Wisdom in fragments

Film is a reflection of society, both present and past.

Unknown.

I made the analogy of earthquake faults- when they get aligned, they either all move, or they don't move- we also have this diversity of micro fault-lines that fail, and I think that's a huge problem.

Hedge Fund Manager & Author of "The Black Swan" Risk Management

We have a much more connected marketplace. We have had, what I reckon to be an extremely overvalued stock market since 2000. When you have that situation, you are prone to very sudden negative revaluations.

Hedge Fund Manager & Author of "The Black Swan" Risk Management

Here I am the fool looking to fail frequently. I want to either hit a homerun or walk or even strike out. This means I fail far more often than I succeed. But the important point is that what I lose when I fail is trivial, epsilon compared to what I make when I succeed.

Hedge Fund Manager & Author of "The Black Swan" Risk Management

People like to compare such rare payoffs to lottery tickets. This is way off. We know from the availability heuristic that people overestimate the likelihood of an event based on their ability to envision it—the risk of plane crash versus car crash is the best example of this.

Hedge Fund Manager & Author of "The Black Swan" Risk Management

Every nation is dependent on every other to shore up the system, and there are few (if any) instances where a country is fully shielded against the default of another.

We must act now, before we reach economic checkmate.

The last quarter century of globalisation has utterly transformed how our markets and nations do business. With that in mind, we have to appreciate that our economies not only provide profound benefits and wealth-creation opportunities, but also hold very real (and untended) existential threats to the livelihoods of billions of citizens.

We can see, therefore, that sovereign debt has a systemically important role in the stability of the global economy, the economies of individual states and even the very peace of a country. To be able to then treat this as a market instrument- while appropriate at a time when capital flows were gentile and considered- is clearly not when we can write $2 trillion or more from an entire economy in a matter of seconds.

Stock prices suffer a one-two punch. Rising raw material prices tends to compress margins or earnings, and rising interest rates tend to compress p/e ratios, as earnings yield must compete with interest rates.

Unknown.

Like everyone, investors get hurt by the implicit loss of purchasing power of each dollar inflation implies. However that is only the tip of the iceberg, as this loss is likely to be compounded by the tendency for traditional investments to suffer additional erosion.

Unknown.

Today away from monetary policy, global factors drive inflation, and for tangible goods emerging market drivers are key. We note commodity consumption per unit of GDP explodes as per capita income rises from $3000/yr into the $5000 to $15000 bracket.

Unknown.

Firstly, inflation is always and everywhere a monetary phenomena. Secondly, the Phillips curve is dead and buried. US employment, and domestic measures of capacity utilization didn't even work 40 years ago! We stuck a stake in the heart of such measures about 15 years ago.

Unknown.

The absolute focus must be on reducing inequality. This means creating strategies which provide economic opportunity - investing in industries that provide employment rather than profit, investing in education, and providing a fairer deal for those who form the labour force.

Unknown.

Increasingly heavy-handed purges of crime will simply move perpetrators into different industries, increase the severity of crime, or create extremist groups. There is very little more dangerous in the world than individuals with nothing to lose.

Unknown.

Crime, for those living in poverty, can become a business. Much like any other capitalist enterprise, their business further exacerbates inequality in society. The poor feel aggrieved by inequality - they exist in a world where they are disproportionately unrewarded for their input into the economy.

Unknown.