| |We spend a great deal of time studying history, which, let’s face it, is mostly the history of stupidity.” -Stephen Hawking “We learn from history that we learn nothing from history.” -George Bernard Shaw I don’t want to sound pessimistic, but it cannot be helped when reviewing what lessons have been learned since the Financial Crisis. It has been a decade since the Financial Crisis; however, some of the same problems that led to the crisis seems to still exist. Yes, there are differences; subprime loans, mortgage excesses, and bank leverage will not be the problems. Some of the structures have changed and our knowledge of financial channel dynamics on the real economy has improved, but the meta-issues of credit, leverage, and liquidity still seem to exist with limited solutions and discussions … Read more 10 Years After the Financial Crisis: What Have We Learned?
| |With all of the discussion on news, “fake news”, misinformation, and opinion, it is important to focus on some first principles for investing and narrative as news. The narrative is not the facts from an announcement, but the story surrounding the price move coupled with facts. For any investor, it is important to realize that narrative generally follows prices, and prices do not follow narrative … Read more Narrative and Price – Know the Line of Causality
| |“Charlie Chaplin once entered a Charlie Chaplin look-alike contest in Monte Carlo and came in third; that’s a story.” – Movie line from “Lucky Number Slevin” This myth has been out in the public since the before the 1920’s. It has never been verified or reported as being true in any Chaplin biography, yet it continues to hold the attention of many when it is heard. It provides a cautionary warning about how we perceive in competitive group dynamics. Call this a variation of the Keynes beauty pageant story. … Read more Charlie Chaplin, Beauty Pageants, and the Consensus