Neil deGrasse Tyson quote

“The atoms of our bodies are traceable to stars that manufactured them in their cores and exploded these enriched ingredients across our galaxy, billions of years ago. For this reason, we are biologically connected to every other living thing in the world. We are chemically connected to all molecules on Earth. And we are atomically connected to all atoms in the universe. We are not figuratively, but literally stardust.” –Neil deGrasse Tyson

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Related previous post: The Most Astounding Fact About the Universe

Currency speculators....

From Expeditors International of Washington’s latest 8-K (after they had also quoted from Ben Stein’s book How To Really Ruin Your Financial Life and Portfolio):

Currency speculators seem to be very much like your neighbor who makes frequent trips to Las Vegas. One soon learns that the correct inquiry of your neighbor upon his or her return is not 'How much did you win?' If they won, they tell you about it. If they lose, you might see a “For Sale” sign on the BMW in the driveway…and in extreme cases…a realtor's sign in front of the house, soon to be followed by a large moving van blocking your drive way. As we all know, everyone wins in Las Vegas…and it's the winning most people talk about. Unfortunately (or fortunately if you are a casino owner), everyone who gambles in Las Vegas also loses in Las Vegas…and the existence of all those marvelous edifices in the desert are ample proof that what's lost in Las Vegas stays in Las Vegas….and obviously your neighbor and other visitors lose more than they win. Most gamblers/speculators in either Las Vegas or in the currency markets who win big are more lucky than they are good in most instances. Granted the odds may be better if you are speculating on currencies in some manner…as you have the option to bet on governments to do something stupid…but that said, and to Stein's complexity point, there are enough times when governments do something smart when you are expecting them to do something stupid (or they can even do something less stupid than the other governments impacting the currency markets) that you can really get burned without even lighting the fire yourself. Big financial institutions do a lot of currency speculation. But with them, if they win, like your gambling next door neighbor, they tell everyone about it. If they lose, they don't talk about it…and if they lose a lot, unlike your gambling neighbor who just had to move, their own governments (We the People in other words), who they might well have even bet against, bail them out. Nice work if you can get it…and can still look yourself in the mirror in the morning. 

If one were to equate our philosophy on currency exposure to personalities in Las Vegas, we'd be the person who feels a hankering for an after-dinner drink and so throws a couple of coins in a nickel slot and stands around in the casino on the way back to their hotel room just long enough to get a couple of free drinks, the cost of which, had they been paid for, would have been much more than anything put in the slot machine. Better to get a few free drinks while losing a little money…with the possibility of winning a little on occasion, than getting a lot of free drinks that the big wagers get, while losing your spouse's car and maybe your house in the hopes you'll find out that you have become more lucky than good.

Washington Irving quote

Found via Jon Shayne. This is from Washington Irving’s The Crayon Papers, and there is a lot of investing wisdom packed into this single paragraph. It is from an introduction to the section he wrote on The Great Mississippi Bubble.

When a man of business, therefore, hears on every side rumors of fortunes suddenly acquired; when he finds banks liberal, and brokers busy; when he sees adventurers flush of paper capital, and full of scheme and enterprise; when he perceives a greater disposition to buy than to sell; when trade overflows its accustomed channels and deluges the country; when he hears of new regions of commercial adventure; of distant marts and distant mines, swallowing merchandise and disgorging gold; when he finds joint-stock companies of all kinds forming; railroads, canals, and locomotive engines, springing up on every side; when idlers suddenly become men of business, and dash into the game of commerce as they would into the hazards of the faro table; when he beholds the streets glittering with new equipages, palaces conjured up by the magic of speculation; tradesmen flushed with sudden success, and vying with each other in ostentatious expense; in a word, when he hears the whole community joining in the theme of "unexampled prosperity," let him look upon the whole as a "weather-breeder," and prepare for the impending storm.

Cash gives the private investor an edge – By Merryn Somerset Webb

Fund managers don’t like holding cash, but individual investors can and should

I wrote last week about the many ways in which traditional long only fund managers are institutionally prevented from performing as well as they should – given their above-average intelligence and ample resources.

