Monday, September 29, 2014


60 Minutes: Segments with President Obama and Jack Ma (LINK)

Michael Lewis thinks the secret recordings of conversations between the Fed and Goldman are a big deal (LINK)

Jason Zweig: Should Investors Chase After Bill Gross Again? (LINK)

Cook & Bynum Q2 Letter (LINK)

Hussman Weekly Market Comment: The Ingredients of a Market Crash (LINK)
The most hostile subset of market conditions we identify couples overvalued, overbought, overbullish extremes with a breakdown in market action: deterioration of breadth, leadership and other market internals, along with a shift toward greater dispersion and weakening price cointegration across individual stocks, sectors and security types (what we sometimes call “trend uniformity”). The outcomes are particularly negative, on average, when that shift is joined by a widening of credit spreads. That’s a shift we observed in October 2000. It’s a shift we observed in July 2007. It’s a shift that we observe today. 

Present market conditions comprise an environment where risk-premiums are thin and are being pressed higher... The current shift does not ensure that the market will decline over the short-term, nor that it will crash in this instance. It’s also worth noting that we don’t rely on a crash, and that we can certainly allow for the possibility that valuations and market internals will improve in a way that reduces or relieves our concerns without severe market losses. 

Still, what we are concerned about here and now is the steeply negative average behavior of the market in historical periods that match present conditions, as well as the decided skew of that probability distribution, which features extreme negative observations far more often than would be expected under a “normal” bell-shaped distribution. Interestingly, the 3-day average implied skew embedded in S&P 500 index option prices surged last week to the highest level on record. The potential for a “fat-tail” event should be taken seriously here.
Brain Pickings: Sam Harris on the Paradox of Meditation and How to Stretch Our Capacity for Everyday Self-Transcendence (LINK)
Related book: Waking Up
The Stoicism Today blog has put a book together, which looks like a collection of past articles: Stoicism Today: Selected Writings