Welcome to Dry Powder. I’m Bill Cohan.

I hope that, wherever you are, you are enjoying a restful Labor Day weekend. In today’s issue, a veritable candy bowl of Wall Street ephemera, from Warren Buffett entering the $1 trillion club, to the ironies of the A.I. hype machine, and some notes on the rickety resolution to the warring founders dilemma at Two Sigma.

But first…

• Some quick media updates from my partner Dylan Byers: Kamala Harris’s first interview as the Democratic nominee, which was watched by 6.3 million people on CNN on Thursday evening, was predictably unremarkable. In a 27-minute sit down with Dana Bash, accompanied by her running mate Tim Walz, Harris mostly evidenced the same thoughtful but cautious demeanor she has shown in past interviews—enough to exit the night unscathed without actually saying much.

  What I found notable from a media perspective is just how little she was pushed. Dana conducted a responsible interview and hit on all the relevant topics—fracking, flip-flopping, the economy, the Biden of it all—and as the Times notes, it was never going to be easy to extract much news here. Still, it was a reminder of just how stale this genre has become, how rarely we see truly hard-hitting exchanges on broadcast and cable news anymore. In the last decade, only a handful of exchanges stand out—Jonathan Swan with Trump, for instance, but even that was conducted by a digital journalist on HBO. In any event, there must be room for innovation here, right? One cable news veteran likened the “clunky” interview to “a gas guzzler in the age of electric cars.”

  Tangentially, former Fortune C.E.O. Alan Murray is joining The Wall Street Journal as the editorial lead for its events arm, part of a broader plan to grow WSJ Live into a much bigger business. This is inarguably a step down for Alan, who will now report to Dow Jones C.E.O. Almar Latour, but it’s a net win for the Journal as it seeks to improve what has so far been an underpowered business. In any event, it will be interesting to see how they leverage Emma Tucker’s newsroom and how they compete in this space with Bloomberg, FT, CNBC, Semafor, and so on.

• 🎧 The Pitaro monologues: In case you missed it, last week, my partner John Ourand launched his new podcast, The Varsity, which can be thought of as an extension of his addictive sports business newsletter of the same name. His first guest was none other than Peyton Manning, and in today’s episode, he sat down with ESPN chairman Jimmy Pitaro for a candid discussion about the state of his business and the industry writ large. Of course, Pitaro’s name has cropped up several times in Puck over the past week, as the matter of Bob Iger’s succession has once again become the preferred parlor game among media insiders. Jimmy, as you would expect, was a phenomenal guest. You can listen to the episode here, and subscribe to John’s podcast here and here.

So I made the fateful decision to sell eight of the shares and keep two of them, coughing up $24,000 in the process. That decision cost me more than $5 million. Berkshire stock is now trading at more than $700,000, and on Wednesday, the company surpassed a market valuation of $1 trillion. Congratulations, Warren.

In any case, it hardly needs to be said that achieving a $1 trillion valuation is a mind-blowing milestone for any company, and even for many national economies. But in a world where Microsoft and Apple regularly flirt with a $3 trillion valuation, and Nvidia and Amazon are in the $2 trillion range, it isn’t that crazy that Berkshire Hathaway, with its vast array of solid businesses, is trading for more than $1 trillion. After all, Buffett has some quarter of a trillion dollars in cash waiting to be deployed as soon as some of the air comes out of the equity markets. Talk about dry powder!

Warren Buffett celebrated a personal milestone last week, as well, when he turned 94. Of course, the burning question for loyal Berkshire Hathaway investors concerns the matter of succession. What happens when Warren is no longer at the helm of the ship? It’s similar to what Apple shareholders had to ask themselves when Steve Jobs got sick. My fellow Dukie, Tim Cook, turned out to be a fabulous choice. He took over a company worth $300 billion and turned it into a company worth $3.5 trillion.

By now, Warren has had a long time to think about succession, and to test the mettle of his chosen successors, Greg Abel, on the investment side, and Ajit Jain, on the insurance side. And while there probably won’t ever be another Warren Buffett—sorry, Bill Ackman—I suspect Abel and Jain will be seriously good stewards of his legacy. Will they do for Berkshire Hathaway what Cook did for Apple? I don’t know, but I’m going to stick around and find out. (This is not investment advice.)

