We're Hiring!

Second Foundation Partners is looking to hire for three new positions!

Please check out Careers at Epsilon Theory for more details, and please distribute the link to anyone you think might be interested!

Epsilon Theory In Full

Epsilon Theory In Full

 

The soul of Epsilon Theory is our long-form content, a library of hundreds of pieces written by Ben, Rusty and others over the course of the last 5+ years. These are the print-and-take-home-for the weekend notes that made Epsilon Theory what it is today.

Guest Post: The Two Worlds of Data Infrastructure

By Ben Hunt | September 24, 2018 | 0 Comments
Big brother from 1984 looking down

There are two systems states use to control our data: The Black Mirror version in China, and the western system that is well on its way there. There is another way.

Mailbag: Mastering the Art of French Cooking

By Ben Hunt | September 23, 2018 | 0 Comments

In which a fellow Slummerville old-timer writes in with a Savenor’s update: A dream job has been posted, and is now available. But who can afford a dream anymore? Oh, also I got an email from my mom. Hi, mom!

It's a Floor Wax AND a Dessert Topping

By Ben Hunt | September 22, 2018 | 0 Comments
It's a floor wax AND a dessert topping!

Coinbase – do they run a prop desk or don’t they run a prop desk? My answer: it’s not a prop desk. No, what they are doing is worse and less fair to clients than a prop desk.

The Curse of Category

By Ben Hunt | September 21, 2018 | 0 Comments
A famous example of a Type 1 error

In investing and in life, we are always quick to judge the book by its cover. We’re quicker to judge a book by who wrote it. We’re quickest to judge a book by what shelf it’s on.

Mastering the Art of French Cooking

By Ben Hunt | September 19, 2018 | 0 Comments
Julia Child with a knife

In which I discuss that one time I followed Julia Child through a grocery store in the least creepy manner I could manage, and the most delicious white corn I’ve ever enjoyed.

But Our Interests Are Aligned!

By Ben Hunt | September 18, 2018 | 1 Comment
Professor Harold Hill (Harold Hill!)

The modern use of stock-based compensation is a confidence game, in the true sense of the word, that would be very familiar to the Music Man (but he doesn’t know the territory!).

Notes From the Road: Roadkill

By Rusty Guinn | September 17, 2018 | 0 Comments

Part 2 of the Notes from the Road series, about the value of and problems with adaptive frameworks. In this installment, an exploration of……roadkill, and what evolution can tell us about our adaptations.

You Provide the Pictures and I’ll Provide the War

By Ben Hunt | September 17, 2018 | 0 Comments
Rosebud.

Billionaires don’t buy media properties as vanity projects, because they care deeply about them as institutions, or for profit. They buy them because they understand the political and economic power of Fiat News.

True Freedoms / Hollow Freedoms

By Ben Hunt | September 16, 2018 | 0 Comments
Author of The Rights of Man, Thomas Paine

Our liberty is our birthright, not granted to us by the State or the Oligarchs. It is not theirs to give. It cannot be taken away. But we can give it away. Don’t.

Lehman and the Meta-Game of Trading

By Ben Hunt | September 15, 2018 | 0 Comments
Lehman Brothers sign being carried to auction.

Everyone has their Lehman war stories. Everyone at least in their 30s, anyway. Here’s one of mine that was particularly formative for Epsilon Theory and our stories about stories.

Hunt's Law: An Experiment

By Ben Hunt | September 14, 2018 | 0 Comments

Hunt’s Law – fake news drives real news out of circulation – is a perversion of Gresham’s Law about currency that applies everywhere today, even to Hunt. Especially when it comes to social media.

Hunt's Law

By Ben Hunt | September 13, 2018 | 0 Comments
Queen Elizabeth I

A refresher on the power of abstraction to devalue the real. Gresham’s Law: bad money drives good money out of circulation. Hunt’s Law: fake news drives real news out of circulation.

Repo 105

By Ben Hunt | September 12, 2018 | 0 Comments
Dick Fuld

Every time Dick Fuld’s publicists succeed in getting a “redemption story” published in the WSJ or NYT, I’m going to write an ET piece about Repo 105. Its consequences for investors haven’t gone away, and neither should we.

Controlling Your Cartoon: Nike and the Art of the Meme

By Ben Hunt | September 10, 2018 | 0 Comments
Colin Kaepernick

The key to political and commercial success in a Widening Gyre? Controlling your own cartoon. In other words: if you don’t tell your own story, someone else will.

Mailbag: Mind the Gap!

By Ben Hunt | September 9, 2018 | 0 Comments

How much richer are we than we “should” be in the Great Financial Asset Bubble? Not you, I mean, you’re just as rich as you should be, of course. I mean everyone else.

19th Century White Papers

By Ben Hunt | September 9, 2018 | 0 Comments
Glenmutchkin

Two short stories from the 19th century that teach us more about investing than any white paper. Although I suppose that isn’t saying much. What I’m saying is they’re good and you should read them. And this.

They Don’t Think It Be Like It Is, But It Do

By Rusty Guinn | September 7, 2018 | 1 Comment
Oscar Gamble

In baseball and in investing and in life, we often miss the obvious truths that are staring us in the face. Sometimes that delusion is willful and sometimes it is accidental.

Cartoons Against Humanity

By Ben Hunt | September 6, 2018 | 0 Comments
Bugs Bunny the Barber

Nowhere is the cartoonification of data more obvious than in the construction and publishing of labor reports, and nowhere is it more influential on markets and politics.

Things Fall Apart (Part 2)

By Ben Hunt | September 4, 2018 | 0 Comments

Part 2 of a three-part series on what it means to have a polarized electorate and a monolithic market. Today’s note: How do things fall apart in a monolithic market? Not with a bang but a whimper.

What Is Wrong With You?

By Ben Hunt | September 3, 2018 | 0 Comments

So many words and ideas are effectively unusable today, because it’s impossible to use them without triggering readers. It’s a whirlwind brief of centrifugal…I mean, centripetal force.