But there was one thing I left out. It is that the majority of fund managers never hold cash as an asset class. They don’t consider it to be part of their job.

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It isn’t just individual funds that veer away from cash. The industry as a whole is also very keen to encourage us all to be fully invested at all times. It isn’t good for them for us to be sitting around with our money in savings accounts losing money to inflation, as opposed to being in investment funds and losing money on fees. Hence the regular press releases pointing out the difficulty of timing the market and the hideous long-term results of being out of the market on the two, four, five or perhaps 10 best days of the year. The propaganda works; almost all investors avoid holding cash.

Ask anyone with a neat nestegg sitting in the bank how they feel about it and they’ll answer that they’re mildly guilty that it isn’t “working” for them. But the truth, I think, is that being able to sit in cash– without having to put up with snide remarks about being paid to do nothing – is yet one more factor that gives the intelligent private investor an edge over the intelligent institutional investor.

The key to this is to think of cash as offering what economists like to call optionality. Sure, it hasn’t been a comfortable thing to hold over the last six months as markets have frothed and bubbled and inflation has eaten away at its purchasing power. But great fortunes don’t rest on holding what other people are holding at the top. They rest on being able to buy what other people can’t afford at the bottom.

I spoke to James Montier of GMO at the London Value Investor Conference a few weeks ago and asked him how much cash he holds. The answer was that his own assets are in the GMO Global Asset Allocation Fund, one of the few that is comfortable holding cash and right now is awash with the stuff.

Jamie Mai quote

From the book Hedge Fund Market Wizards:

“As a general observation, markets tend to overdiscount the uncertainty related to identified risks. Conversely, markets tend to underdiscount risks that have not yet been expressly identified. Whenever the market is pointing at something and saying this is a risk to be concerned about, in my experience, most of the time, the risk ends up being not as bad as the market anticipated.”

How Simplifying Your Investment Process Can Make You a Better Investor

James East of Mercertus Capital on His Investment Approach


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Nassim Taleb quote

“Now, as a skeptical empiricist, I do not consider that resisting new technology is necessarily irrational: waiting for time to operate its testing might be a valid approach if one holds that we have an incomplete picture of things. This is what naturalistic risk management is about. However, it is downright irrational if one holds on to an old technology that is not naturalistic at all yet visibly harmful, or when the switch to a new technology (like the wheel on the suitcase) is obviously free of possible side effects that did not exist with the previous one. And resisting removal is downright incompetent and criminal (as I keep saying, removal of something non-natural does not carry long-term side effects; it is typically iatrogenics-free).” –Nassim Taleb, Antifragile

The Atlas of Public Stocks – A Free Website That Maps All Publicly Listed Companies

This is a pretty cool site, courtesy of my friend Miguel:

Dear Readers,

I’m especially excited to announce my first web project. It’s called The Atlas of Public Stocks it is a searchable map of all publicly listed companies from around the world. In other words, you can use this map to locate public companies near a given address.

How I Came Up With The Idea:

Last year I was planning an investment trip to Munich, Germany and struggled to identify local public companies. I created this website to help investors facing similar situations.

Meet the Man Who Sold a Month-Old App to Dropbox for $100M

When Mailbox sold itself to Dropbox for a reported $100 million or so this March, the month-old iPhone app wasn’t even available to the public. People could download the email organizer, but using it required joining a mailing list that stretched to nearly 800,000 names at one point.

Mailbox was popular because it provided innovative new ways to organize and clear an inbox. Users can swipe a message to the left to “snooze” it, a command that instructs Mailbox to resurface the email after a set period of time. Other swipes — hard left, right, or hard right — archive, delete, or file messages.

Today, Mailbox is releasing its first new product from within Dropbox, an iPad version of its flagship iPhone app. Future releases will bring Mailbox to Android and enable support for Yahoo mail and other services beyond Gmail.

We sat down with Mailbox CEO and co-founder Gentry Underwood to ask about his app’s incredibly rapid success and its future within Dropbox.

Kyle Bass on CNBC

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