{"id":689082,"date":"2026-10-19T13:10:00","date_gmt":"2026-10-19T13:10:00","guid":{"rendered":"https:\/\/buglecall.org\/?p=689082"},"modified":"2026-10-19T13:10:00","modified_gmt":"2026-10-19T13:10:00","slug":"hedge-fund-cio-by-the-time-these-things-are-glaringly-obvious-its-too-late-checkmate","status":"publish","type":"post","link":"https:\/\/buglecall.org\/?p=689082","title":{"rendered":"Hedge Fund CIO: “By The Time These Things Are Glaringly Obvious, It’s Too Late, Checkmate”"},"content":{"rendered":"

Hedge Fund CIO: “By The Time These Things Are Glaringly Obvious, It’s Too Late, Checkmate”<\/span><\/p>\n

\n

By Eric Peters, CIO of One River Asset Management<\/em><\/p>\n

Colosseums<\/strong><\/h2>\n

\u201cClassic late cycle<\/strong>,\u201d said Sparks. \u201cBeginning of the end, that\u2019s what\u2019s unfolding,\u201d said the investor, entrepreneur, iconoclast. \u201cAt the end, everything converges to financial flows.\u201d In every huge cycle, the last stage is Ponzi-like. \u201cWho\u2019s going to buy the last CDO? Who\u2019s going to buy the last CDO-squared? How do those securities even work? <\/strong>That\u2019s what happens in these cycles. The last securities to be issued are the most complex and hardest to understand. They\u2019re the riskiest,\u201d he said. \u201cThe cost of capital starts going up. This is how it always ends.\u201d<\/strong><\/p>\n

\u201cYou saw the Aussie data center IPO [here<\/a>] that failed this week, right?\u201d asked Sparks. \u201cIt\u2019s their neocloud equivalent, like CoreWeave, it\u2019s the type of sign we saw when the Bear Stearns hedge funds failed.\u201d Summer of 2007. \u201cSome of the marginal deals will not pencil anymore.\u201d And that slows the whole machine down. \u201cWhen that happens, investors go from the fear of missing out to the fear of holding the bag. That\u2019s a process, it doesn\u2019t happen overnight, but by the time these sorts of things are glaringly obvious, it\u2019s too late, checkmate.\u201d<\/strong><\/p>\n

\"\"<\/a><\/p>\n

\u201cWhen the process starts in earnest, it becomes self-fulfilling, irreversible,\u201d explained Sparks. \u201cThat\u2019s really the point in investing, finding processes that once set in motion lead to a predictable outcome.\u201d <\/strong>Even if the timing remains uncertain. \u201cSomeone buys a bond that funds a Meta data center. Now it\u2019s trading at 88 cents. And then you read Anthropic just offered Blackstone a yield of over 10% to fund its datacenter.\u201d Four months ago, Anthropic funded at 8.5%. \u201cSo, you take your loss and the bond volatility into account, and you\u2019re not eager to buy.\u201d\u00a0<\/p>\n

\u201cThese dynamics slow the flywheel,\u201d continued Sparks. \u201cThe greater fool theory starts to reverse and self-perpetuates<\/strong>.\u201d I nodded. \u201cEveryone wants to know exactly when it will fall,\u201d he said. \u201cOn some level it doesn\u2019t really matter, because once the process starts, you pretty much know stocks won\u2019t massively blow through the highs.\u201d The rough ceiling on the market is in place. \u201cYou don\u2019t have to worry about the FOMO move that rips 30% higher and makes you look foolish. So, instead, you can build a portfolio for the sacking and looting ahead.\u201d\u00a0<\/strong><\/p>\n

\u201cOnce the cost of capital rises for the weaker players, you crack the hidden pillars supporting the edifice<\/strong>,\u201d said Sparks. \u201cIt\u2019s like removing the little fasteners holding the structure together.\u201d The Roman Colosseum flashed through my mind, its structure originally secured by 300 metric tons of iron clamps. But after Rome fell, thieves stole the metal<\/a>, which in turn weakened the arena, and it succumbed to earthquakes. \u201cThat\u2019s why a major top is a process, it takes time to undermine the structure. And it all ends when the Generals are killed.\u201d<\/strong><\/p>\n

Anecdote<\/strong>\u00a0<\/p>\n

\u201cWhat do you want to accomplish in capitalism?\u201d asked Sparks, not waiting for a response. \u201cYou want to spend as little money as possible to create the biggest monopoly you can. That\u2019s literally all you want to do. Nothing more.\u201d<\/p>\n

Fair point. \u201cYou can talk about adoption and demand curves all you want, and it\u2019s not that they\u2019re unimportant, but they tell you less about whether you have a good business and more about the size of your net worth as a monopolist.\u201d<\/p>\n

Owning a big monopoly is better than a small one but having a baby monopoly is better than running a big business in a fiercely competitive industry with razor thin margins. \u201cEveryone loves Amazon, but if you strip out its AWS and advertising businesses, it\u2019s really just a retailer and logistics company, and those are generally low margin, capital intensive businesses,\u201d he said.<\/p>\n

\u201cAnd yes, there are some elements of Amazon retail that are monopolistic but compare it to Google – that\u2019s a real monopoly, with massive margins.\u201d Amazon\u2019s retail business is probably worth roughly the same as Walmart at $1trln. Google is worth $4trln. \u201cSo what will these AI companies look like on the other side of this rapid build out?\u201d Amazon retail or Google?<\/p>\n

\u201cEven if you make the argument that everything in our economy will eventually be turned into AI tokens in one form or another, so that token demand will be explosive, why do you think that the frontier labs will be the real beneficiaries<\/strong>?\u201d asked Sparks. \u201cFrom the days when we first commercialized electricity to today, global usage has exploded. But owning utilities has not been the way to make your fortune.\u201d Indeed.<\/p>\n

\u201cThe nature of this technology and the transformation of electricity into tokens looks a lot more like the utilities than something that will manifest into durable monopolies. And I think that as this cycle matures, if we survive as a species, we\u2019ll find that the real beneficiaries will be the users of tokens, not the AI companies that manufacture them.\u201d\u00a0<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 10\/19\/2026 – 09:10<\/span><\/p>","protected":false},"excerpt":{"rendered":"

Hedge Fund CIO: “By The Time These Things Are Glaringly Obvious, It’s Too Late, Checkmate” By Eric Peters, CIO of One River Asset Management Colosseums \u201cClassic late cycle,\u201d said Sparks. \u201cBeginning of the end, that\u2019s what\u2019s unfolding,\u201d said the investor, entrepreneur, iconoclast. \u201cAt the end, everything converges to financial flows.\u201d In every huge cycle, the… Continue reading Hedge Fund CIO: “By The Time These Things Are Glaringly Obvious, It’s Too Late, Checkmate”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[17,22,13],"tags":[],"class_list":["post-689082","post","type-post","status-publish","format-standard","hentry","category-border-security","category-immigration","category-immigration-reform","entry"],"_links":{"self":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/689082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=689082"}],"version-history":[{"count":0,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/689082\/revisions"}],"wp:attachment":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=689082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=689082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=689082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}