Epsilon Theory In Full


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.

Notes from the Diamond #1: Always Something New to Learn

By David Salem | September 26, 2018 | 0 Comments
Yazstremski waits for the bounce.

Part 1 of a multi-part series that seeks to enhance readers’ deployment of both human and financial capital through the exploration of parallels between money management and professional baseball.

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Deadly. Holy. Rough. Immediate.

By Rusty Guinn | September 26, 2018 | 0 Comments
Stephen Fry and Mark Rylance engaging in Immediate Theatre

It’s hard to be larger than life in a smaller than life world. It’s hard to be authentic in your art without being artificial. Good theatre does just that. We’re hoping to do the same in Epsilon Theory.

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Notes From the Road: Roadkill

By Rusty Guinn | September 17, 2018 | 0 Comments
Get well soon balloon

Part 2 of the Notes from the Road series, about the value of and problems with adaptive frameworks. In this installment, an exploration of……roadkill, and what evolution can tell us about our adaptations.

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Things Fall Apart (Part 2)

By Ben Hunt | September 4, 2018 | 0 Comments
Tony Soprano stares at you menacingly

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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Notes from the Road: Bayes and the Boreen

By Rusty Guinn | August 20, 2018 | 0 Comments

In Part 1 of his Notes from the Road series, Rusty takes us to Ireland. There he begins an exploration of path-dependence and priors in our thinking as investors and citizens.

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Grant Williams “In Conversation” with Ben Hunt

By Ben Hunt | August 17, 2018 | Comments Off on Grant Williams “In Conversation” with Ben Hunt

Well, you know you’ve really made it in this business when Grant Williams shows up on your doorstep with his crew. What an honor to be part of Grant’s “In Conversation” video series, and what a blast we had making this film! As many of you know, Grant is a co-founder of RealVision, which provides …

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Things Fall Apart (Part 1)

By Ben Hunt | August 8, 2018 | 7 Comments

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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It Was You, Charley

By Rusty Guinn | July 16, 2018 | 0 Comments

Part 3 of the Three-Body Alpha series, written for anyone puzzled by value’s underperformance over the past NINE YEARS. Systematic value still works in markets warped by the Three-Body Problem, but works differently.

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Letter From a Birmingham Museum

By Ben Hunt | July 3, 2018 | 6 Comments

The goal of most Narratives is to convince you to sit down and shut up. But every once in great while, their goal is to fight fire with fire – to make you start thinking when others are telling you to stop.

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Mental Toughness!

By Rusty Guinn | June 8, 2018 | 0 Comments

Investing requires mental toughness, but it doesn’t require us to pretend that we — or our colleagues — are invincible. More often, it instead requires us to acknowledge our weakness.

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The Acrobat and the Fly

By Rusty Guinn | June 1, 2018 | 0 Comments

Many of the memes that drive our political behaviors inherently push us toward Competitive Games and tribalism. Resisting these memes means losing both arguments and credibility – and we have to be willing to do both.

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This Is Why We Can’t Have Nice Things

By Ben Hunt | May 22, 2018 | 0 Comments

Part 13 of the Notes from the Field series discusses the Narrative Machine, which can help us see the invisible memes that drive our political behaviors. Because you’re smart enough to make up your own damn mind.

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The Many Moods of Macro

By Rusty Guinn | May 9, 2018 | 0 Comments

Part 2 of the multi-part Three-Body Alpha series, introduced in Rusty’s recent Investing with Icarus note. The Series seeks to explore how the increasing transformation of fundamental and economic data into abstractions may influence strategies for investing — and how it should influence investors accessing them.

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The Narrative Giveth and The Narrative Taketh Away

By Ben Hunt | April 10, 2018 | 0 Comments

Two negative narratives have derailed ebullient markets – Inflation and Trade War. While I think both are here to stay, I’ve put inflation through the Narrative Machine first. The result? Inflation is Coming.

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Investing with Icarus

By Rusty Guinn | March 28, 2018 | 0 Comments

The allure of a fundamental truth is powerful. Investors are hungry for that kind of clarity about markets, but it doesn’t exist. In the first in a series, Rusty discusses a framework for investing in a time of Icarus.

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The Icarus Moment

By Ben Hunt | March 21, 2018 | 2 Comments

We live in a Cartoon Age, an era not of alienation per Karl Marx, but of alienation per Groucho Marx. What’s the cause, what’s the future, and what do we do about all this? It’s a TL;DR cri de coeur in Part 12 of Epsilon Theory’s Notes from the Field series.

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What is it, really?

By Rusty Guinn | March 6, 2018 | 0 Comments

The #1 question investors ought to ask of a financial services company trying to sell them something is: “What is it, really?” If you don’t know what you’re investing in, you’re liable to end up eating a lot of crunchy frogs.

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Good Job!

By Ben Hunt | March 1, 2018 | 0 Comments

This is Part 11 of Ben’s Notes from the Field series. I don’t need to calculate a Sortino ratio to know if my dogs are doing a Good Job. Same with active investment management. Same with active citizenship. It’s all about embracing Convexity, not as a mathematical cartoon, but as a philosophy.

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Is Volatility Back?

By Ben Hunt | March 1, 2018 | Comments Off on Is Volatility Back?

On this special episode of the Epsilon Theory podcast, we share an excerpt from a conference call we recorded on February 13 discussing our thoughts on the market selloff earlier in the month. You’ll hear from Christopher Guptill, co-CEO and chief investment officer at Broadmark Asset Management and Dr. Ben Hunt, author of Epsilon Theory.

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The Fundamentals Are Sound

By Rusty Guinn | February 8, 2018 | 0 Comments

Most investors think that other investors think that last week’s correction was about vol-selling. The real story? Everybody knows that everybody knows that inflation will change the way portfolios are built and managed.

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