Draft Day

By Rusty Guinn | November 7, 2018 | 8
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We are wired to associate outcomes with the biggest single visible variance. This is a process-breaking flaw for general managers and portfolio managers alike.

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Notes from the Diamond #4: Less Is More

By David Salem | November 10, 2018 | 2

Peer group comparisons are the primary measuring stick of both baseball GMs and investment PMs. Here’s how they are used and (more often) abused.

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Things Fall Apart (Part 1)

By Ben Hunt | August 8, 2018 | 7

Part 1 of a three-part series on what it means to have a polarized electorate and a monolithic market. Today’s note: the Age of Ridiculousness and the decline and fall of the American Empire.

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Tony Soprano stares at you menacingly

Things Fall Apart (Part 2)

By Ben Hunt | September 4, 2018 | 0

Part 2 of a three-part series on what it means to have a polarized electorate and a monolithic market. Today’s note: How do things fall apart in a monolithic market? Not with a bang but a whimper.

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Things Fall Apart (Part 3) – Markets

By Ben Hunt | October 24, 2018 | 22

The Fed, China and Italy are the Three Horsemen of the Investment Semi-Apocalypse. They’re major market risks, but you’ll survive.

There’s a Fourth Horseman. And it will change EVERYTHING about investing.

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Clear Eyes, Full Hearts, Can’t Lose

By Ben Hunt | October 2, 2018 | 16

What to DO when Things Fall Apart. How to make your way in a fallen world, where the electorate is polarized, the market is monolithic, and everyone seems to have lost their damn minds.

It’s not an Answer. It’s a Process.

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Working to Protect the World from Bananas

By Neville Crawley | November 12, 2018 | 1 Comment
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With technology, even totalitarian surveillance technology, there typically is no ‘big bang’, just a bunch of independent systems coming on line, getting networked together, and then a tipping point. We’re there with China.

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Foundation and Empire

By Ben Hunt | November 12, 2018 | 2 Comments
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How can US household net worth continue to outpace US economic growth if the Fed won’t play ball with easy monetary policy? History shows another way to keep the party going

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The Fiat News Index

By Rusty Guinn | November 11, 2018 | 10 Comments
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Common criticisms of the news media tend to focus on bias. But when it comes to learning to resist the unavoidable influence of narrative and meme on our brains, our focus should be on how much we allow others to explain things to us. We’re working on tools to allow citizens to do exactly that.

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Infrastructure Week!

By Ben Hunt | November 9, 2018 | 8 Comments
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There’s a dog that didn’t bark in the midterm campaign. And its silence tells me a lot about where this country is going.

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Hey, Maybe It’s the Needle

By Rusty Guinn | November 9, 2018 | 5 Comments
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A good model isn’t just right. A good model has to be relevant. And in a world of abstraction and narrative, engaging in relevant ways demands much more of us.

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Control Point

By Neville Crawley | November 7, 2018 | 7 Comments
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Neville Crawley, CEO of Kiva, returns to Epsilon Theory with “Rabbit Hole”, a regular series of notes on the nexus of government, society and technology.

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ET In the News: Midterm Election Edition

By Rusty Guinn | November 5, 2018 | 0 Comments
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A round-up of the most representative stories about the midterm elections between 9/30/2018 and 11/5/2018.

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The Madame Bovary Effect

By Ben Hunt | November 4, 2018 | 2 Comments
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One way or another, boredom must be eliminated. It’s as much an iron law of markets as the impact of greed and fear. And it’s just as powerful.

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You Are What Your Record Says You Are

By Ben Hunt | November 3, 2018 | 11 Comments
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It’s the defining quote for any performance-based social system, whether it’s football, politics, or markets. So let me ask you this: who owns your record?

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Kings Unwilling

By Rusty Guinn | November 2, 2018 | 3 Comments
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Humility is in short supply on Wall Street. But the humility! meme is not. Developing a process to understand the difference is important for any asset allocator.

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A False Sense of Stability

By Peter Cecchini | November 2, 2018 | 0 Comments
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In the first note from new Epsilon Theory contributor Peter Cecchini of Cantor Fitzgerald, Peter gives us a window into what a false sense of stability may mean for investors heading into the end of 2018.

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Insert XS Pun Here

By Rusty Guinn | November 1, 2018 | 3 Comments
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The iPhone XS launch is attached to the strongest pre- and post-launch narrative of any September launch since the iPhone 6. Does that tell you how to trade it? No. Can it help you think about how different outcomes might shape your thesis – and the thesis you believe other investors are following? Yes.

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Why Hope?

By Rusty Guinn | October 31, 2018 | 10 Comments
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It’s easy to feel like we need more than hope to pass through troubling times, and it’s usually true. But sometimes hope is exactly what we need.

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Stalking Horse

By Ben Hunt | October 31, 2018 | 3 Comments
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A stalking horse is a familiar shape that a hunter hides behind in order to get close to his prey. Once you start looking for them in markets, you will see them EVERYWHERE.

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It’s Twue, it’s Twue!

By Rusty Guinn | October 30, 2018 | 7 Comments
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Using facts in your analysis doesn’t make your analysis a fact. Punchy language that leans on these ‘facts’ doesn’t often stand up to scrutiny.

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An Ocean of Indifference

By Rusty Guinn | October 29, 2018 | 2 Comments
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Sometimes the absence of a clear central narrative can tell us something about a stock, too.

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Oh, hell, Martha, go ahead and burn yourself if you want to.

By Ben Hunt | October 29, 2018 | 9 Comments
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I can’t advise you on the Answers. I won’t advise you on the Answers. But I will advise you on the Process. Because that’s what we do for our fellow pack members.

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Innocent Monsters

By Rusty Guinn | October 28, 2018 | 14 Comments
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The paradox of the Widening Gyre is that even when you’re right, you may be wrong.

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Getting Out: A Godfather Story

By Ben Hunt | October 27, 2018 | 11 Comments
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“Just when I thought I was out, they pull me back in!”

Vito got out. Michael never did.

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Notes from the Diamond #3: Everything Has Its Price

By David Salem | October 26, 2018 | 7 Comments
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Allocators and investors can learn a lot from professional baseball about how to structure incentives and compensation for portfolio managers. And how NOT to do it.

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