Co-Founder and CIO
Ben Hunt is the creator of Epsilon Theory and inspiration behind Second Foundation Partners, which he co-founded with Rusty Guinn in June 2018.
Epsilon Theory, Second Foundation’s principal publishing brand, is a newsletter and website that examines markets through the lenses of game theory and history. Over 100,000 professional investors and allocators across 180 countries read Epsilon Theory for its fresh perspective and novel insights into market dynamics. As Chief Investment Officer, Ben bears primary responsibility for determining the Company’s investment views and positioning of model portfolios. He is also the primary author of materials distributed through Epsilon Theory.
Ben taught political science for 10 years: at New York University from 1991 until 1997 and (with tenure) at Southern Methodist University from 1997 until 2000. He also wrote two academic books: Getting to War (Univ. of Michigan Press, 1997) and Policy and Party Competition (Routledge, 1992), which he co-authored with Michael Laver. Ben is the founder of two technology companies and the co-founder of SmartEquip, Inc., a software company for the construction equipment industry that provides intelligent schematics and parts diagrams to facilitate e-commerce in spare parts.
He began his investment career in 2003, first in venture capital and subsequently on two long/short equity hedge funds. He worked at Iridian Asset Management from 2006 until 2011 and TIG Advisors from 2012 until 2013. He joined Rusty at Salient in 2013, where he combined his background as a portfolio manager, risk manager, and entrepreneur with academic experience in game theory and econometrics to work with Salient’s own portfolio managers and its financial advisor clients to improve client outcomes.
Ben is a graduate of Vanderbilt University (1986) and earned his Ph.D. in Government from Harvard University in 1991. He lives in the wilds of Redding, CT on Little River Farm, where he personifies the dilettante farmer that has been a stock comedic character since Cicero's day. Luckily his wife, Jennifer, and four daughters, Harper, Hannah, Haven and Halle, are always there to save the day. Ben's hobbies include comic books, Alabama football, beekeeping, and humoring Rusty in trivia "competitions".
Articles by Ben:
In 2008, the US housing market – together with a Fed that thought the subprime crisis was “contained” – delivered the mother of all deflationary shocks to the global economy.
In 2021, the US housing market – together with a Fed that thinks inflationary pressures are “transitory” – risks delivering the mother of all inflationary shocks.
The ET Pack is going to figure this out … together.
If you think that market-world fundamentally changed over the past week or two, you are absolutely correct. The market narrative has shifted significantly, as every macro event will now be judged against a backdrop of “does that increase or decrease the chances of market-negative action by the Fed” as opposed to the decade-long dominant backdrop of “does that increase or decrease the chances of market-supportive action by the Fed”.
I am increasingly thinking that both a Covid-recovery world AND a perma-Covid world are inflationary worlds, the former from a demand shock and the latter from a supply shock to the biggest and most important single asset market in the world – the US housing market.
Very little investing today is buying and selling shares of common stock in individual companies. Instead, we buy and sell what Wall Street calls “products” – mutual funds, ETFs, options, REITs, SPACs, etc.
Dave Nadig, who literally wrote the book on ETFs, helps us understand the history and future of the business of Wall Street.
For the past 20+ years, the real-world model for economists to understand unexpected deflation was Japan.
If the risk today is unexpected inflation, what’s the real-world model for that?
Every political movement has a political philosophy, and for Trumpism and MAGA it’s the Dominion theology of the charismatic/Pentecostal church.
Neither the rise of Donald Trump nor the attack on our Capitol can be understood without an examination of this faith and its constructed political narratives.
Believe it or not.
WHO leadership continues to be necessary part of the Chinese narrative machine.
It’s more than a disgrace. It’s more than a humiliation of the people who do good and important work through WHO.
It’s a betrayal of the entire world.
No one thinks their Super Bowl commercial is a dud going into the game, but only one or two will come out as the commercial that everyone knows that everyone knows was really special and witty and effective.
It’s the same with Wall Street narratives.
What’s happening with Reddit and Gamestop and Robinhood is a revolution, but not the revolution you think.
This isn’t a “democratization” of Wall Street. You were played. Again.
It’s a revolution in Common Knowledge. And that changes everything. Again.
You have been told that the odds are ever in your favor. You have been told this for your entire life.
More and more, you suspect this is a lie.
Over the past few weeks you have been told a new story. A brave story. You have been told that by banding together and acting as one, you can “democratize” the stock market.
Today, as you see the collapsing stock prices of the companies you supported, you suspect that this was a lie, as well.