“By suppressing volatility, central banks created a system unable to deal with bad news. Or to put it another way, leverage was built up on the premise that nothing bad happens.” — Andrew Lapthorne Given their swift plunge, the markets appear to many to be out of control, which increases the concern of investors. We...Read More

What is the headline risk? It is somewhat obvious, but the move of COVID-19 outside of China has shown that it has a higher probability of being a pandemic than it did before. The research we have reviewed shows that it is 20 times worse than the flu and can be transmitted much easier (not...Read More

“It looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait.” — G.K. Chesterton The Quarter in Review What a way to end the year! Global markets experienced a robust finish to 2019, with all but the so-called safe assets...Read More

Increasing Fragility “Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty.” -Nissim Nicholas Taleb Well-intentioned plans can bring unintended consequences. The world’s major central banks have been adding stimulus to the global financial system, hoping to lessen economic volatility and minimize...Read More

  “The investor of today does not profit from yesterday’s growth.” —Warren Buffett   The Quarter in Review Compared with previous quarters, the third quarter exhibited considerably more volatility with little appreciation. Most investment markets are showing signs of exhaustion due to continued uncertainty about trade wars, the negative interest rates in most developed countries,...Read More

Two weeks ago, Jamie Dimon, the CEO of JP Morgan, said, “So, we have taken liquidity out of certain products. And it won’t hurt you very much in good times. Watch out when times get bad and people are getting stressed a little bit.” He was referring to changes in banking regulations after the 2008...Read More

The Sound of Money Dying Wealth can be created and destroyed. Wealth is created when the investment of time, money, and energy arrives at an endpoint where the profit obtained is greater than the investment made. A simple example: you give your child ten dollars, allowing her to purchase supplies to open a lemonade stand....Read More

Liquidity—the growing scarcity of it right now—is something that has bothered us for a while. It’s getting harder to turn an asset into cash. Higher liquidity implies the ability to sell quickly at a price similar to recent pricing. One way of thinking about liquidity is to consider the difference in the liquidity of a...Read More

Wins above replacement (WAR) is a baseball metric that describes a player’s value in terms of how many more wins he brought to his team than a replacement-level player at his position would have. It is a measure of the effectiveness of an individual within the team and a statistical attempt to quantify if he...Read More

The global equity markets provide the closest thing we have to a free lunch. With little effort, they provide individuals with the means of growing their money over time and above the rate of inflation, thereby providing a savings method that not only preserves purchasing power but increases it. However, your mom was right when...Read More