The ridiculous puffery around artificial intelligence is just the latest example of the Wall Street hype machine phenomenon, right up there with internet hype 1.0, mortgage-backed securities hype, SPAC hype, crypto hype, and meme stock hype. Given the ample evidence that investors who go for these things eventually get singed, I’m not sure why this keeps happening. (Again, not investment advice.)

To wit: Look at all those people, back in 2022, who invested in Trump Media & Technology at close to $100 a share. They can’t be feeling great now that the stock is trading below $20. (Trump, of course, doesn’t care at all. It’s all gravy for him. He paid nothing for his $2 billion stake in the company.) Alas, some people just can’t resist a get-rich-quick-scheme, or the fear of missing out on one, and no institution in the world is better able to exploit that aspect of human nature than Wall Street banks.

In his Saturday profile of Nobel Prize-winning economist Eugene Fama, made famous for his “efficient market thesis,” Financial Times journalist Robin Wigglesworth puts the A.I. hype into proper perspective. “The mania for all things artificial intelligence is the latest challenge to Fama’s theories, transforming the world’s stock market into an inverted pyramid resting precariously on a narrow clutch of companies worth trillions of dollars,” he writes. “These can add and shed hundreds of billions of dollars’ worth of stock market value on virtually no news. As a result, even some Fama acolytes are losing their faith.” Microsoft, the biggest investor in Open AI/Chat GPT, has a market value of $3.1 trillion. Nvidia, the maker of A.I.-related chips? Just under $3 trillion. Meta’s stock value, at $1.3 trillion, is up 75 percent in the last year, mostly because of its pivot to A.I.

Now that Josh Kushner is supposedly worth almost $4 billion—more even than his brother and his brother’s father-in-law—I know that we are all supposed to genuflect in his direction, but I’m not sure how he justifies investing $1 billion of his investors’ money into OpenAI/Chat GPT at this nosebleed valuation. OpenAI reportedly has annualized revenue of $3.4 billion, which is not nothing, but 33x revenue? And who knows if the company, which is reputed to be structured as a nonprofit, makes the profit needed to justify the $100 billion-plus price tag.

To be honest, I’m getting FTX déjà vu all over again. I’m not in any way suggesting there’s any kind of fraud going on at OpenAI/Chat GPT but, just as with FTX and its own hypnotic C.E.O., Sam Altman seems to be the latest pied-piper capable of spinning fantastic tales about what his company will do one day and getting smart people to believe it. I have no doubt some people will find ChatGPT a useful tool, but I don’t get this insane valuation.

I am also scratching my head about the choice to name Scott Hoffman as the new co-C.E.O. of Two Sigma, alongside Carter Lyons, who has been at the firm for 13 years. I’ve known Hoffman for more than 30 years. We worked at Lazard together. I was an M&A banker at the firm; Scott worked for the firm’s general counsel, Mel Heineman, fresh from Cravath. At Lazard, especially when it was a private partnership owned by Michel David-Weill, the firm’s general counsel was more like a consigliere, who knew—and kept—all the firm’s secrets, some of them quite unpleasant. Much to my surprise, and that of other bankers at the firm, Scott took over from Heineman when he retired, and was the general counsel of Lazard from its I.P.O. in May 2006 until his retirement from the firm last year.

At Lazard, Scott fancied himself a bit of an enforcer. He was likable enough, and I always got along with him just fine. That is, until I took to writing about Lazard. We had a memorable run-in a few years ago, when I wrote a piece about how Lazard could be doing a much better job than it was doing in terms of hiring women and minority bankers. The firm’s own statistics, publicly available, noted this fact. But Scott did not like the article, and let me know it in no uncertain terms in a phone call after it was published. After a bit of back-and-forth, he hung up on me. We haven’t spoken since.

I have no idea how Scott got himself to a quant hedge fund after leaving Lazard, which is about as far away from a quant hedge fund as you can get on Wall Street. Nor am I sure how you go from being the general counsel at a boutique investment bank to the co-C.E.O. of a hedge fund with serious personnel issues. (Somehow, though, the fund continues to perform well enough.) Between the two fighting co-founders sticking around and the bizarre selection of Scott Hoffman as co-C.E.O., my gut tells me we haven’t heard the last of Two Sigma’s issues just yet.