I sent my NY vs SF article to some people, one of them is Aaron Brown. I had read a piece by him on the stock market on bloomberg and liked what I saw. I learned a few things from his feedback, first that I'm an worse writer than I thought. Most people that read what I said, don't understand what I meant. The article is about 6 pages long and yet it seems that he only understand what I meant when I said "if you take what Warren Buffett would recommend to a typical investor in terms of good investing behaviors, its the type of thing that one would learn from Sillicon Valley (and their literature) and not, most of the time, from NY (and their literature). NY is a high transaction cost, short-term capital gain, contrarian (that leads to second guessing where the market is and selling too soon) less optimistic mindset. SF is a low transaction cost, long-term capital gain, less contrarian, optimistic mindset. The latter seems a lot more aligned to a typical Buffett type of advice (and even his own methodology), while the former can be quite detrimental to an investor mindset. And that's what I mean." So the entire 6 page article could be better summed (for easier comprehension) in one paragraph. Whereas my more technical writing is more precise but a lot harder to understand Secondly, its amazing how quickly our dicussion entered into the 'talks vs action' discussion. Brown says that most NY funds don't invest the way they talk (which is true). So, they wouldn't for instance, short bitcoin in any sigificant size. He also argues that in SF, people will push an entrepenurial vision and talk about making it big when investing in startups but they will try to spread out risk as much as possible (by getting others to join) and try to extract fees as well. This is all true. I guess the broader messeage that I need to convey is that people ought to be careful about listening to 'noise' coming from talk/culture, especially if we are talking about NY and the stock market (as the noise there is a lot more harmful to an investor than the noise from SF). And also, people need to learn good investing/trading practices and principles by watching what people DO not what they say. Most people don't align talk with behavior, probably due to a lack of integrity/honesty, so its necessary to look through their BS and look on their portfolio to see what they really think
I do think there is more than integrity though. I think a lot of these people are trying to feed their inner biases because they think it will be helpful for them. Its like Chanos talking negatively about thinks, he thinks it will be good for him because he will help him because a better shorter. Or Soros talking shit about markets or the economy, historically a bearish bias has helped him make huge money so he feels comfortable feeding into that, expressing it, letting it develop. But both of them wont ACT on that bias, until certain things happen. There is a mismatch between talk and action. But the bias that they have its good (it serves them), its hard to hold big positions without confidence/conviction and a bias can provide that. Its kinda like an athetle tries to stay warm during a break by doing little sprints, jumping, moving their legs and arms, etc. They are trying to stay ready for the battle But the problem is that a lot of other people will listen to that verbal noise and draw lessons from it and make mistakes as a result The best way to learn about a great trader or investor is to get his brokerage statements for 10 years, not listen to his talk. In a lot of cases, THEY cant even explain why they are sucessful
Heck, I got through this myself. I tried to explain things are clearly as possible, yet it seems that most people will get a different message than I'm trying to convey in my article. This communication thing is difficult, but money speaks. You see someone buy or short ES, you understand quickly what they mean
So to try to sum in a way that is easy to understand, Market Wizards: Interviews with Top Traders should have been Market Wizards: Brokerage Statements from Top Traders. The latter would have been a lot more useful
I guess the lesson for me is that if I cannot condense something into one "pop" example, then I dont understand it enough and I need to do more thinking about it. My ramblings on SF vs NY could have been summed with "The Buffett stock investing principles are a lot more common in SF than NY. NY can easily lead one to become a bad stock investor given how far from his ideas it is". That is the pop example, that even a newbie could understand. The more technical and precise explanation involves payoff matrixes of stocks, convexity/powerlaws and how optimism in an investor better serves someone due limited risk vs unlimited reward. I suppose most people prefer pop examples and are more easily convinced by them. More technical people need the latter to be convinced (along with academic references) but they can be quite confusing. My mistake is usally mixing both, either I go pop or I go technical doing both can alienate both regular and technical people
Trump and North Korea exchange words about nuclear war, gold ramps several percent while 10 and 30y bonds are up modestly. That probably has more to do with the payoff matrix of each (gold has unlimited upside while bonds dont) rather than any market being 'smarter', or some kind of disagreement or any other nonsense that pundits bring up
"When it comes to assessing political matters (especially global geopolitics like the North Korea matter), we are very humble. We know that we don’t have a unique insight that we’d choose to bet on. Most importantly, we aim to stay liquid, stay diversified, and not be overly exposed to any particular economic outcomes. We like to hedge our bets, though we are never completely hedged. We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen, and treasuries) would benefit, so if you don’t have 5-10% of your assets in gold as a hedge, we’d suggest that you relook at this. Don’t let traditional biases, rather than an excellent analysis, stand in the way of you doing this (and if you do have an excellent analysis of why you shouldn’t have such an allocation to gold, we’d appreciate you sharing it with us)." https://www.linkedin.com/pulse/risk...01#comments-6301451369249280001&trk=prof-post