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.

Good Luck!

By Rusty Guinn | March 18, 2019 | 4 Comments

Ben has already talked about the biggest and most important thing we can do in the face of the admissions bribery scandal.

But many remain convinced that this scandal is an inflection point, a change in the Zeitgeist. It isn’t. But that doesn’t mean we can’t be watching for our opportunity to weaken the influence of the Church of Credential.

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The Ministry of Rites and the Compassionate Man

By Ben Hunt | March 17, 2019 | 14 Comments

“Oh, little Jimmy is going to 20-Years-Ago-This-Was-A-Second-Rate-University? I hear really good things about that school. Congratulations!”

“Thanks! We’re all very pleased. Everyone except my bank account, that is. Hahaha!”

It’s true, everyone is VERY pleased by the current system. Prestige university credentialing is a steam valve … \whispers\ just like elections.

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In the Trenches: Command and Control

By Peter Cecchini | March 12, 2019 | 11 Comments

It all started with the Maestro, Alan Greenspan, and his determination to create a Great Moderation. And it was all going so swimmingly, too, until the Great Disaster of 2008.

Now that there’s so little central banks can do, they are dead set on preventing another downturn before it even starts. So how does risk ‘price’ in capital markets when the cost of capital is constantly set too low? It doesn’t.

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Birth of a Salesman

By Rusty Guinn | March 11, 2019 | 3 Comments

Everything about the Zeitgeist is working to steer promising minds toward cultivating the skills and temperament needed to succeed in a Fiat World. We are creating a generation of missionaries.

Just one small problem: a competitive game among missionaries is a stag hunt. The dominant strategy for each of us individually is bad for us all. So what the hell do we do?

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The Grand Inquisition

By Demonetized | March 11, 2019 | 7 Comments

The Nudging State and Nudging Oligarchy believe they are giving us a gift: Freedom from Choice.

Except that it is neither a gift nor freedom in any sense. Rejecting it isn’t always easy and it isn’t always costless. But it’s the only choice for anyone who would be free.

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Fiat World

By Ben Hunt | March 8, 2019 | 16 Comments

We are immersed 24/7 in a Fiat World, where we are TOLD that inflation does not exist, where we are TOLD that wealth inequality and meager productivity and negative savings rates just “happen”, where we are TOLD we must vote for ridiculous candidates and buy ridiculous securities and borrow ridiculous sums.

We’re not Flat Earthers. Ha Ha! Those guys are idiots! Can you imagine believing that stuff?

No, we’re not Flat Earthers. We are Fiat Earthers.

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Rabbit Hole – Four Book Recommendations and an Amazon Story

By Neville Crawley | March 5, 2019 | 0 Comments

ET contributor Neville Crawley is simply one of the wisest people I know, and he outdoes himself in this killer Rabbit Hole note.

Come for the Amazon anecdote. Stay for the book recommendations.

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Heads I Win, Tails You Lose

By Ben Hunt | March 3, 2019 | 12 Comments

Why are institutional investors in trouble with the new Zeitgeist of capital markets transformed into a political utility?

Because everything you think you know about portfolio diversification will fail. Because emerging markets are going to be crushed before this is over. Because everyone’s inflation-investing muscles have atrophied to the point of helplessness. Because you think long-vol and crisis-alpha are things.

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In Praise of Work

By Rusty Guinn | March 1, 2019 | 19 Comments

The problem isn’t that we derive too much of our worth and value from work. The problem is that our jobs are becoming increasingly abstracted from work. Friends: Your work is holy.

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They’re Not Even Pretending Anymore

By Ben Hunt | February 27, 2019 | 5 Comments

Now that Jay Powell’s semi-annual Congressional testimony has finished up, it’s time for a brief walk down Memory Lane.

As with everything else in our Washington clown show, nothing really changes. This has all happened before.

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The Seed Delusion

By Rusty Guinn | February 26, 2019 | 4 Comments

The hobbyist farmer can afford to spread wildflower seeds to the wind and the elements. The professional farmer, on the other hand, doesn’t have this luxury. Neither do any of us as investors.

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Gravity Sucks

By Rusty Guinn | February 22, 2019 | 6 Comments

Usually we draw attention to narratives not because we like them, but because we believe investors can’t afford to ignore them. But the intense gravity of a directionless narrative is a different matter altogether.

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ET Live – 2.19.19

By Rusty Guinn | February 19, 2019 | Comments Off on ET Live – 2.19.19

We’re back with a third edition of ET Live! On the docket for this session: MMT and the Zeitgeist that brought it to the forefront of our political and economic discussions.

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C.A.F.

By Rusty Guinn | February 18, 2019 | 3 Comments

The hardest job for any financial adviser is knowing when a fiduciary mindset should guide us to take a stand, and when it should guide us to adopting flexibility. If we claim to have a process, we have to have an answer for this.

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The Alchemy of Narrative

By Demonetized | February 18, 2019 | 3 Comments

Every investor who wants to understand narrative and its impact on markets should read “The Alchemy of Finance”, by George Soros.

ET contributor Demonetized rediscovers the joys of Soros. It’s all reflexivity, all the time.

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Duck and Cover

By Rusty Guinn | February 14, 2019 | 3 Comments

We don’t have to treat it like a cardinal sin any time an author, politician, consultant, adviser or expert tries to make us feel a certain way. Just don’t be the only one at the table who doesn’t realize what’s happening.

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Rabbit Hole – Who’s Being Naive, Kay? Also, DARPA, Ribbon Farm, and Unknown Knowns

By Neville Crawley | February 13, 2019 | 3 Comments

ET contributor Neville Crawley is back from time well spent at an amazing library, with thoughts on no-end state architecture, marketing alpha, DOD AI, wonderfully goofy blogs, and a new addition to the Rumsfeld canon: unknown knowns.

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They Live!

By Demonetized | February 11, 2019 | 6 Comments

If you view the world through Clear Eyes, and hold loosely to your convictions, you’ll have an easier time adapting to a dramatic shift in the market regime than your competitors who’ve been lulled into a Narrative-induced fugue state. You’ll make up your own damn mind. You, your clients, and your business will all be better off for it.

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But We Need the Eggs

By Ben Hunt | February 10, 2019 | 1 Comment

We’re all passengers in the backseat of the State-driven car, and we all suspect that our drivers might be high-functioning lunatics, and we’re all terrified about what they might do next.

But we need the eggs.

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Blast from the Past

By Rusty Guinn | February 9, 2019 | 10 Comments

What the rise and fall of baseball cards can and can’t tell us about bubbles and the turning of markets into utilities.

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