🎙️ Gold Mine

The results are in. Nvidia’s smashed expectations yet again, reporting more surging sales and profit. It’s safe to say demand for its AI chips remains high.

Nvidia’s market value is already up by an unprecedented $2.2 trillion this year. What a run for Jensen Huang’s titan, whose stock is up about 2,700% over the past five years.

We’ll have much more in Friday’s edition.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• Dalio’s Bridgewater opens strategy to retail investors

• Paper checks: The gold mine for scammers

This, and more, in just 5 minutes to read.

Chart of the Day

A Message From Our Friends at DUNN Capital

50 Years of Market Mastery

What’s the value of 50 years of experience?

At DUNN Capital, it’s everything.

Founded in 1974 by physicist Bill Dunn, we’ve spent the last five decades navigating every major market shift - from the oil crises of the 1970s to the financial meltdown of 2008, to inflationary pressures in 2022. Throughout it all, their data-driven, disciplined approach has allowed them to succeed.

Now, as they celebrate their 50th anniversary, they’re sharing their journey with you in a brand-new eBook.

Here’s what you’ll get when you download it:

• A behind-the-scenes look at DUNN Capital’s 50-year evolution from bold experiment to a firm managing over $1.4 billion in assets

• Key lessons learned through some of the most volatile periods in financial history

• How their unwavering commitment to discipline and client alignment has kept them on top through every market shift

Accredited Investor? Confirm your status to download the eBook and gain exclusive access to a video detailing DUNN Capital’s remarkable journey from inception to industry leader.

In The News

🤝 Bridgewater’s Ray Dalio Teams Up With State Street for Retail ETF

Bridgewater Associates, one of the world’s largest and most well-known hedge funds, is pivoting toward retail. 

All-Weather: Bridgewater announced a partnership with State Street Global Advisors, which manages nearly $5 trillion in assets. The collaboration centers on an exchange-traded fund (ETF) that gives everyday investors access to Bridgewater’s renowned “All-Weather” investment strategy. 

• Bridgewater is trying to revitalize itself after its assets have declined substantially in recent years from a peak of $160 billion to about $100 billion. Poor returns and significant outflows have driven its decline, particularly since 2022. 

No more secrets? The move is noteworthy because most hedge funds, especially Bridgwater, are secretive and exclusive. 

But the partnership shows that Bridgewater is trying to recover from a disappointing performance in its flagship Pure Alpha fund, which has lagged while the U.S. stock market has soared to new highs. 

• "At Bridgewater, we see global investors increasingly focused on portfolio resiliency and desiring durable client portfolios," noted Bridgewater's co-chief investment officer
  

• In this partnership, the proposed ETF will employ Bridgewater's "risk parity" strategy, which uses leverage to balance investments based on expected volatility — a sophisticated approach.

Dalio, 75, is worth about $14 billion. He founded Bridgewater in 1975 in New York when he was only 26.

Why it matters:

This isn’t just a story about Bridgewater; it’s part of a broader trend where prestigious alternative investment firms tap into the retail market. State Street Global Advisors pioneered ETFs and has been aggressively expanding its product lineup, launching more than 80 new funds since bringing on Anna Paglia as chief business officer.

• "Bridgewater is known for its 40-year history of delivering resilient, diversified portfolios and insights to many sophisticated institutional global investors,” Paglia said. “This strategic relationship will now bring that portfolio construction expertise to retail investors as well."

New pool: The timing is also strategic. Traditional hedge funds and private equity firms are finding their institutional investors (like pension funds and endowments) either maintaining current investment levels or reducing alternative investments. By partnering with established retail-focused asset managers, the firms can access a new pool of capital through wealthy individual investors.

• Other partnerships include Capital Group with KKR, BlackRock with Partners Group, and State Street's separate arrangement with Apollo. 

Not so guarded: What makes the Bridgewater-State Street partnership interesting is that it’ll provide transparency into Bridgewater's investment methods, as ETFs require regular disclosure of their holdings and strategies. It’s a big shift from the firm's traditionally guarded approach to its investment techniques.

For retail investors, this could mean access to institutional-quality investment strategies through a more accessible (and more affordable) vehicle. For the asset management industry, it represents a continuing democratization of sophisticated investment strategies and a blurring of the lines between institutional and retail investment products.

