All Epsilon Theory Content
Everything we have published at Epsilon Theory since 2013, an archive of more than 1,000 evergreen notes.
A stalking horse is a familiar shape that a hunter hides behind in order to get close to his prey. Once you start looking for them in markets, you will see them EVERYWHERE.
Using facts in your analysis doesn’t make your analysis a fact. Punchy language that leans on these ‘facts’ doesn’t often stand up to scrutiny.
Sometimes the absence of a clear central Narrative can tell us something about a stock, too.
I can’t advise you on the Answers. I won’t advise you on the Answers. But I will advise you on the Process. Because that’s what we do for our fellow pack members.
The paradox of the Widening Gyre is that even when you’re right, you may be wrong.
“Just when I thought I was out, they pull me back in!”
Vito got out. Michael never did.
Allocators and investors can learn a lot from professional baseball about how to structure incentives and compensation for portfolio managers. And how NOT to do it.
Enmity and competitive games can be beaten. Sometimes doing so requires someone willing to be booed by his home crowd.
The Fed, China and Italy are the Three Horsemen of the Investment Semi-Apocalypse. They’re major market risks, but you’ll survive.
There’s a Fourth Horseman. And it will change EVERYTHING about investing.
In Part 4 of the Three-Body Alpha series, we explore how narrative may shape the tendencies of certain trend-following strategies – and how investors should respond. We also talk Tesla, if you’re into that sort of thing.
When reading news, especially financial news, be vigilant for strings of causality. Most financial events are extremely overdetermined.
We have built industry standards around minimizing the appearance of risk. As a result, we now have an epidemic of ability-signaling, when what we really need is humility.
Shifting Common Knowledge on Saudi Arabia has infected the narrative around SoftBank’s Vision Fund, which in turn places unicorn valuations at risk.
The mechanics of effective storytelling and the tells of Fiat News are very similar. Add knowledge of them to your news-reading arsenal.
Take it from a list of terrible pop songs (and one OK, if overrated song from the Doors): lessons that provide an answer instead of a process are usually lessons badly taught and badly learned.
Nobody likes to admit it, but the investment industry hires and invests with the smartest-seeming people that seem sufficiently likable. And it doesn’t work.
“Order should not have priority over freedom. But the affirmation of freedom should be elevated from a mood to a strategy.” Yes, please.
An historic night it was.A pleasure to have a private dinner with the Crown Prince of Saudi Arabia, Mohammed bin Salman, his royal family and…
There is a huge gap in the narrative and language used to describe private equity and hedge funds. Even when it is correct, it calls for caution in our discussions and decision-making.
The Ben Sasse Cartoon does not match the Ben Sasse life, and that’s a politically existential problem here in the widening gyre.