The Three-Body Portfolio

In a two-body market, the interactions of fundamental data and prices are generally predictable. In a three-body market, the epsilon — investor behaviors in response to narratives — exerts a powerful gravitational force which must be considered when building a portfolio.

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The Two Churchills

If you can manage to find a truly independent voice in your personal, political and financial life, pursue it with reckless abandon. Don’t set it to the side so that you can build a brand or make an impact. Get your ass out of the boat, grab your bow, strap on your broadsword and sound the pipes. All that’s left is to decide what song you’re going to play.

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Gandalf, GZA and Granovetter

When we try to define others’ cartoon, we take away their agency, and strip away their humanity. And we do it with our clients, every time we guess what behavioral box they fit it.

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Before and After the Storm or: Make America Good Again

What does the path of history tell us? What does the aftermath of one of America’s greatest natural disasters and human tragedies tell us? What can we do to survive and escape a Competitive Game that doesn’t allow us to pull away from the table? If you’re reading this, you’re probably in the investment industry, or at least have an interest in financial markets. If you’re in the investment industry or in the financial markets, you like to win. So you’re not going to like my answer.

We play. And we lose.

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Whom Fortune Favors: Things that Matter #1, Pt. 2

Part 1 of this note highlighted the supremacy of the risk decision in portfolio construction. In this follow-up, Rusty observes that many investors may be assuming that the natural risk of asset classes is “right” for them.

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Whom Fortune Favors: Things that Matter #1, Pt. 1

President Camacho

Of all the decisions you make as an investor, how much risk you take outweighs all of them. It is more important than costs, more important than diversification, more important than picking the right stock / fund / investment.

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And They Did Live by Watchfires: Things that Don’t Matter #4

Oliver Bird

For the bored (read: profitable) investor, the bias to action is a constant threat. As we become more passive in our strategies, the moral license to ‘do something’ is exaggerated, and must be curtailed.

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I Am Spartacus: Things that Don’t Matter #1

I am Spartacus!

Oh, we all use index funds. ETFs. We all avoid the evils of acting trading, sure. But in the end, we are all active managers, friends. Yes, you, too.

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