Sam Bankman-Fried Has a Savior Complex—And Maybe You Should Too(web.archive.org)
web.archive.org
Sam Bankman-Fried Has a Savior Complex—And Maybe You Should Too
https://web.archive.org/web/20220922164619/https://www.sequoiacap.com/article/sam-bankman-fried-spotlight/
33 comments
Sam was found to be playing League of Legends while on a call w/ investors at Sequoia for a $1B financing round. Their response was to declare him a genius, as clearly only a genius would be playing video games while in a $B business meeting.
These are the monied investment class showing their true skillset, which is mostly limited to "being rich".
These are the monied investment class showing their true skillset, which is mostly limited to "being rich".
Hmm, Now this has me confused, should I seek consultation for possible Adhd or just declare myself a genius and be done.
Do you have a lot of money and/or familial connection to high places? Depends really on that answer.
> Do you have a lot of money and/or familial connection to high places? Depends really on that answer.
Which is what matters most in that equation (see Bezos, Musk, Zuckerburg et al), I mentioned to some people in our circles that I honestly thought this guy was going to end up in rendition black-site when he announced he was going to start getting into political donations/lobbying.
The State doesn't take this kind of stuff lightly, and using his distorted perception of alturism made him a massive target, but when someone listed all his family connections and links to academia and government I realized that he was just another insider cosplaying at being a 'disruptor' like most of the valley does.
Honestly, he should be rotting in a cell working manual labour next to the woman's prison Elizabeth Holmes will be and sharing a cell with Sunny if there is any justice, but I fear they will get a light sentence and some years on house arrest and will end with early releases and probation given how things turn out for their tier of the legal system. One of the guys on his board from complianace ran a scam on online poker a decade before [0] and this was all kosher.
0: https://www.poker.org/ftx-collapse-tether-operations-have-li...
Which is what matters most in that equation (see Bezos, Musk, Zuckerburg et al), I mentioned to some people in our circles that I honestly thought this guy was going to end up in rendition black-site when he announced he was going to start getting into political donations/lobbying.
The State doesn't take this kind of stuff lightly, and using his distorted perception of alturism made him a massive target, but when someone listed all his family connections and links to academia and government I realized that he was just another insider cosplaying at being a 'disruptor' like most of the valley does.
Honestly, he should be rotting in a cell working manual labour next to the woman's prison Elizabeth Holmes will be and sharing a cell with Sunny if there is any justice, but I fear they will get a light sentence and some years on house arrest and will end with early releases and probation given how things turn out for their tier of the legal system. One of the guys on his board from complianace ran a scam on online poker a decade before [0] and this was all kosher.
0: https://www.poker.org/ftx-collapse-tether-operations-have-li...
Not OP, but when I went through a manic episode at the start of the pandemic and believed myself to be near invincible I certainly thought I did.
in a world of privatized losses they would be rich for 3 generations at best, Vanderbilt style.
To me, SBF embodied the worst stereotypes about the Effective Altruism movement. The not-so-subtle air of I'm-smarter-than-thou, the hubris to think whatever they have thought of haven't been thought and dismissed by others (probably for good reason), and a bull-headed focus on risk and return that can be exactly quantified, to the point of ignoring other, "softer" sides of the issue. Until I see stronger denouncements of SBF (and not just for getting caught, but for the scheming) from within the Effective Altruism community, I don't think I can take them quite seriously anymore.
SBF isn't alone in this. In school, while interning for a competing hedge fund, I met a drove of Jane Street interns who thought exactly the same way, in terms of "EV" or expected value -- the mean outcome from a random event. For example, whenever we would go out for ice cream, they would try to flip a coin to see who pays, given the "expected cost" was same. This behavior is fine if you're a market maker betting 0.001% of your worth on a toss that you win 51% of the time, and I imagine this is why Jane Street tries to cultivate it. But unfortunately, in this hyperfocus on returns, they forgot that "risk"/"variance" exists, and sometimes flipping a coin will land you in such a deep hole that you can't continue to play the game long enough to dig yourself out of there.
