Second Life: Stories Worth Another Look
I warn you in advance that this may be indulgent on my part: You see, if you’ve been writing for as long as I have been, there are always articles that you are extremely proud of (quality), but that just do not perform (quantity), for whatever reason. Great and rare is the day when your favorite pieces perform well (quality and quantity).
Why do some articles fail to perform? The most obvious reason is that these pieces just weren’t that good — and the audience knows it! But at the risk of ridicule, I want to offer up some posts that I think you may have wrongfully overlooked and deserve a second life. I hope that you enjoy them!
Losing Money to Preserve Capitalism
Back in late 2011, I spent an enormous amount of time researching the history of capitalism and capitalistic thinking in order to write this post, and its second part, which outlined the history of the modern bank bailout. In short, I was using history to show that a necessary part of capitalism is incurring losses. After all, it is losses that signal to capitalists that they are doing something dumb. Of course, in writing this post I am hoping the market gives me a second chance, too!
Untangling the Ethics of Incentives
Of the more than a thousand articles I have written, this piece is one that always makes me smile. It is an interview with author Ruth W. Grant about her book, Strings Attached: Untangling the Ethics of Incentives, which I consider among the best business books I have ever read. What is more, the book is about that perennially important topic to investors: incentives. Grant has written the most penetrating book about incentives that I have ever read, and here is a rare interview with the very media-shy Grant. Where else can you get this killer content?
Calculating the Illusive Size of Mr. Market
Every single day an egregious error takes place in the business press, as well as in the minds of many investment professionals. Namely, they anthropomorphize the stock market. That is, they attribute humanlike traits to the market. We hear things like, “Today, the Market loved technology shares,” all the time. So I got to wondering, just how big is “the market”? On a daily basis, what percentage of the market is actually trading? I think the answer will shock you.
How Well Does the Stock Market Discount?
Similar to the post immediately above, this one involved original analysis that I conducted. When Dell took itself private, it was a rare chance to evaluate the price discounting capabilities of the market. Put another way, are markets efficient over the long-term at estimating the value of a business? Read this piece to see what I concluded.
Reframing the Gold Standard Debate: The Fixed-Money-Supply Standard
Believe it or not, this post is not really about the gold standard. Despite its title (maybe why it was kind of a clunker), it is actually more about alternative currencies, and its thinking actually predated the huge interest in bitcoin. Subsequently, many commentators have echoed my thoughts about alternative currencies. Whether you believe in alternative currencies or not (and they are in my “watch” category), the criteria identified herein should help you understand the issues a bit better.
An Overview of Alternatives to Credit Ratings
During the global financial crisis (are we out of the woods, yet?) of 2008–2009, credit ratings agencies faced an onslaught of criticism. They survived, partially because of the quality of their work, but also because not many people are aware of what alternatives there are to credit ratings. Here is an overview of some of the alternatives.
Skills That Separate You as an Investment Manager: Context Creation
Though this piece was part of a very successful series — even republished by our sister publication, CFA Institute Magazine — it just did not perform that well. I was very surprised, because establishing context is probably the most important of all investment skills. Heck, I even had a multi-decade experienced UK-based hedge fund manager write me and tell me the piece taught him something radically new and important. In the off chance he and I are not just breathing the same fumes, I feature it again here.
Capitalism: It’s as Much About Cooperation as Competition
Of all of the posts I have written, the one that I am most proud of, by any positive measure, is this one. Heck, I even began writing it a year before we published it here on Enterprising Investor, and due to my tardiness I ended up getting scooped by Scientific American by a couple of days! I thought that piece might drive traffic to my own, but alas, no. In any case, my long-held belief is that cooperation is equally vital to the success of capitalism. Yet, the word that most people think of in connection to capitalism is competition. I hope this article changes your mind.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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