Views

“I violated the Noah rule: Predicting rain doesn’t count; building arks does” - Warren Buffett. Can you live in harmony with risk? The consensus is that if you can measure risk, you can manage it. But how do you pick which risk to manage?

The Internet and finance are not normally associated with David Bowie. Yet he distributed Jump as an interactive PC CD-ROM in 1994; Telling Lies was an online-only release in 1996; and his Earthling concert was cybercast in 1997.

In an age of data overload and ‘trending topics’ it is often best to look at what is NOT trending: counter trends. Take Byron Wien’s Predictions for Ten Surprises, which he defines as events with one in three chances but he believes has a 50% likelihood.

Much ink has flowed about the state of hedge fund industry with CalPERS’ high-profile decision to exit blamed on poor returns and high fees. The supply of talented managers was always scarce, what if the talent started withdrawing from the game?

What kind of world do we live in? This is the most fundamental of investment questions. By this we typically mean “what is the outlook for inflation and economic growth?” Sometimes, the question is more socio-economic in nature. Rarely is it existential.

Shaken but not stirred is for James Bond’s martinis, not the average investor’s portfolio. This is why hedge funds, and other alternatives, have been ‘sold’ as path to smoother, uncorrelated returns.