Philochat

💬Philochat: Natural Stupidity?

Natural Selection: Leopold, Jane Street, Memory.

Markets may have rebounded since our meme bottom moment (see below) but Leopold has not.

Famed market maker Jane Street is reported to have lost $15bln in July due to investments in Leo's fund, inaptly called "Situational Awareness" – LOL!

But their losses have probably also resulted from market making positions – Jane Street reports a 13F nearly $800bln but has equity of $50bln. Well, they had equity of $50bln – now it's considerably less.

I don't know how that will affect their normal trading operations, but I know Natural Selection is something we really need to talk about. Don't forget what Nassim Taleb taught!

This is usually how it happens no? https://t.co/BVMBY2WMpE pic.twitter.com/fEQEhxC0Yv
— Philoinvestor (@philoinvestor) August 15, 2026

Remember Charles Darwin's famous quote? 👇

“It is not the strongest of the species that survives, not the most intelligent that survives. It is the one that is the most adaptable to change.”
― Charles Darwin

....Though Philo disagrees with Darwin on a few things.

In markets, change is constant, and much faster than in real life. So the strongest and intelligent tend to actually survive and prosper. Because to adapt to change, you have to survive first.

And as we saw from last month's sell-off, many did not manage to....

In fact, if Charles Darwin were alive today, he would publish Origin of the Retards.

Survival of the Wisest

One sell-off in AI and PAs went from $23mln to $2mln in one month – how can you even do that?
Leopold was managing a $40bln fund and managed to practically burn it all by not knowing the risks he was carrying.
On the Sovereigns side, the 10-year treasury is once again approaching the magical 5% level and the powers that be are shaking.
Neoclouds like CRWV are trying to make it out alive, but with the changes in AI and their balance sheet – it doesn't seem likely.

... So I thought it was time to publish a piece on just this: Natural Selection in the time of AI. Coming up on Philoinvestor.

There is a lot to talk about and it may be published as a multi-part series.

Harakiri

We clearly gave the Dollar/Yen trade setup in Flash Philo on Yentervention – the pair is up 2 Yen since publication.

In the piece I discuss the politics and interests around Yen moves, and how each player is positioned.

Universal Music Group

Got many emails from subscribers on Universal, will get back to you all. I love the setup, which is also very educational, so go and read that one. Well worth your pressed time.