Insights From Stone Ridge's 2024 Annual Letter

Hi Reader,

Two cups of coffee and reading things like Stone Ridge Asset Management's 2024 investor letter by CEO Ross Stevens are some of my favourite ways to spend a morning.
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I highly recommend reading it, but if you don't have time here's my key takeaways:
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📚 The power of abstract thinking - how Ross found a "third side" to his exam cheat sheet by writing in highlighter over pencil, solving what seemed like an impossible space constraint.
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🧭 Leverage independent data sources. In the 1700s ships were routinely getting lost at sea, the British government offered a massive £20,000 prize (worth ~$25M today) to solve the longitude problem. Harrison's chronometer revolutionized maritime navigation, saving countless lives by keeping track of time in the UK and using the angle of the midday sun in the current location to determine angles of latitude.
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📈 The core of Stone Ridge's business strategy emerges through their application of the Law of Large Numbers in reinsurance. By pooling uncorrelated risks across multiple reinsurers, they've achieved remarkable risk-adjusted returns at scale. This can apply to many areas of investing and life.
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⚡ Bitcoin mining is transforming stranded energy assets into value, reducing pollution, bringing electricity to millions who lack access.
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🏦 Sweeping profits into Bitcoin rather than fiat currency, reflects a deep understanding of monetary history and future possibilities. Bitcoin rewards those with low time preference (delayed gratification).
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Hope you're having a great close out to the holidays.

Best regards,
James

James Brannan
Chief Executive Officer
BlockByte Capital
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(+61) 412 393 634
​james@blockbyte.com.au​
​https://blockbyte.com.au/​

BlockByte does not provide financial advice. We provide execution support, research and insured custody for investing in digital assets. Reach out to our team to discuss how we can help.

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