Epsilon Theory In Brief

Epsilon Theory In Brief


Daily short-form pieces for those without the time (or attention span) for classic Epsilon Theory notes. Look out for regular features like the subscriber mailbag and guest contributions from within the Epsilon Theory network.

The Grammar of Risk

By Rusty Guinn | October 19, 2018 | 4 Comments

Take it from a list of terrible pop songs (and one OK, if overrated song from the Doors): lessons that provide an answer instead of a process are usually lessons badly taught and badly learned.

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Investment Diligence and the Cornelius Effect

By Rusty Guinn | October 18, 2018 | 6 Comments

Nobody likes to admit it, but the investment industry hires and invests with the smartest-seeming people that seem sufficiently likable. And it doesn’t work.

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Putting the Real Back Into Realpolitik

By Ben Hunt | October 18, 2018 | 4 Comments

“Order should not have priority over freedom. But the affirmation of freedom should be elevated from a mood to a strategy.” Yes, please.

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Saudi Arabia and the Common Knowledge Game

By Ben Hunt | October 16, 2018 | 26 Comments

An historic night it was.A pleasure to have a private dinner with the Crown Prince of Saudi Arabia, Mohammed bin Salman, his royal family and…

Locusts’ Lament

By Rusty Guinn | October 15, 2018 | 4 Comments

There is a huge gap in the narrative and language used to describe private equity and hedge funds. Even when it is correct, it calls for caution in our discussions and decision-making.

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Why Ben Sasse Loses the Game of You

By Ben Hunt | October 15, 2018 | 7 Comments

The Ben Sasse cartoon does not match the Ben Sasse life, and that’s a politically existential problem here in the widening gyre.

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Dogs, Dog Food, and the Curse of Some Talent

By Ben Hunt | October 14, 2018 | 20 Comments

The thing is, Butch, right now you got ability. But painful as it may be, ability don’t last. You came close but you never made it. And if you were gonna make it, you would have made it before now.

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We Were Soldiers Once … And Young

By Ben Hunt | October 13, 2018 | 36 Comments

Two emails from soldiers, both asking questions that I can’t answer alone. We need a pack.

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When Good Words Go Bad

By Rusty Guinn | October 13, 2018 | 2 Comments

Sometimes the meanings of words change. Sometimes that doesn’t mean anything. Sometimes it does.

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Why Am I Reading This NOW? 10/12/2018 Edition

By Rusty Guinn | October 12, 2018 | 0 Comments

A brief selection of stories from my daily news routine that made me wonder: “Why am I reading this now?”

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Complacency and Concern in Robo-Land

By Rusty Guinn | October 11, 2018 | 3 Comments

When it comes to robo-advisors, there is a wide gulf between common knowledge within the industry and without. I’m not sure what that means yet, but it means something.

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The Narrative Giveth and The Narrative Taketh Away

By Ben Hunt | October 11, 2018 | 1 Comment

The growing strength and coherence of Narrative Machine visualizations show the creation of powerful common knowledge around inflation, where everyone knows that everyone knows that inflation is rearing its very ugly head.

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Gell-Mann Amnesia

By Ben Hunt | October 10, 2018 | 5 Comments

“Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray’s case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the “wet streets cause rain” stories. Paper’s full of them.

In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know.”

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Et in Arcadia ego

By Rusty Guinn | October 10, 2018 | 4 Comments

Your time horizon is not infinite. Your institution’s time horizon is not infinite.

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Punting and the Tyranny of Risk Memes

By Rusty Guinn | October 9, 2018 | 0 Comments

The purpose of meme and narrative is getting us to sit down and shut up. In the investment committee room, no kind of meme does this more effectively – and more counterproductively, than the risk meme.

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How to Lose the Game of You

By Ben Hunt | October 9, 2018 | 3 Comments

Your autonomy of mind and spirit cannot be taken away by the State, the Oligarchy or the Mob. But you can give it away. Don’t.

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The Italian Job

By Ben Hunt | October 8, 2018 | 0 Comments

I wrote “Finest Worksong” in September, 2014 (reprinted below). Here’s the money quote:  At some point in the not so distant future there will be…

Mailbag: Deadly. Holy. Rough. Immediate.

By Rusty Guinn | October 8, 2018 | 0 Comments

Responding to a reader query about the relationship between risk and return, and whether its theoretical foundation is still solid.

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The Red King Is Us

By Ben Hunt | October 8, 2018 | 0 Comments

A cat may look on a king, ye know! — Proverbs and Epigrams of John Heywood (1562) Ben’s note: I wrote The Red King in…

Why Am I Reading This NOW?

By Ben Hunt | October 7, 2018 | 3 Comments

On October 4, 2018, Bloomberg BusinessWeek published a story claiming that Chinese hackers were able to “infiltrate America’s top companies” by planting a spy microchip…