Capital
Misallocation
The
Multiplicative
Indictment
The Causal Barbell: Part 1
How much alpha does your hedge fund need to beat the index? You supply the assumptions. The arithmetic does not negotiate.
Market — feeds every tab
Defaults
These are starting values. Move any slider; the indictment is yours.
- 10-year hold
- 1.5-and-20, pod-level netting on, pass-through skipped
- ½σ² variance drag — conservative if the book is left-tailed
- Monte Carlo seed 20260910, 10,000 shared draws
- Cascade impact k = 0.09
- Shiller real total returns, 1871–2023
Tab 4 · Crowding & liquidation
A shared short book, hard stops, and a squeeze.
Mechanical, single-event. No time series. Run to see how a 3% squeeze becomes something else once pods with correlated shorts hit their stops.