A Thought About Risk

A message to supporters of The Journeyman

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It’s been an eventful week. As you can imagine, the financial world is focused on SpaceX and Elon Musk’s status as the world’s first trillionaire. The jury is out on the future of SpaceX as a public company, but something I saw on a Bloomberg Television interview on the subject caught my attention.

Legendary short seller Jim Chanos, whose firm makes bets against companies it believes are overpriced, was asked whether today’s market resembles the Dot-Com Bubble. Here’s the exchange:

ANCHOR: “Historically, returns have been awful at those valuations. You mentioned earlier the dot-com bubble. Are we doing dot-com bubble 2.0 right now?”

CHANOS: “Oh, this is much bigger.”

The full Chanos interview is available on YouTube.

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That answer wasn’t interesting because it came from Jim Chanos. It was interesting because it echoed something I’ve thought about for some time. If you’ve been reading my Fault Lines series, you know what I mean.

Now, I’ve learned not to predict crashes. Markets can and often do stay irrational longer than any of us expect. That said, I’ve witnessed firsthand every major market disruption of the last four decades: the Savings & Loan Crisis, Black Monday, Long-Term Capital Management, the Dot-Com Bubble, 9/11, the Great Financial Crisis, multiple flash crashes, and the pandemic.

But one thing I learned from my decades in finance is that the catalysts for these events rarely matter most. The biggest crashes don’t happen because of a single factor. They happen because several things go wrong at the same time. Almost without exception, there is a period when risks begin to stack up, one on top of another.

Today, I see a market priced for almost unlimited optimism sitting atop a growing pile of unresolved risks: AI, private credit, rising long-term rates, record deficits, energy vulnerability, and geopolitical instability. Individually, any one of these risks can probably be managed. What concerns me is the possibility that these aren’t independent risks at all.

None of this means a crash is imminent. But it does mean the margin for error is getting smaller. Much smaller.

That interview reminded me that a shock to the system—the global pandemic—inspired me to launch The Journeyman. After spending decades providing market intelligence and analysis to institutions, I wanted to make that same perspective available to everyone else.

I can’t predict the future. But I can help people think critically about risk, incentives, markets, and the forces shaping the world around them. For the past six years, that’s what I’ve tried to do here.

As I’ve said many times, my preference is that my writing remain free. But producing what amounts to independent research, along with interviews, livestreams, educational content, and long-form analysis requires time, tools, and resources. Support from paid subscribers makes it all possible.

Whether you’re a free subscriber, a paid subscriber, or someone who simply reads and shares my work, thank you for being part of this community. I truly appreciate your support. But if you’ve found value in the work, I hope you’ll consider becoming a paid subscriber.

Because when uncertainty rises, access to thoughtful, independent analysis matters even more.

Stay safe,

Marlon