David Rosenthal: uncertainty

Transcript context

…They’re going to keep attracting all the smartest people in the world. They’re going to have the ability to keep their incredibly unique culture. They’re not going to get tempted to let the business of institutional funds become the dominant business. Keep on keeping on is basically the bull case. Maybe that they’re actually still ahead. The bull case for the GP and LP stakeholders in Medallion, which is, I don’t know, 500 people in the world, and none of the rest of us can get any exposure to it. The bear case is things are changing. I think things are changing basically on any axis is the bear case for them. Things are changing where competitors are catching up, maybe. Maybe the fact that the tech industry has figured out these large language models, maybe that trickles into making it easier to compete with RenTech. It’s a blurry line, but it is plausible. Maybe RenTech actually was here a decade before everyone else, and now everyone else has arrived to the party. There are things that are changing maybe about their culture. Jim Simons has been gone for a long time. Bob Mercer is no longer a co-CEO. Peter Brown is a co-CEO and they just announced that they’re making the guy who was in charge of the institutional funds, David Lippe, is becoming a co-CEO as well. Maybe there’s a bear case around that, that someone from the institutional side of the house is becoming the current co-CEO, and maybe eventually CEO if you believe the Medallion is the special thing and the institutional funds are a blemish on the business. They’re the Hermès Apple watch strap in David’s parlance. Maybe that’s a bear case. Maybe there’s a bear case that their talent is becoming the same as everyone else’s talent. When you look on LinkedIn, I recognize a lot of the companies that people worked at, who are more junior at RenTech and in the past. I think it would’ve been all people just out of university research shops. I think if it’s true that they’re starting to see the same talent flow as everyone else, that would be concerning. These things are all narratives you can concoct and really no way to know if they’re true or not.…

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