Year In Review

We’ve had a heckuva busy year at Epsilon Theory, so to ring out 2017 I thought it might be helpful to distribute a master list of our publications over the past 12 months. We’re long essay writers trying to make our way in a TLDR world, so even the most avid follower may well need a map!

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The Three-Body Portfolio

In a two-body market, the interactions of fundamental data and prices are generally predictable. In a three-body market, the epsilon — investor behaviors in response to narratives — exerts a powerful gravitational force which must be considered when building a portfolio.

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Whom Fortune Favors: Things that Matter #1, Pt. 2

Part 1 of this note highlighted the supremacy of the risk decision in portfolio construction. In this follow-up, Rusty observes that many investors may be assuming that the natural risk of asset classes is “right” for them.

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And They Did Live by Watchfires: Things that Don’t Matter #4

Oliver Bird

For the bored (read: profitable) investor, the bias to action is a constant threat. As we become more passive in our strategies, the moral license to ‘do something’ is exaggerated, and must be curtailed.

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