in the labor market, it is consistent with the idea of a "soft landing" for the U.S. economy, rather than an abrupt downturn. The cooling job market is also expected to help slow wage gains, which could contribute to easing inflation in the services sector.

Movers & Shakers

  • (+) GXO Logistics ($GXO) +14% because the logistics company is exploring a sale.

  • (+) Celsius Holdings ($CELH) +14% after analysts are bullish after trade show buzz.

  • (–) First Solar ($FSLR) -9% after Jefferies cut its price target.

Private Dealmaking

  • Form Energy, a battery developer, raised $405 million

  • EvenUp, an AI solutions provider, raised $135 million

  • Gropyus, an Austrian robotic startup, raised $108 million

  • ShiraTronics, a neurostimulation therapies developer, raised $66 million

  • Basecamp Research, a generative AI biology startup, raised $60 million

  • TrueLayer, a pay-by-bank network, raised $50 million 

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

NEIGHBORHOOD WATCH

Real Estate Digest

After a stronger-than-expected jobs report, interest rates experienced their biggest one-week jump since April. Despite the rate hike, the market's momentum remains strong, with more buyers seeking pre-approvals and a 12% year-over-year increase in new listings nationwide. The rise in rates reflects changing expectations rather than any weakness in the economy, which has remained robust throughout the year.

Latest News

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BOOK OF THE DAY

What I Learned About Investing From Darwin

The investment profession is in a state of crisis. The vast majority of equity fund managers are unable to beat the market over the long term, which has led to massive outflows from active funds to passive funds. Where should investors turn in search of a new approach?

Pulak Prasad offers a philosophy of patient long-term investing based on an unexpected source: evolutionary biology. He draws key lessons from core Darwinian concepts, mixing vivid examples from the natural world with compelling stories of good and bad investing decisions―including his own.

How can bumblebees’ survival strategies help us accept that we might miss out on Tesla? What does an experiment in breeding tame foxes reveal about the traits of successful businesses? Why might a small frog’s mimicry of the croak of a larger rival shed light on the signs of corporate dishonesty?

Informed by successful evolutionary strategies, Prasad outlines his counterintuitive principles for long-term gain. He provides three mantras of investing: Avoid big risks; buy high quality at a fair price; and don’t be lazy―be very lazy.

Prasad makes a persuasive case for a strategy that rules out the vast majority of investment opportunities and advocates permanently owning high-quality businesses.

Combining punchy prose and practical insight, What I Learned About Investing from Darwin reveals why evolutionary biology can help fund managers become better at their craft.

“Packed with practical insights from nature, it offers a refreshing approach to outsmart the markets.”

DAILY VISUAL

Annual Change in Consumer Price Index

Jan 2019 to Sept 2024

Source: Axios

PRESENTED BY PERCENT

Safe Haven From Volatility? Private Credit May Be The Answer

Election years typically come with market turbulence. Where can investors shield their portfolio from high volatility? The answer may lie in private credit.

Private credit involves lenders working directly with borrowers to negotiate and originate privately held loans not traded in public markets. That means it’s less correlated to and less impacted by public market downturns:

For individual accredited investors, Percent offers one of the best ways to access and invest in private credit with minimums starting at $500:

  • Proven Performance: Average annual net returns of 14%+ and over $1 billion in deals funded

  • Low Minimums, Shorter Deal Terms: The average deal term is just 9 months with a minimum investment of $500. 

  • Investment Flexibility: Choose between individual deals or a Blended Note for automated diversification across multiple deals.

The $2T private credit market continues to heat up as institutional investors have sought out its benefits: strong yield potential, diversification and income from contractual cash flows. It’s also out-performed in today’s high interest rate environment, with higher returns and lower volatility compared to high-yield bonds and leveraged loans. 

DAILY ACUMEN

Antidote to Aging

If you’re looking for the fountain of youth, science suggests that movement might be the closest thing we have.

Exercise is often considered the number one antidote to aging—not just because it keeps our bodies in shape, but because it helps maintain our brains, our mood, and our overall vitality.

Studies consistently show that regular physical activity can slow cellular aging, reduce the risk of cognitive decline, and even improve mood by releasing feel-good endorphins.

Exercise doesn’t have to be extreme to be effective. Whether it’s a brisk walk, dancing, swimming, or yoga, any form of movement helps maintain flexibility, balance, and cardiovascular health, all of which are crucial as we age.

Physical activity also encourages better sleep, stronger immune function, and social connections—all key ingredients for aging well.

The secret to staying young isn’t about expensive treatments or supplements; it’s about creating a habit of consistent movement.

So today, make it a point to move your body in any way you enjoy. Remember, the key to youthful energy and longevity lies in staying active, no matter your age.

ENLIGHTENMENT

Short Squeez Picks

  • How to keep learning at work even when you feel fried

  • Common regrets people have at the end of their lives

  • Tom Brady’s workout that keeps him in shape at 47

  • The rise and fall of NYC clubbing

  • The neuroscience of using the other person’s name in a conversation 

MEME-A-PALOOZA

Memes of the Day

 

 

 

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