Freedom Calls: 3/8/26, “Schadenfreude meets Aschenbrenner…and often the bond market is often smarter than the central bank"

From the team at Freedom Asset Management

“Schadenfreude" is one of those wonderful words in the German language for which there is no direct translation into English; it means finding pleasure in other people’s misfortune.  New York hedge fund managers are big fans of the word.

Situational Awareness becomes situationally unaware

Without a doubt in our world, the key headline of the week was the collapse of "Situational Awareness" - the c.$45bn hedge fund investing in AI and technology names, run by 24-year-old “Wunderkind" Leopold Aschenbrenner.  

Pictured: Leopold Aschenbrenner, source: CNN

Aschenbrenner was a former OpenAi employee with a passion for writing essays.  When it came to understanding the direction of AI, he was considered the guru of Silicon Valley.  He had no previous experience of investment management.  Situational Awareness, his firm, was using 4x leverage to invest in a highly concentrated portfolio of public and private names that should profit from the AI revolution.  He was deploying an estimated $180bn.  What could possibly go wrong?

It had some of the hallmarks of the LTCM and Archegos disasters all wrapped up in stunning youthful naivety.  Let’s unpick what happened with an eye through history’s lens and why it matters to us this week.

Cody has also written for us in his regular column (see below) on how he saw it play out.

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