Good Morning! Inflation slowed down to just a 3.1% annual rate last month - and stocks hit fresh 2023 highs on the news. Wall Street is starting to anxiously watch its cash pile shrink. Even toy maker Hasbro is feeling the pinch ahead of the holidays and will lay off 20% of its workforce. Plus how to conquer your fear of deadlines, 2023 top Google searches, and WSJ’s favorite books of the year.

To get in on the private credit boom, sign up for Percent (weighted average APY of 18.58%) and get a $500 sign up bonus.

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Ken Griffin Still Making It Rain

Citadel had a great year - and the hedge fund announced it would return $7 billion in profits back to investors.

It was a tough year for hedge funds and they had to make bets on inflation, job growth, and a banking crisis. But in a year where the average hedge fund gain was 4.35%, Citadel is flexing a 15% return for its flagship Wellington fund (figures through November 30th, 2023).

Citadel will start 2024 with $58 billion in assets under management. And since 2018, Citadel has sent back around $25 billion to their investors. Hedge funds hand back profits to clients because they don’t want their funds to grow larger than they can manage.

Citadel is run by Ken Griffin - who is one of the brightest minds on Wall Street. He’s a huge proponent of Miami overtaking NYC as the finance capital of the U.S. And the firm pays interns upwards of $19k/month in its quest to find the next generation of math/computer science geniuses.

Takeaway: Citadel is coming off a solid 2022 as well. It returned 38% to investors in 2022 (the S&P 500 was down 18% during that year). Citadel and other multi-manager funds like Point72 have seen explosive growth in recent years as investors seek uncorrelated returns to the market. But Citadel’s returns are even outlier among its multi-strat peers, many of which have posted single-digit returns this year.

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Finding Returns in a High Interest Rate Environment

Higher interest rates and market volatility are making it harder for investors to find above-market returns.

However, private credit investments may outperform traditional markets over the next 5 years, according to research from KKR. In fact, they expect private credit returns to outpace the S&P 500 in the next 5 years¹.

Private credit used to be reserved only for big-name institutional investors, but today, Percent is making these investments accessible to everyday accredited investors.

On Percent, it’s easy to find, compare, invest and track your private credit investments.

You’ll get access to:

• Attractive yields. As of October 31, Percent’s weighted average APY is 18.58%.

• Diversification. Returns are generally independent from public market performance.

• Liquidity. Deals can mature in less than a year, with some offering liquidity after a few months.

• Up to a $500 sign up bonus with your first investment.

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Top Reads

• Inflation slowed to a 3.1% annual rate in November (CNBC)

• Top Wall Street strategists share their 2024 New Year resolutions (YF)

• How grocery stores are becoming data brokers (CNBC)

• Wall Street eyes waning cash pile with anxiety (Reuters)

• Shale oil deals are defying the M&A slump (Axios)

• Oil plunges near June lows as market looks oversupplied (YF)

• Google lost its Epic antitrust case (Axios)

• Toy maker Hasbro will lay off 20% of its workforce (Reuters)

• Shake Shack CEO stepping down in 2024 (YF)

• The 3 job paths in the AI era (CNBC)

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Markets Rundown

Stocks closed higher after investors analyzed fresh inflation data.

Movers & Shakers

• (+) Cava ($CAVA) +19% after the company's IPO lockup period expired.

• (+) SiriusXM ($SIRI) +6% after agreeing to combine stock with Liberty Media.

• (–) Oracle ($ORCL) -12% because of a revenue miss, cloud growth concerns.

Private Dealmaking

• AstraZeneca bought Icosavax, a vaccine maker, for $1.1 billion

• R1 RCM bought Acclara, a healthcare revenue management company, for $675 million

• Mistral AI, a generative AI startup, raised $415 million

• Fifth Season, a production company, raised $225 million

• Bicara Therapeutics, a biologics developer, raised $165 million

• Armada, an edge computing startup, raised $55 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

The Power Of Persistence

Do you quit too soon on your goals? Wish you could stick to your diet or exercise program? 

Do you get excited about your New Year's resolutions and business ideas only to find your enthusiasm fade away after several months or even weeks?

It has been proven throughout history that persistence—not talent— is the most valuable ingredient to accomplishing feats both big and small. Especially when talent is not persistent.

In The Power of Persistence, author John Martin offers seven steps to breaking the cycle of starting and quitting.

By following the simple formula presented in these pages, you can build a mindset of persistence and finally commit to your goals with the confidence that you will achieve them, regardless of the obstacles that arise.

“The beacon of hope you need in moments of despair.”

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Top Google Searches of 2023

_{PRESENTED BY MAG CAPITAL PARTNERS}

Investors: Follow This $2.4T Breadcrumb Trail

While most investors toe the line with standard markets, the savvy among us have zeroed in on what some experts call “the backbone of the American economy.”

Welcome to Industrial real estate (IRE). 

The global supply chain disruption of 2020 revealed a clear need for domestic manufacturing solutions, fueling massive demand in the US. 

While inflation riddled other sectors, IRE remained resilient, delivering instant cash flows, inflation protection, and asset appreciation for investors. 

But here’s the kicker: Not all IRE investments are the same. MAG Capital Partners have over 50 year’s experience of accessing off-market investments that deliver consistent yields (while minimizing risk).

Don’t wait–unearth the industrial real estate market with MAG Capital Partners today.

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Black Box Model

Have you ever had the impression that things have gotten more complicated? That it’s increasingly difficult to understand the basics of modern life? And that all this happens at an accelerated rate?

Now you have a term for it, it’s called the Black Box Model. Our existence, the model proposes, is increasingly besieged with black boxes. These are “complex constructs that we do not understand even if they’re explained to us”.

While we cannot see inside these black boxes, we still incorporate their implications into our decision-making. Do you really understand how the device you’re reading this article on works? Or the algorithm of the search engine you used to find it?

If we think about it further, the Black Box Model has strange consequences. The more black boxes surround us, the more our everyday decisions become a matter of faith. It could also mean we’re more susceptible to people who offer faith-based explanations rather than rational ones.

We seem more comfortable in simplicity, which can lead to Bikeshedding. Meaning, instead of discussing the intricacies of complex systems at length, we revel in the trivialities we can comprehend.

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Short Squeez Picks

• 3 moves for developing managerial talent

• 4 little things that will matter a lot more in 40 years

• Why creative genius comes down to discipline 

• How to overcome your fear of deadlines

• WSJ’s favorite books of 2023

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Memes of the Day