• July 27, 2013

A Lost Generation

It is pretty well established that a tax increase, especially an income tax increase, will have an immediate negative effect on the economy, with a multiplier of between 1 and 3 depending upon whose research you accept. As far as I am aware, no peer-reviewed study exists that concludes there will be no negative effects. The US economy is soft; employment growth is weak – and yet we are about to see a significant middle-class tax increase, albeit a stealth one, passed by the current...

• July 21, 2013

Any Bonds Today?

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls . . . become...

• July 13, 2013

The Bang! Moment Shock

Future shock is the shattering stress and disorientation that we induce in individuals by subjecting them to too much change in too short a time.

– Alvin Toffler

What is it about humans that we fail to see a crisis in advance, yet when we look back, its likelihood or inevitability so often seems blindingly obvious? Rather than a flaw, our under-reliance on foresight as opposed to hindsight is perhaps a necessary evolutionary design feature that has allowed us to make rapid progress as a...

• July 5, 2013

A Venture Investor from Bell Labs Channels the Noise and the Knowledge

Investors seek that elusive substance called alpha. It is too often remains hidden from them, and instead they find some form of beta, or simply what the market gives everyone. Sometimes, in secular bull markets, that can be plenty and investors feel secure. But in the secular bear cycles investing is a difficult task and one that at the end of the day may find you distressingly close to where you started.

Beta, alternative beta (often trying to pass as alpha), and true alpha are the only...