jeudi 29 janvier 2015
mercredi 28 janvier 2015
mardi 27 janvier 2015
lundi 26 janvier 2015
La plaie des frais financiers
http://www.camagazine.com/archives-fr/edition-imprimee/2007/nov/features/camagazine6393.aspx
Compound interest can help save for the future, or it can bankrupt the world
http://laphamsquarterly.org/future/trust-issues
Funny article, except that in theory the trust couldn't grow faster then GDp
Funny article, except that in theory the trust couldn't grow faster then GDp
vendredi 23 janvier 2015
mercredi 21 janvier 2015
the political consequences of poor economics
http://blogs.ft.com/andrew-smithers/2015/01/the-political-consequences-of-poor-economics/?
TLDR :Realism seldom offers the instant gratification sought by the disgruntled, and populist policies thus usually represent a retreat from reason rather than a rise in analytical rigour. When countries have embraced populism, the resulting policies have habitually made matters worse.
TLDR :Realism seldom offers the instant gratification sought by the disgruntled, and populist policies thus usually represent a retreat from reason rather than a rise in analytical rigour. When countries have embraced populism, the resulting policies have habitually made matters worse.
mardi 20 janvier 2015
Book review & analysis The Education of a Value Investor
Book review & analysis The Education of a Value Investor by Guy Spier,
The book start out with an interesting analysis of how top educated hardworking people end up working on the edge of legality, pushed by a culture of performance at all price.
It then goes on exploring the many fallacies one must face in school. How students adapt to perform in that closed environment, where everything is black or white. And it explore why that can translate to fatal mistake in the real world where everything tend to be grey.
He follows up with a quite humble tale of his "classic" transformation( from Graham -->Buffet, Munger) and disclose how his father got him started.
Where I think the book gets really interesting is when he starts talking about bias. He doesn't stop at just vomiting Daniel Kahneman or Dan Ariely research such as how we perceive loss, our limited "willpower", the herd mentality or how we usually stick with our first idea. He actually explain how he implemented contermeasure to those bias.
Acknowledging he's not rational he explain how he set up his work environment to minimize bias. Moving away from NYC, forgetting about daily stock price movement, using a standing desk, naping, information reading order, the use of a checklist, taking responsibility for mistakes and surrounding by the right people.
I will delve on the last point as I think it's the most important. First I think our gregarious instinct push us to seek constant reinforcement from our social environment. During period of intense stress such as the last financial crisis like minded people make it easier to stand against your investor and your own mind allowing the opportunity to buy when everyone is fearful. And second, we actually become who we spend time with, I firmly believe in a simple rule of thumb, we're the average of our five closest friend. As Guy explain, choose them wisely.
The last part but not the least is about balance. Don't take it too seriously, enjoy what you do stay in shape and spread love around you. Because the ultimate score for success is love.
It's a well edited and entertaining book with plenty of reference for someone that wants to dive deeper( I appreciate authors who take the time to disclose their library).
Vincent
The book start out with an interesting analysis of how top educated hardworking people end up working on the edge of legality, pushed by a culture of performance at all price.
It then goes on exploring the many fallacies one must face in school. How students adapt to perform in that closed environment, where everything is black or white. And it explore why that can translate to fatal mistake in the real world where everything tend to be grey.
He follows up with a quite humble tale of his "classic" transformation( from Graham -->Buffet, Munger) and disclose how his father got him started.
Where I think the book gets really interesting is when he starts talking about bias. He doesn't stop at just vomiting Daniel Kahneman or Dan Ariely research such as how we perceive loss, our limited "willpower", the herd mentality or how we usually stick with our first idea. He actually explain how he implemented contermeasure to those bias.
Acknowledging he's not rational he explain how he set up his work environment to minimize bias. Moving away from NYC, forgetting about daily stock price movement, using a standing desk, naping, information reading order, the use of a checklist, taking responsibility for mistakes and surrounding by the right people.
I will delve on the last point as I think it's the most important. First I think our gregarious instinct push us to seek constant reinforcement from our social environment. During period of intense stress such as the last financial crisis like minded people make it easier to stand against your investor and your own mind allowing the opportunity to buy when everyone is fearful. And second, we actually become who we spend time with, I firmly believe in a simple rule of thumb, we're the average of our five closest friend. As Guy explain, choose them wisely.
