PDF Download (Paid Subscription Required): After All, We Are Not Communists
If Don
After All, We Are Not Communists
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Ben, thank you for writing this note and pushing people including myself to up the subscription (as the Joker said in The Dark Knight “[i]f you’re good at something, never do it for free”).
I think though that people miss the point about The Godfather reference. The gang war between the Corelone’s and the other families was fought to a standstill and yet no one asked how it could be that Sonny Corelone who is a renowned fighter/killer could be fought to a standstill by Tattaglia. They assumed that it was because the other families lined up against them and refused to step back and think a little more… It took Sonny’s death and the meeting of all the Mafia bosses for Don Vito to realise the truth and adjust strategy accordingly.
Or to put it in another way, there are so many really smart money managers who are being beaten to a standstill. They had all the right experience and qualifications to get money from people to invest, and they hired the best and brightest to create and embed an investing edge… and yet many are being beaten to a standstill. They haven’t stepped back and asked why things are not working out, what has changed, what of their assumptions about how things work have changed and then adapt accordingly. Like Sonny many will end up permanently out of the game… You gotta be less like Sonny and more like Don Vito who understood the game and how it was really played.
A gentle Tuftean nudge regarding data visualization: the variation in x-axis distance metrics between the two “hypothetical growth” charts distort perceptions of relative performance when compared side-by-side. Of course, the comparisons are not complex, and one may readily look to the numbers. But ideally, visual intuition should align w/ the numbers.
Ben, I continue to be in awe of the insights you and your team share, and often have to re-read what you say, looking up words like entelechy when I see them used. I’m just a dumb 'ol Florida Gator. Scientologists are taught to do so as well, FWIW, but I digress. I’m wondering if the active manager is really a misnomer because of so much money piling into index funds where something like half or more of the stocks aren’t profitable and share prices are only rising because of ZIRP, NIRP the FED and buybacks, not more profits. Active management like Value, Momentum, Dogs of the Dow, and even candlestick Dojis are all but a reflection of what’s happening to dumb money pouring into the markets and HFT. I guess you openly conclude that the only way to draw water is with a higher level subscription. Full Disclosure by you. Full Hearts, Clear Eyes, Can’t Lose?
Are CLOs in your data? Seems to me that there is much mention of CLOs in the media over the last 6 months, including in Fed speak. The takeaway I have from this article would seem to direct me to short CLOs at this point!