SBF isn't alone in this. In school, while interning for a competing hedge fund, I met a drove of Jane Street interns who thought exactly the same way, in terms of "EV" or expected value -- the mean outcome from a random event. For example, whenever we would go out for ice cream, they would try to flip a coin to see who pays, given the "expected cost" was same. This behavior is fine if you're a market maker betting 0.001% of your worth on a toss that you win 51% of the time, and I imagine this is why Jane Street tries to cultivate it. But unfortunately, in this hyperfocus on returns, they forgot that "risk"/"variance" exists, and sometimes flipping a coin will land you in such a deep hole that you can't continue to play the game long enough to dig yourself out of there.
> within the Effective Altruism community, I don't think I can take them quite seriously anymore.
Having been involved with environmental activism and Bitcoin stuff for over a decade you see these types show up every now and then, often just for photo-ops and a self-gratifying projection of themselves in whatever will satisfy thier own ego trip. Honestly, these types are one of the biggest impediments to progress in these movements, they're so disillusional and siphon off much needed capital into these projects that ultimately leave everyone who might have cared at one point entirely apathetic (like you) to the plights and causes because they got burned from one of them.
I think true altruism is an incredibly rare virtue, and subsequently a much needed one in the World at that, but it's often from a source of genuine personal pain and suffering that allows you to recall and thus empathize with someone who is/has gone through similar difficulties you've been through. To that end, I find it impossible for SBF to truly have a sense of self-awareness to realize how toxic and blatantly counter-productive he is and will likely be remembered as in both EA and in The Crypto community.
Karpales was persona non-grata for nearly decade for MTGOX, but at least he did a mea culpa and served time in prison and sadly had his personal life destroyed as a result of his scam. I fear SBF will not face much given his connections and involvement in US politics via donations as well as his family, and THAT shows the hypocrisy of these sorts of people.
Having been involved with environmental activism and Bitcoin stuff for over a decade you see these types show up every now and then, often just for photo-ops and a self-gratifying projection of themselves in whatever will satisfy thier own ego trip. Honestly, these types are one of the biggest impediments to progress in these movements, they're so disillusional and siphon off much needed capital into these projects that ultimately leave everyone who might have cared at one point entirely apathetic (like you) to the plights and causes because they got burned from one of them.
I think true altruism is an incredibly rare virtue, and subsequently a much needed one in the World at that, but it's often from a source of genuine personal pain and suffering that allows you to recall and thus empathize with someone who is/has gone through similar difficulties you've been through. To that end, I find it impossible for SBF to truly have a sense of self-awareness to realize how toxic and blatantly counter-productive he is and will likely be remembered as in both EA and in The Crypto community.
Karpales was persona non-grata for nearly decade for MTGOX, but at least he did a mea culpa and served time in prison and sadly had his personal life destroyed as a result of his scam. I fear SBF will not face much given his connections and involvement in US politics via donations as well as his family, and THAT shows the hypocrisy of these sorts of people.
> I met a drove of Jane Street interns who thought exactly the same way, in terms of "EV" or expected value
It's interesting that you say that. When I read the article claiming that a trader should be neutral between $50 and $100 with 50%, I saw that as an oversimplification for dramatic effect. But what you describe seems like they actually thought like that, which strikes me as bizarre. If you lose your entire budget, it doesn't matter that your winning probability was >50%, so you should always adjust the size of your bets to the size of your budget. While it practically doesn't matter, of course, when people on 6-digit salaries gamble over $10 ice cream, it makes a difference in principle (and the whole purpose of the exercise seems to have been to instil a principle). I'd have expected them to drill their interns on some variation of a Kelly criterion.
It's interesting that you say that. When I read the article claiming that a trader should be neutral between $50 and $100 with 50%, I saw that as an oversimplification for dramatic effect. But what you describe seems like they actually thought like that, which strikes me as bizarre. If you lose your entire budget, it doesn't matter that your winning probability was >50%, so you should always adjust the size of your bets to the size of your budget. While it practically doesn't matter, of course, when people on 6-digit salaries gamble over $10 ice cream, it makes a difference in principle (and the whole purpose of the exercise seems to have been to instil a principle). I'd have expected them to drill their interns on some variation of a Kelly criterion.
While Kelly style analysis makes sense for investors like Buffet or Dalio, who bet a significant portions of their wealth on certain positions, for Jane Street it doesn't make much sense. That is because Jane Street makes most of their money in millions of really small trades either in market making, arbitraging, or front-running other trades every day. For these, every trade, profitable or not, is necessarily a miniscule portion of their capital.
