"Markets can do anything. If you look at the history of markets, you see everything under the sun. But we have no time frame [for doing something]. If the money piles up, then it piles up. And when we see something that makes sense, we're willing to act very fast and very big. But we're not going to act on anything if it doesn't check out. You don't get paid for activity. You only get paid for being right." --Warren Buffett (1998 Berkshire Hathaway Annual Meeting, via Outstanding Investor Digest)
Zillow, Aggregation, and Integration - by Ben Thompson (LINK)
In the era of Donald Trump, New England’s biggest GOP donor is funding Democrats [Seth Klarman] [H/T Will & Linc] (LINK)
A $76,000 Monthly Pension: Why States and Cities Are Short on Cash (LINK)
Netflix: The Future of Entertainment or House of Cards? - by Aswath Damodaran (LINK)
A Sidelined Wall Street Legend Bets on Bitcoin [H/T @williamgreen72] (LINK)
The Rise, Reign, and Fall of W.P.P.’s Martin Sorrell - by Ken Auletta (LINK)
To Everyone Who Asks For ‘Just A Little’ Of Your Time: Here’s What It Costs To Say Yes - by Ryan Holiday (LINK)
The Shellfish Gene - by Ed Yong (LINK)
An excerpt from a 2011 article by Nassim Taleb and Mark Blyth ("The Black Swan of Cairo") that may be worth thinking about today:
Political and economic “tail events” are unpredictable, and their probabilities are not scientifically measurable. No matter how many dollars are spent on research, predicting revolutions is not the same as counting cards; humans will never be able to turn politics into the tractable randomness of blackjack.
Most explanations being offered for the current turmoil in the Middle East follow the “catalysts as causes” confusion. The riots in Tunisia and Egypt were initially attributed to rising commodity prices, not to stifling and unpopular dictatorships. But Bahrain and Libya are countries with high GDPs that can afford to import grain and other commodities. Again, the focus is wrong even if the logic is comforting. It is the system and its fragility, not events, that must be studied—what physicists call “percolation theory,” in which the properties of the terrain are studied rather than those of a single element of the terrain.
And a related quote from Taleb in The Black Swan (2007):When dealing with a system that is inherently unpredictable, what should be done? Differentiating between two types of countries is useful. In the first, changes in government do not lead to meaningful differences in political outcomes (since political tensions are out in the open). In the second type, changes in government lead to both drastic and deeply unpredictable changes.
Likewise, dictatorships that do not appear volatile, like, say, Syria or Saudi Arabia, face a larger risk of chaos than, say, Italy, as the latter has been in a state of continual political turmoil since the second war. I learned about this problem from the finance industry, in which we see “conservative” bankers sitting on a pile of dynamite but fooling themselves because their operations seem dull and lacking in volatility.