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.
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.
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.
“Order should not have priority over freedom. But the affirmation of freedom should be elevated from a mood to a strategy.” Yes, please.
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…
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.
The Ben Sasse cartoon does not match the Ben Sasse life, and that’s a politically existential problem here in the widening gyre.
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.
Two emails from soldiers, both asking questions that I can’t answer alone. We need a pack.
Sometimes the meanings of words change. Sometimes that doesn’t mean anything. Sometimes it does.
A brief selection of stories from my daily news routine that made me wonder: “Why am I reading this now?”
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.
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.
“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.”
Your time horizon is not infinite. Your institution’s time horizon is not infinite.
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.
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.
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…
Responding to a reader query about the relationship between risk and return, and whether its theoretical foundation is still solid.
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…
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…