Citadel Buys Situational Awareness's Stock Portfolio After Big Losses in AI(www.wsj.com)
40 pointsby mudil4 hours ago6 comments
  • furytrader3 hours ago
    The irony is that the WSJ had profiled Situational Awareness with a glowing story just 1-2 months ago. It reminds me of my old adage: "You don't want to read about your positions in a newspaper" - it paints a large target on your back.
    • darkwizard422 hours ago
      I think this is probably true. Allowed for Citadel and others to create a ton of pressure on SA's highly leveraged positions.

      Always a bigger whale out there with the ability to exert pressure...

  • reilly3000an hour ago
    My 401k is all money market right now. I did that immediately after reading the HF blog post specifically about how GLM 5.2 helped them out when they had refusals from closedai. The value is in all in the future utilization of inference infrastructure profitably. The margins collapse when models are commodities and they really need to be. This is going to be one hell of a ride.
  • hbcondo7143 hours ago
    More precisely, 23 new positions were reported in their latest filing just a couple months ago, most of those being semiconductors:

    https://last10k.com/sec-filings/2045724

    • nrenegar2 hours ago
      It should be clarified that a number of those were puts.
  • d_silin3 hours ago
    Reminds me of LTCM fund story (very smart people X highly leveraged portfolio = a perfect recipe for massive losses on black swan day)
    • vzcx3 hours ago
      LTCM was actually a lot more sophisticated, this fund's thesis was basically "number go up."

      Count the OOMs!

  • mudil2 hours ago
    Smart men go broke three ways: liquor, ladies, and leverage - Charlie Munger
  • BiraIgnacio2 hours ago
    I didn't know buying other funds stock portfolio was even a thing. TIL

    I guess it makes sense, wondering what Citadel will do with it...

    • darkwizard42an hour ago
      If you are a supergiant like Citadel you can simply acquire positions which are so large they are the equivalent of someone's portfolio (or put another way, Citadel sees a huge block of equities packaged up, looking to move and bids on it).

      It would be like if you needed to acquire 100M shares of Apple -- usually a broker will fill that large of an order from several sources OR if some fund has the full liquidity, it can be filled from that single position (and thus acquiring the fund's portfolio position). Now repeat this for their ENTIRE portfolio.