Jan 2, 2024

Decoding Ross Stevens' Investor letter: Ten transformative lessons

Explore the insights of Ross Stevens 2023 annual investor letter: Ten transformative lessons

Decoding Ross Stevens' Investor letter: Ten transformative lessons

Ross Stevens, a renowned investor, and thought leader in Bitcoin, recently released his end of 2023 investor letter. If you've ever come across Stevens' writing before you won't be suprised to hear that it's packed with insights. Not just for Bitcoiners but for anyone keen on understanding the mindset of one of the world's most astute investors.

The letter is recommended for everyone, but for the condensed version; here's my take aways for the top ten lessons from Stevens' letter, each offering a unique perspective on investment and life.

1. Embrace Challenges with a Positive Mindset

Stevens urges us to shift our perspective on challenges. Instead of seeing tasks as burdens ("I have to do this"), we should view them as opportunities ("I get to do this"). This subtle change in language can transform our approach, turning obligations into privileges and fostering gratitude.

2. Success and Failure are Lagging Indicators

Our position in life is a reflection of our past behavior. Small seemingly inconsequential decisions, day by day that interact with each other to compound exponentially.

3. Comfort in Simplicity

Stevens champions simplicity in strategy, a philosophy I personally align with, especially when it comes to Bitcoin. The power of a straightforward buy-and-hold approach is simple, not easy, but almost always the most effective strategy.

4. Diversification Beyond Correlation

He highlights the importance of being aware of market non-linearities. It's not just about having uncorrelated assets, but understanding that even the biggest numbers can be reduced to nothing under certain conditions.

5. Bitcoin is hope.

In a world where state currencies are increasingly unstable, Bitcoin reperesents hope and fairness. As the People’s money, bitcoin is unstoppable by borders, devaluation, censorship, or mass surveillance. If you're hear for price action, that's okay, just make sure you stay for the principles.

6. The Principal-Agent Problem

"Fama observed that, in corporate finance, ownership and control of a firm are separate. Shareholders own the firm. Employees manage the firm. Fama identified two heuristically addressable, but fundamentally unsolvable, problems with this setup: a) incentive alignment and b) information asymmetry."

Stevens argues that it this principal-agent problem is the central issue in asset management and therefore asset pricing.

7. Do Your Own Research

He emphasizes the importance of empirical research and practical experience, especially in areas like the reinsurance market, where conventional wisdom often falls short.

"Every franchise we consider building requires two conditions, each necessary, neither sufficient. First, clearly identifiable principal-agent problems that uniquely partnering with Stone Ridge can help industry leaders minimize. Second, and related, access to sustainably valuable proprietary data, whatever the source."

8. Take Responsibility

Stevens advises that blaming others only leads to suffering. Taking responsibility for one's actions is crucial for personal growth and success.

9. Be Tough on Ideas, Kind to People

Creativity thrives in an environment of intellectual friendship. Stevens advocates for rigorous debate of ideas, coupled with respect and kindness towards individuals.

10. Dedicate Your Life to Your Goals

Finally, Stevens reminds us of the commitment required to achieve significant goals. It's not just about what you do; it's about dedicating your life to it, a privilege in itself.


Ross Stevens' investor letter is a fantastic guide to thoughtful living and decision-making. His writing often leaves you with deep ideas to ponder, and this 2023 investor letter was no exception. Many great ideas here to ponder and apply.