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

Real Assets Fund

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