Forecasting is hard. And not because people aren’t smart, but because trivial accidents can be influential in ways that are impossible to foresee.
(5min _ MorganHousel)
Financial markets are entangled and uncertain. When will economists let go of physics envy to embrace the quantum revolution?
Quantum is the scientific equivalent of suitcase wheels. The reason this useful innovation hasn’t caught on, or been rolled out, more generally in areas such as economics isn’t because it’s impractical or too hard – it’s because it’s too feminine. Or rather, too Female, in a sense to be defined below.
Of course, this suggests another potential explanation for why quantum ideas are not applied outside of physics – which is that they just don’t work. But there is increasing evidence that they do. And what seems extraordinary, is the fact that for so long they hadn’t even been tried.
(25min _ aeon)
(7min _ BenCarlson)
Of course, being diversified means you’re never going to be invested exclusively in the best-performing names either. You don’t win games by blow-out margins practicing diversification. And sometimes you may even lose for a time. The examples I’m using here are short-term in nature.
Diversification is not undefeated but it’s never gotten blown out either.
(5min _ BenCarlson)
Even so, I could have done things better. Here are two lessons that took me decades more to learn—and which could have made my financial journey far smoother:
- First, a suboptimal portfolio you can execute is better than an optimal one you can’t.
- Second, mentally compartmentalize your portfolio.
(11min _ WilliamBernstein)
11/ Finally, you can try to cognitively decouple. That means a/suppress your automatic response; and b/engage in hypothetical reasoning. „It is the mark of an educated mind to be able to entertain a thought without accepting it.“ Fin.— Michael Mauboussin (@mjmauboussin) February 6, 2022
In one of the greatest bull markets ever for a company of its nature, Twitter has cost investors money during its life as a public company. We break down what went wrong and why there are reasons to be optimistic now.
“Nothing can make our life, or the lives of other people, more beautiful than perpetual kindness.” _Leo Tolstoy