The last part but not the least is about balance. Don't take it too seriously, enjoy what you do stay in shape and spread love around you. Because the ultimate score for success is love.
It's a well edited and entertaining book with plenty of reference for someone that wants to dive deeper( I appreciate authors who take the time to disclose their library).
Vincent
lundi 19 janvier 2015
Book review, The Dao of Capital
I really enjoyed reading The Dao of capital. It's a bit of a slow build up but well worth the time.
Apart from all the austrian wisdom, the two key concepts of the books are The roundabout and hyperbolic discounting.
Those two concept are the reason what I would call time arbitrage works.
The roundabout basically means that it's sometimes better to go right first in order to go left later and is really well visualized as the difference between a roundabout and a four stop. The roundabout is actually much more efficient from a time / energy perspective and it's a good metaphor of scarifying a bit now in order to get a hedge and momentum later (or accepting volatility for higher return).
Now on to hyperbolic discounting.
Basically hyperbolic discounting is the fallacy of thinking you'll have more discipline in the future. Ex I won't study now but tomorrow morning I will wake up early to do so ... People prefer to make a bit of money steadily (procrastination) but are setting themselves up to take a huge loss in the future (failing the exam) instead of paying a little every day in order to set the field for a huge win.
The consequence of those 2 key principles is that investor are looking for immediate yield, and in doing so make some weird investment & capital allocation ex; increasing stock buyback instead of long time investment when the discount rate should be at high time low.
This allow patient and disciplined capital allocator to trounce index long term.
From a strategical point of view the application of the roundabout tactic in Spitznagel investment is via the use of deep out of the money put option on the s&p 500 wich allow him to lose a bit now (the premium) in order to gain a lot in the future by providing liquidity in a time of crisis.
In summary a pretty good book linking austrian economics, value investing, psychology and a good understanding of market risk.
Vincent Thibault
http://daoofcapital.com/
Apart from all the austrian wisdom, the two key concepts of the books are The roundabout and hyperbolic discounting.
Those two concept are the reason what I would call time arbitrage works.
The roundabout basically means that it's sometimes better to go right first in order to go left later and is really well visualized as the difference between a roundabout and a four stop. The roundabout is actually much more efficient from a time / energy perspective and it's a good metaphor of scarifying a bit now in order to get a hedge and momentum later (or accepting volatility for higher return).
Now on to hyperbolic discounting.
Basically hyperbolic discounting is the fallacy of thinking you'll have more discipline in the future. Ex I won't study now but tomorrow morning I will wake up early to do so ... People prefer to make a bit of money steadily (procrastination) but are setting themselves up to take a huge loss in the future (failing the exam) instead of paying a little every day in order to set the field for a huge win.
The consequence of those 2 key principles is that investor are looking for immediate yield, and in doing so make some weird investment & capital allocation ex; increasing stock buyback instead of long time investment when the discount rate should be at high time low.
This allow patient and disciplined capital allocator to trounce index long term.
From a strategical point of view the application of the roundabout tactic in Spitznagel investment is via the use of deep out of the money put option on the s&p 500 wich allow him to lose a bit now (the premium) in order to gain a lot in the future by providing liquidity in a time of crisis.
In summary a pretty good book linking austrian economics, value investing, psychology and a good understanding of market risk.
Vincent Thibault
http://daoofcapital.com/
dimanche 18 janvier 2015
samedi 17 janvier 2015
vendredi 16 janvier 2015
mercredi 14 janvier 2015
Misconceptions about evolution
http://evolution.berkeley.edu/evolibrary/misconceptions_faq.phpA list of misconception people have on evolution : interesting ressource
mardi 13 janvier 2015
lundi 12 janvier 2015
samedi 10 janvier 2015
vendredi 9 janvier 2015
jeudi 8 janvier 2015
mardi 6 janvier 2015
Emerson on principles
“As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.” -Ralph Waldo Emerson
lundi 5 janvier 2015
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