All-In E54: Spread trading big tech, capital allocation, Zillow's misfire, Progressives suffer losses
Episode 54 • 11/6/2021
Big Tech Spread Trading Strategy
- Chamath proposes a spread trade strategy: going long Microsoft/Google while shorting other big tech companies like Apple, Facebook, Amazon, Netflix
- He explains spread trades help manage risk by being market neutral - if market drops 30%, both longs and shorts may drop similarly
- The strategy works well due to current low interest rates and borrowing costs
- Microsoft and Google seen as safest tech companies due to platform advantages and strong monetization
Virginia Elections & Progressive Setbacks
- Glenn Youngkin (R) defeated Terry McAuliffe (D) in Virginia governor race, representing 13-point swing from Biden's 2020 margin
- Key issues: Education/CRT in schools, public safety, economy
- Democrats suffered losses across multiple states and local elections
- Analysis suggests Democrats have moved too far left of center compared to Republicans
- Group discusses need for Democrats to return to centrist positions to win elections
Zillow's ibuyer Program Failure
- Zillow trying to offload 7,000 homes for $2.8B after aggressive buying
- Stock dropped 37% in a week, down 70% from February peak
- Company reducing workforce by 25%
- Issues stemmed from algorithmic buying without proper on-ground verification
- Contrasts with more careful approach from competitors like OpenDoor
Carbon Capture Breakthrough
- Chinese research team developed method to convert CO2 to starch
- System is 10x more efficient than corn plants
- Could theoretically capture all human CO2 emissions with facility covering 25x25 mile area
- Technology demonstrates potential for technological solutions to climate change rather than political approaches
- Group discusses importance of funding science/technology vs international climate agreements
The episode highlighted several major themes: market opportunities in tech, political realignment away from progressive policies, risks of algorithmic decision-making in real estate, and technological solutions to climate change.