All Epsilon Theory Content
The soul of Epsilon Theory is our long-form content, a library of hundreds of pieces written by Ben, Rusty and others over the course of the last 5+ years. These are the print-and-take-home-for the weekend notes that made Epsilon Theory what it is today.
It isn’t just that cannabis always seems to make the top of the Zeitgeist. It’s why – and sometimes the answer is, “Because people are paying for it to be at the top.”
In the midst of a complicated issue, an article from a small regional outlet manages to remind us of the power of AND in storytelling and connecting the understanding of those across the widening gyre.
This is our graph of the narrative structure of the last full week in financial markets news.
The Half-Happy Horror is the realization that pursuit of multiple objectives can end up with a baby split in two.
At best we give lip service to secondary or tertiary goals, all as part of some cartoon we’ve constructed about our “process”.
Yes, optimization is a scourge, and it hits every aspect of modern life. It hits the professional investor hardest of all.
So if you COULD prepare most Americans for their jobs and lives in less than a year, how WOULD you? Well, we took a shot at answering just that, and I’m sure you’ll all agree completely and wholeheartedly with our conclusions.
Management is not lying to you. It’s probably a really good turn-around plan. It could probably work out fine … IF they are given enough time. But they won’t be. Particularly when it’s the second turn-around plan.
Secularly declining companies ALWAYS run out of time.
It was one of the most expensive lessons of my investing career. And worth every penny.
The recent rally in U.S. equities is largely a result of market participants believing they can have their rate-cut cake and eat it, too.
ET contributor Pete Cecchini doesn’t think the Fed will cut rates proactively. Will they cut? Sure. But only if the real-world economic data deteriorates further. Which it probably will.
But don’t eat that cake just yet.
There’s a critical, indispensable feature of a free nation we call a free press. And then there’s the meme of free press!. The latter is a pure narrative construction, and a thing well supplied in the DC market.
It’s all been leading up to this.
We’re sharing the summary results of our core investment research project with the Narrative Machine.
If you’ve ever wondered, “Gosh, how DO you apply these cool narrative maps to an actual investment strategy?” … well, here’s your answer.
A tug-of-war is only a tug-of-war if both sides, y’know, are capable of pulling on the rope.
Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it. But this is the map that links …
If you’re going to trade on story and sentiment, more power to you. But over time, the mind naturally searches for justification and credibility for continued ownership of something. Take care when you start to feel that pull.
Sometimes a news article that’s all over the map is just a badly written article. Sometimes it’s like a glitch in the matrix. I think the changing narratives and weakening common knowledge around Big Tech are causing the latter.
What’s the most valuable commodity Gordon Gekko knows? Information.
How valuable is Wall Street research? How much information does Wall Street research have? LOL.
MIFID II is making the jump from Europe to the US. Time to polish those sell-side research resumes. As if you weren’t already.
There’s a point in any human activity – investing, politics, religion, or business – where a thing we do together becomes a thing in-itself. It’s a point that changes our thinking and the moral questions we are forced to answer. Knowing where this point lies is in all our activities is important.
The need to control and influence common knowledge knows no boundaries. And I mean literally no boundaries.
There are two narrative structures that have grown to a size and a level of cohesion that makes them impossible to be politically ignored.
One is the student loan “crisis”. The other is the Big Tech “monopoly”.
And yes, I’m putting those words in air-quotes, because the first isn’t really a crisis and the second isn’t really a monopoly. But since when did that matter in narrative-world?
Vanguard just announced a joint venture with Ant Financial in Shanghai. They’re not waiting around for a trade “deal”, and they’re not clutching their pearls about Chinese IP “theft”.
No, Vanguard is going to do what they always do … they’re going to obliterate their competition with the pricing power that comes from government collaboration.
Bannon and the rest of the America First brigade (which includes a LOT of bedfellows you see all the time on CNBC, like Kyle Bass) are going full-McCarthy. They’re going to have a “list”. They’re going to accuse anyone and everyone of “treason”.
It’s part and parcel of the China narrative transformation that Rusty and I have been talking about for a month now: the US-China narrative is now a national security narrative, not an economic trade narrative, and you can’t walk that narrative back until after the 2020 election.