The Epsilon Theory Archive

“History doesn’t repeat itself, but it often rhymes.” Mark Twain said that, or Abraham Lincoln depending on what corner of the internet you find yourself on any given day. Likewise, there are common themes, topics and subjects that run throughout the Epsilon Theory archive. All of our writing is categorized, tagged and organized to be easily accessible, but beware: your search for truth on one matter may very well lead you down any number of rabbit holes (and we hope that it does).

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note

We’ve had a heckuva busy year at Epsilon Theory, so to ring out 2017 I thought it might be helpful to distribute a master list of our publications over the past 12 months. We’re long essay writers trying to make our way in a TLDR world, so even the most avid follower may well need a map! Read more »

note

In a two-body market, the interactions of fundamental data and prices are generally predictable. In a three-body market, the epsilon — investor behaviors in response to narratives — exerts a powerful gravitational force which must be considered when building a portfolio. Read more »

note

We’d like to believe that information and analysis can tell us the true value of something but the reality is that investment returns are always and everywhere a behavioral phenomenon. Read more »

note

Rusty lays out the perils of playing at diversification instead of actually doing it. Read more »

note

Many investors can – and if they are acting as fiduciaries probably ought to – take more risk. Read more »

note

Once again, baseball teaches us important life lessons. Or at least value investing lessons. Read more »

note

The endless tweaking, trading and rebalancing of our portfolios takes spot #4 on our list of Things that Don’t Matter. Read more »

quant

It appears that the appetite for risky assets has returned after the minor sell-off in April. Read more »

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