SBF and FTX collapse. The truth is most assuredly messy.

Like many of you, I am fascinated by the collapse of FTX and its founder, Sam Bankman-Fried. The juicy details will make for a great Netflix series.

But, beyond the high-profile storylines, I have been thinking a lot about how everyone missed this… including me. Why did I miss this?

I have watched crypto from the sidelines for the last 3 years, often thinking I had missed out.

To console myself, I read about the sketchy characters, the crypto bros, and the money laundering. That’s why I’m not in this.

But I couldn’t ignore Sam Bankman-Fried.

He came from traditional finance. He was smart. He (seemingly) supported regulation. He was relatable…a normal guy. He kept me interested enough to think crypto might be for me.

It is human nature to get wrapped up in a one-sided story.

Up until Sunday, Nov 6 these are the headlines associated with Sam.

  • The next Warren Buffett? Fortune
  • The mogul who mastered Washington. Forbes
  • The JP Morgan of crypto. Jim Cramer

And, since Nov 6, he is:

  • The Bernie Madoff of crypto
  • Sam Bankman-Fraud

The negative articles are coming fast and furious.

Here is one: 8 More Disturbing Revelations About Sam Bankman-Fried By Kevin T. Dugan and Matt Stieb

We love heroes, and we love villains.

But, I have to remind myself: the truth exists somewhere in the middle. It always does.

Life is messy.

“If you only hear one side of the story, you have no understanding at all.”
— Chinua Achebe

I will try to apply this lesson to my own beliefs.

  • Seek out counter-arguments
  • Assess both sides of the story
  • Only then make my judgment
  • Find my truths (not blindly adhering to the tribe’s truths)

A related note about Tactical Asset Allocation (TAA)

This is new. Be open-minded. It will conflict with certain investment beliefs that you may hold.

But also be critical. TAA cannot erase investment risk. The 60/40 buy & hold portfolio doesn’t work in inflationary times. TAA falters when markets whipsaw or experience steep intramonth declines.

The result of learning more?

  • At best, I’ll open your mind to a new investing strategy.
  • At worst, you’ll consider my evidence and it will further validate your existing strategies.

Thank you for reading. And for supporting

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Brian Herriot, Fast Follow Investor @brianh