One of the things that baffles me about people is how they completely misunderstand risk. Lots of my friends panic about things that have no real chance of killing them, but ignore the things that will. This can lead us to make irrational decisions, and sometimes irrational policy. What really will kill us? Watch and learn.
What Kills Us? How We Understand Risk.
Why Is the Job-Finding Rate Still Low? Victoria Gregory, Christina Patterson, Ayşegül Şahin, and Giorgio Topa Liberty Street Economics Feburary 19, 2014 Fluctuations in unemployment are mostly driven by fluctuations in the job-finding prospects of unemployed workers—except at the onset of recessions, according to various research papers (see, for example, Shimer [2005,…Read More
Internet Psychology 101: Swearing and Name-Calling Shut Down the Ability to Think and Focus Psychological studies show that swearing and name-calling in Internet discussions shut down our ability to think. Twi professors of science communication at the University of Wisconsin, Madison – Dominique Brossard and Dietram A. Scheufele – wrote in the New York…Read More
My afternoon train reading: • Hedge-Fund Genius Isn’t Really Sold on Hedge Funds (Bloomberg View) • The Best Investment Strategy? Getting Out of Our Own Way (NY Times) see also Our next big crisis will be a retirement crisis (MarketWatch) • Gross: The Second Coming (Pimco) • How I learned to stop worrying and love the Russian invasion…Read More
Category: Financial Press
click for larger chart Source: Visualizing Economics When it comes to the top 0.01 percent of earners, it is extremely challenging to describe the differences in terms of income. Words often fail to convey the massive range. Fortunately for us, Catherine Mulbrandon of Visualizing Economics has put together a simple chart that shows just…Read More
My morning reading, served fresh with corn muffins and coffee: • Yale: Alpha’s Not Dead, But Finding It Is Hard (AI-CIO) • The Markets Are Punishing Russia More Swiftly Than Diplomats Ever Could (Quartz) see also How Stocks React to Geopolitical Uncertainty (MoneyBeat) • The Cost of Bitcoin (stratēchery) • Nonsense Forecasts (Reformed Broker) see…Read More
Category: Financial Press
On the first of each month, I send a letter to our investors describing what we see in the world relative to their portfolios. We always try to identify some “big picture” issue, usually one that is overlooked. The goal is to have our clients understand our thought process. One of my favorite analytical devices…Read More
This is one of those things that really annoys me:
One year ago today, Charles Nenner (of the Charles Nenner Research Center) went on TV. His specialty is Cycle Research (whatever that is). He made a very bold call, forecasting a drop to 5,000 in the Dow.
It was not merely that the 50% drop did not come pass. What happened was the opposite, a 32% rally. And so, one year later, we have to recall this prognostication as one of the very worst of the year. The calls on Apple and Intel and Semis were nearly as bad.
Worst call of 2013:
March 4 (Bloomberg) — Charles Nenner Research Center Executive Director Charles Nenner discusses the markets and his prediction of the Dow dropping to 5,000 this year.. He speaks on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)