Friday, December 19, 2014

Links

Buffett and Munger on How to be a Hack [H/T The Big Picture] (LINK)
Related book:  The Warren Buffett Portfolio
Benedict Evans on the a16z podcast discussing his article "New questions in mobile" (LINK)

I finally got to the second two segments ("Inside Homs", "Mindfulness")  from the latest 60 Minutes, both of which were interesting (LINK)

The Conventional Wisdom On Oil Is Always Wrong (LINK)

While the title of the above article on oil says "Always", the actual wording in the article is "almost always wrong." This reminded me of an excerpt from George Soros' The Alchemy of Finance
In other words, financial markets constantly anticipate events, both on the positive and the negative side, which fail to materialize exactly because they have been anticipated. No wonder that financial markets get so excited in anticipating events that seem quite harmless in retrospect! It is an old joke that the stock market has predicted seven of the last two recessions. We can now understand why that should be so. By the same token, financial crashes tend to occur only when they are unexpected.

This last point should not be overstated. There are many events that actually occur in spite of the fact that they were widely anticipated. The collapse in oil prices is a case in point; the outbreak of the Second World War was another. It has become fashionable to be a contrarian, but to bet against prevailing expectations is far from safe. It will be recalled that, in the boom/bust model, events tend to reinforce prevailing expectations most of the time and contradict them only at the inflection points; and inflection points are notoriously difficult to identify. Now that the contrarian viewpoint has become the prevailing bias, I have become a confirmed anti-contrarian.