Book Review — Going Infinite: The Rise and Fall of a New Tycoon

SL Advisors Talks Markets
SL Advisors Talks Markets
Book Review -- Going Infinite: The Rise and Fall of a New Tycoon


I listed to the audio version of Going Infinite by Michael Lewis on a recent road trip visiting clients. If you’re planning to drive from Washington DC to Columbia, SC and then on to Charleston, you’ll find that the book and travel time are nicely synchronized. It’s always better when the author does the reading. Listening to Lewis’s soft New Orleans accent is no hardship.

Michael Lewis set out to write a book about a new wunderkind making billions out of crypto while planning to give most of it away. The collapse of crypto exchange FTX and subsequent arrest of Sam Bankman-Fried (known as SBF) provided Lewis with a ringside seat as the whole edifice collapsed.

Had SBF not been arrested, he would have provided ready comparisons with Elon Musk, whose highly readable biography by Walter Isaacson was published just a month earlier. Both combine very high intellect with low emotional intelligence and have little patience for the type of human interaction most of us find normal. We’re told that greatness justifies such shortcomings. Steve Jobs, about whom Isaacson also wrote a biography, shared this trait.

Early in his career SBF worked at Jane Street, a secretive Wall Street market maker where trainees routinely bet on obscure outcomes (how many dice are in my pocket) so as to demonstrate mental acuity and probabilistic risk assessment to the senior traders. What looks like a mispriced security can be a trap set by inside information or at least factors that should have been considered. Why you’re being asked to guess the number of dice is as important as estimating the figure. Maybe I have a hundred very small ones. Markets are as much poker as chess.

I once visited Jane Street whose trading room is filled with software engineers. When I was hiring traders 25 years ago at JPMorgan we favored MBAs – I used to joke that my own resume would never have drawn an interview. Jane Street expects their traders to focus their time on research projects, discovering market relationships that can be exploited with software. The actual trading is run by algorithms and traders watch over it while doing analysis.

While at Jane Street, SBF oversaw a trade designed to profit from analyzing the presidential election results in 2016 faster than anyone else. They identified Trump’s surprising victory early and sold stocks before they dropped, only to see initial profits turn into Jane Street’s biggest ever loss as markets shrugged off the news. There was apparently little of consequence, but SBF soon left anyway to pursue crypto.

Effective altruism is a philosophy that believes your maximum benefit to society comes from selecting the career with the highest expected earnings and donating as much as possible to worthy causes. SBF initially partnered with others who shared this belief, and before long the media was attracted to this quirky young man with wild black curly hair worth tens of billions of dollars that he planned to give away.

FTX attracted some of the world’s most sophisticated investors, unperturbed by SBF’s habit of playing video games while conducting video calls with people who might expect to command his full attention. Their Bahamas campus sounds like a big fraternity with unlimited funding. They had no CFO, and apparently little sense of risk.

I’ve never found bitcoin or the rest of the crypto market to be of interest. It’s struck me as a solution to a problem we don’t have. It’s not a stable store of value and not safe from hackers stealing your coins. The authorities rarely pursue such thefts because they’re hard to trace and jurisdiction is often unclear. And yet if the authorities want to seize your stash they can, as happened when Colonial Pipeline paid a ransomware demand after being hacked. The FBI retrieved the payment. So I could never see the point. But others evidently could.

It can be no coincidence that the book’s publication coincided with SBF’s trial, since it offers a coincident recollection of events being pieced together in front of a jury.

In reading SBF’s biography you know it ends with his deportation from the Bahamas to face US criminal charges. In looking for clues along the way you’ll find none. Lewis, who is an astute observer of his subjects, draws an intimate portrait of his subject but is unable to see SBF’s world as he does. Ultimately, he was as surprised as the rest of the outsiders when FTX collapsed, and like them will be following the trial hoping for an answer to the question, Why?

We have three have funds that seek to profit from this environment:

Energy Mutual Fund

Energy ETF

Inflation Fund


Print Friendly, PDF & Email
SL Advisors Talks Markets
SL Advisors Talks Markets
Book Review -- Going Infinite: The Rise and Fall of a New Tycoon

Important Disclosures

The information provided is for informational purposes only and investors should determine for themselves whether a particular service, security or product is suitable for their investment needs. The information contained herein is not complete, may not be current, is subject to change, and is subject to, and qualified in its entirety by, the more complete disclosures, risk factors and other terms that are contained in the disclosure, prospectus, and offering. Certain information herein has been obtained from third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed. No representation is made with respect to the accuracy,  completeness or timeliness of this information. Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments.  Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

References to indexes and benchmarks are hypothetical illustrations of aggregate returns and do not reflect the performance of any actual investment. Investors cannot invest in an index and do not reflect the deduction of the advisor’s fees or other trading expenses. There can be no assurance that current investments will be profitable. Actual realized returns will depend on, among other factors, the value of assets and market conditions at the time of disposition, any related transaction costs, and the timing of the purchase. Indexes and benchmarks may not directly correlate or only partially relate to portfolios managed by SL Advisors as they have different underlying investments and may use different strategies or have different objectives than portfolios managed by SL Advisors (e.g. The Alerian index is a group MLP securities in the oil and gas industries. Portfolios may not include the same investments that are included in the Alerian Index. The S & P Index does not directly relate to investment strategies managed by SL Advisers.)

This site may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involves a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of SL Advisors LLC or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made. r

Certain hyperlinks or referenced websites on the Site, if any, are for your convenience and forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with SL Advisors LLC with respect to any linked site or its sponsor, unless expressly stated by SL Advisors LLC. Any such information, products or sites have not necessarily been reviewed by SL Advisors LLC and are provided or maintained by third parties over whom SL Advisors LLC exercise no control. SL Advisors LLC expressly disclaim any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites.

All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be suitable or profitable for a client’s investment portfolio.

Past performance of the American Energy Independence Index is not indicative of future returns.

Print Friendly, PDF & Email
0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.