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2021-42 weekly bits and bites

Michael Burry, of The Big Short fame, recently put out everyone’s favorite hyperinflation scenario — Weimar Germany in the 1920s — as a concern.

This is everyone’s favorite hyperinflation proxy because it happened in a developed economy and people ended up pushing around wheel barrels full of worthless cash. The Fed is printing so much money it’s only a matter of time, right?


(6min _ Ben Carlson)

Paul Tudor Jones says inflation could be worse than feared, biggest threat to markets and society

Inflation is probably the single biggest threat to certainly financial markets and I think to society just in general

The founder and chief investment officer of Tudor Investment Corp. said that it’s time to double down on inflation hedges including commodities and Treasury inflation-protected securities, and that investors should avoid fixed income in this inflationary and low-rate environment.

“Equities are interesting. Certainly in an inflationary world, they are a much better bet than fixed income,” Jones said.

(7min _ CNBC)

It All Started With a Giant Computer in a Brooklyn Apartment

Dimensional Fund Advisors co-founder David Booth knew his bet on passive would depend on data. So he moved a noisy, hot Quotron into his two-bedroom. (An excerpt from Trillions, the recent book by Robin Wigglesworth.)

This was a seminal moment, setting the stage for the development of a new approach to managing money. Mindful of marketing opportunities, DFA initially dubbed them “dimensions,” but today other proponents mostly call it “smart beta” or “factor investing.”

(5min _ II)

10 truths about the stock market

The stock market can be an intimidating place: it’s real money on the line, there’s an overwhelming amount of information, and people have lost fortunes very quickly.

But it’s also a place where thoughtful investors have long accumulated a lot of wealth.

The primary difference between those two outlooks is related to misconceptions about the stock market that can lead people to make poor investment decisions.

(7min _ Sam Ro)

Categorizing for Clarity

Cash Flow Statement Adjustments to Improve Insight

The challenge is that the accounting has not kept pace with the economics. As a result, we suggest three
adjustments within the statement of cash flows to better categorize activities. (by Michael J. Mauboussin and Dan Callahan)

(11min _ Morgan Stanley)

The Attention Span. „Squid, Zen and The Abyss.“

The thing that gets between you and seeing the world clearly is all your protections, traumas, and defenses. In a business context, this is “the way things have always been done.” This is something that can actually get worse with age; we get more attached to our professional identity, status, and material possessions. But if you can’t evolve as fast as our accelerating world, you risk being left behind. As management icon Peter Drucker put it: “the greatest danger in times of turbulence is not the turbulence itself but to act with yesterday’s logic.”

(8min _ KCP)

“It is perfectly obvious that the whole world is going to hell. The only possible chance that it might not, is that we do not attempt to prevent it from doing so.”

_ Robert Oppenheimer

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