Sam Trabucco of Alameda Research: Find what you’re good at and do a lot of it

Links

• Sam Twitter
• Web

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Show Notes

Sam Trabs Intro

– Sam Trabs is now co-CEO of Alameda Research

    – promoted from “trader” lol

– Last time Trabs was on Bitcoin had just dropped to 30k

– Thought it was “predictable” and then buying the bottom was also an easy trade

– Right now there’s a “temporary round number effect” – people will sell at resistance for big round numbers

– Seeing it now with 50k

– “NOT LONG TERM RESISTANCE” – Trabs

– Trabs: “We’ve done quite well at getting long at the bottom and not selling it at all”

New Highs?

– Trabs: “If there continues to be good news I could see it continuing to go up”

– Rally to 65k was very liquidation based – very likely to get undone

– Same the other way [on the way down to 30k]

Positioning In Uncertainty

– The 10 strongest trades make up all the real P&L

– Doesn’t really waste brain power on focusing on smaller, lower conviction trades

– Most days don’t put on big trades

New Ecosystem Plays

– Very quantitative

– Less thesis driven investing, more soaking up APYs with new DeFi plays

Analysis for Wrong Trades

– Cobie: “How do you do postmortems when things go wrong?”

WiFi cutting out, robot overload

Ledger: “I think Sam has an alpha overload filter that makes the WiFi cut out if he drops too much knowledge”

Poor Employee Performance

– If someone has a few bad days, talk to them about their thought process

– Cobie: “Imagine you’re at Alameda, you’ve had a few bad days and a meeting just pops up 9am meeting with the Sams” lol absolute NIGHTMARE fuel

NFT Trading

– Trabs: “I feel remarkably ill equipped to be handling this NFT craze”

– You can use data to learn about trades… you can’t really with NFTs

– Trabs: “There are elements that remind me of DOGE in January”

– Trabs: “Its fairly plausible that its correct to buy most of these things – there is just so much upside”

– The rocks really got in Sams head

– Cobie: “Alameda is coping just like me”

– Trabs: “It is +EV to participate in these because the upside is so high”

– Ledger: “Have you seen the scissors? (in relation to rock, paper scissors NFTs) they are only like 3 ETH, a bargain”

– Cobie: “A bargain relative to rocks? because compared to anything else in life its absolutely ridiculous” lol

Options

– Trabs: “People really overstate the importance of options in crypto”

– In tradfi, options can influence prices

– In crypto, really doesn’t happen

Alameda

– 2019 was a difficult time

– It has since gotten very easy to hire

– Now team is about 30 guys

– Sam can now focus on game theory trading and shitposting on Twitter

co-CEOs

– Cobie: “If you and the other co-CEO took a standardized IQ test, who would win?”

– Trabs: “I took a MENSA test once… it was very easy. She’s better at trivia than I am though”

– For operations, you want to pick one thesis to go with and stick with it

– Trabs: “If someone feels very strongly about something, we tend to just let them do it”

– Trabs: “If we were ever at a true stalemate we’d honestly probably flip a coin”

Alameda Jobs

– Trabs: “We are always hiring”

– Cobie: “What about internships?”

– Trabs: “Hiring interns is our most +EV play we do”

    – jk not a real quote but we can dream

– Trabs: “First couple months people take away value, then eventually start to add value”

– Ledger: “In regards to pay, how do you incentivize people to stick around?”

– Mostly copy traditional institutions, based on P&L

Potential Future Scenarios

– Trabs thinks either new highs or crab

– Cobie: “Do you think that Bitcoin dominance can run again?”

– Trabs: “I have an unsatisfying answer that both are plausible”

– Thinks Bitcoin dominance will remain, but could happen like 5x or more from here

– Taxes may cause a liquidity crunch on NFTs by year end, but also maybe not

Ethereum Dominance

– Is EIP-1559 priced in efficiently?

– Trabs: “I don’t think the crypto market does anything especially efficiently”

– ETH rallied in a very inefficient way once burns started

Overcoming Decision Paralysis

– How to make a decision with 10 scenarios that are plausible?

– Trabs: “If I believe I have a good framework, I can picture the expected value of each scenario by weighing probability distributions and bet on that”

– If we nuke and you incorrectly buy all the way down, how do you unwind?

– Trabs: “I believe the term is, ‘slurp the diperino’” TRABS!

– Basically will cut the sunk cost and see how to extract value moving forward

– Trabs: “We are looking for coin flips that are 53/47 and you lose 47% of the time”

When Trabs gets tilted he just goes and buys things, bought a watch once and literally was in a fugue state and doesn’t remember it

Leverage

– Mostly tries to stay unlevered

– Trabs: “We aren’t risking every dollar we have… it’d be kind of a challenge to anyway” lmaooo good flex sir

– Tries to keep maximum bullets available for days that are extreme

Hypothetical Bear Market

– DeFi bear market?

– Trabs: “A lot of the DeFi tech that has popped up is super exciting and there’s no reason to think it won’t continue to grow as a global force”

– Trabs: “We will never see the prices of March 2020 ever again”

Trabs Without Crypto

– Cobie: “So say it all goes to 0 what do you do with your life”

– Trabs: “I like to play interesting games. I think the crypto markets is the most interesting game I’ve ever found”

– Cobie: “Alright no money making allowed, what do you do”

– Trabs: “Probably play like Magic The Gathering”

Q&A

Chance of Bitcoin to 100k by EOY?

– 10%

How can we make it?

– Identify what you’re good at figuring out what to buy

– Bet on the macro-longer term stuff

Do you have anon account?

– No

CMS thinks he is CMS dog

– Cobie thinks I am CMS dog… in classic Trabs fashion I can neither confirm nor deny

– but no I’m not CMS dog unfort

Trabs: “Dan from CMS should write the crypto history book”

FINAL ALPHA

– Trabs: “Everyone has some things they’re good at and things they aren’t good at. Find the things that you are good at and absolutely go nuts at them”

– Trabs: “Identify your edge and try to blow your edge up. Bet as big as possible there”

Gigabrain pod ty Trabs