Good to remember that the business that blew up in SBF's face was Alameda the prop trading desk, and not FTX, the exchange and the market maker. Seems like he did learn his lessons in EV well, it just wasn't good enough for bets over a certain size.
Good to remember that the business that blew up in SBF's face was Alameda the prop trading desk, and not FTX, the exchange and the market maker. Seems like he did learn his lessons in EV well, it just wasn't good enough for bets over a certain size.
Haha, well it seems that overlooking the ruin probability is exactly what was missing from both SBF's effective altruism 'life calculus', as well as the risk management in his fund. It appears that he really inhaled the EV thinking that he learnt at Jane Street and took it to the extreme - and the outcome was exactly what basic stochastic process theory would have predicted.
That was really insightful, thanks for sharing that anecdote! The whole story would be worthy of a Greek tragedy - rise and fall of a kid blessed with an almost supernatural gift, with just a tiny yet catastrophic flaw - the proverbial Achilles heel.
That was really insightful, thanks for sharing that anecdote! The whole story would be worthy of a Greek tragedy - rise and fall of a kid blessed with an almost supernatural gift, with just a tiny yet catastrophic flaw - the proverbial Achilles heel.
"supernatural gift"? He's probably smart, at least that's what his MIT degree would tend to show.. but supernatural because he took advantage of the price difference in Bitcoin between Japan and the USA? .. that was just taking advantage of what he was trained for on Jane Street, nothing supernatural there .. that worship for someone who makes money speculating is what shows the decay in our society .. for me someone with a supernatural gift is Newton for example ..
It sounds good in theory, but now let's imagine the following scenario, after Meta kicked me out and I also lost all my savings in FTX, I'm totally broke, and I desperately need $50 to pay for the room in the miserable motel I'm staying, otherwise that same day they are going to kick me out into the street. I go to one of the few friends I have left, and the guy, which is a little sadistic, offers to give me that $50 right now, or give me $100 depending on what comes out on the flip of a coin ..
Notably, less than two months old.
If I was a financial regulator, I would be looking into the full nature of Sequoia’s relationship with FTX and Bankman-Fried’s other ventures. It’s hard to fathom such a massive evaporation in estimated value escaping the attention of one of his few hard cash investors.
If I was a financial regulator, I would be looking into the full nature of Sequoia’s relationship with FTX and Bankman-Fried’s other ventures. It’s hard to fathom such a massive evaporation in estimated value escaping the attention of one of his few hard cash investors.
For context they removed the profile yesterday (hence the archive link) after FTX collapsed and he resigned.
It appears he may have been a little too altruistic with the deposits of his customers.
It appears he may have been a little too altruistic with the deposits of his customers.
Michael Lewis, the author of “The Big Short", is the true winner of this whole debacle. He was/is allegedly following SBF around, working on a book covering his raise to fame and riches and his influence in US politics. Seems he's getting the extra chapters he needed to turn it into a best-seller and another movie adaption.
nice work to whomever archived it in time... the significance of the internet archive is going to grow and grow as the bigots, sleezeballs, and grifters continue to multiply
and yes, i was playing league of legends while typing this monunmental reply
and yes, i was playing league of legends while typing this monunmental reply
This one should be preserved in amber and prominently displayed in the anals of hubric hagiography.
The part about the effective altruists nerd sniping in “tennis whites” shouldn’t be missed.
The part about the effective altruists nerd sniping in “tennis whites” shouldn’t be missed.
Always read all articles with writers motivation/agenda in mind. this is why I like research / tech articles that are thoroughly backed by data or math!
Canadian Teacher Pension put money in the same round. VC could be reckless with their money. How could pension funds be so reckless?
Can society please stop worshiping idiots who were at the right place at the right time? I’m doubtful.
Precisely, that worship for those types of characters shows how pathetic our society is today, those people are the result of our collective aspirations, we are all guilty..
The press needs to stop using cringe acronyms for these people so the Internet Archive can do its job.
Never thought I'd see a nymph on a VC website.
Less than 2 months old, wow.
Big cheques, barely DD.
didn't age well.
I'll admit, it was too long for me now, but I got to this bit, which makes for a perfect tl;dr I guess:
> SBF needed to find a path on which he’d be a coin toss away from going totally bust.
> SBF needed to find a path on which he’d be a coin toss away from going totally bust.
https://news.ycombinator.com/item?id=33571734