Read more

More Headlines

🚨 Billionaire Gautam Adani charged in New York with massive fraud, bribery

💵 Trump picks Cantor Fitzgerald CEO Howard Lutnick to be commerce secretary

💰 Bitcoin hits all-time high of almost $95,000; asset has soared five-fold since FTX implosion in late 2022

📉 Target just had its biggest earnings miss in years — and the stock plummets 21%

📺 Comcast announces $7 billion spin-off of NBCUniversal cable channels

🛒 Walmart raises guidance after another strong earnings report ahead of the holiday season; stock hits new all-time high

🤔 Why Buffett's move to cash might not be a bad bet on the election (and future)

⚠️ A Gold Mine for Scammers: Paper Checks

There’s no doubt we live in an era of digital payments. You can tap your phone at virtually any check-out counter to pay, Zelle friends or clients, or send Bitcoin to almost anyone worldwide — in seconds.

Yet paper checks are hanging in there in the U.S. — and criminals are exploiting the vulnerability efficiently. One report found that check fraud has skyrocketed almost 400% in the past year, creating a large security challenge for big banks (and regulators). 

The problem is alarming and uniquely American. While most European countries have completely transitioned to electronic payment networks, Americans still write an average of 30 checks per person annually—almost twice as many as the French, the world's second-largest check users. 

• Checks are an outdated payment method, and they’ve created a lucrative opportunity for fraudsters who have turned check manipulation into a sophisticated criminal enterprise.

Here’s how it works: Like many financial fraud schemes, it’s simple yet effective. Criminals start by stealing checks from mailboxes, then use household chemicals to wash out original amounts and recipients. Then they rewrite the checks to access funds through bank accounts. Some purchase blank checks or steal universal keys to postal drop boxes, making their criminal operations disturbingly accessible.

The real weakness lies in the banking system's regulations. Federal rules give banks seven business days to challenge a check's validity before they must release funds. Mobile deposit technologies have made this even easier, allowing criminals to withdraw money quickly before banks detect fraud.

• "We're not talking about skilled individuals," said a former FBI most-wanted cybercriminal now working as an advisor. "We're talking about people who understand that there's an opportunity."
  

• The opportunity is large — costing financial institutions over $688 million.

Why it matters:

The scale of the problem is staggering, and more than 800 financial institutions reported being victims of mail theft-related check fraud. Fraudsters also use Telegram, Facebook, and TikTok to share tips and showcase their schemes, because many feel they can’t be caught.

What can be done? Banks are fighting back. JPMorgan Chase has frozen accounts, and Fidelity Investments has imposed longer holds on mobile deposits. Banks have used security camera footage to track and prosecute fraudsters in some legal cases. 

• JPMorgan documented a case where a masked individual deposited a $335,000 check and withdrew the funds in chunks the next day.
  

• Law enforcement has also progressed, but criminal networks remain ahead of the curve. One woman had a $3,200 check stolen and altered to nearly $4,200, a classic check fraud case. After weeks of investigation and a letter to the bank's CEO, she eventually recovered her funds — but not everyone is as fortunate. 

Final thoughts: The broader implications are clear: The United States' continued reliance on paper checks creates a security vulnerability. Until the financial system transitions to more secure electronic payment methods, criminals will continue to exploit the low-tech, highly profitable scheme.

• As one analyst observes, "Deterrence is something that's missing. That's why folks are comfortable doing this. They're brazen."

Read more (WSJ)

Quick Poll

On Monday, we asked: When do you plan to do the bulk of your holiday shopping and gift buying?

— One response spoke for many, writing: “Seems indecent to get it done before Thanksgiving.”

— Some folks are already done with their holiday shopping. “In our family we agreed not to give each other anything (except for the children). We did this 15 years ago. This was a great decision and relieves a lot of stress.”

See you next time!

That's it for today on We Study Markets!

Enjoy reading this newsletter? Forward it to a friend.

Was this newsletter forwarded to you? Sign up here.

Use the promo code STOCKS15 at checkout for 15% off our popular course “How To Get Started With Stocks.”

Advertise with us.

Follow us on Twitter.

Keep an eye on your inbox for our newsletters on weekdays around 6pm EST and on weekends. If you have any feedback for us, simply respond to this email.

You can also leave your comments/suggestions/feedback anonymously here.