“Predicting the future is harder than misremembering the past.” – Cliff Asness
I have been pretty quiet this summer, since I have no special insights into what the future holds. There are things that I think are likely to happen. Or should happen, but probably won’t. But the error bars seem pretty wide at this point.
I keep coming back to the fact that there have been massive flows driving asset prices over the last few years. And that seems to still be the case. The Fed is on track to ramp up their balance sheet reduction in September and that will most certainly be interesting to watch unfold.
Here are my most influential reads for the month – in no particular order:
- Drinking Too Much Is an American Problem – “The social context of drinking turns out to matter quite a lot to how alcohol affects us psychologically.”
- The Bid/Ask Spread in Venture Capital – “When the bid/ask spread exceeds 5 or 10%, the market seizes up, like a combustion engine without oil. No one trades. Investors pack their vests into a rolly-suitcase and head to the beach.”
- Trout savant in a big black cape – “Even with that cape, Sheridan Anderson was always a stealth man.” SMS: Mrs. SFTE is attempting to turn me into a fisherman.
- June CPI report: bad, bad, bad, bad, bad – ” As I have been saying for 9 months, house prices (black) lead OER by 12-18 months, meaning we were likely to see the highest YoY% increases in OER ever. “
- Summary of My Post-CPI Tweets (June 2022) – ” And the Median CPI y/y chart is unambiguous at this point: still accelerating.”
- Tech and War – “If a country, corporation, or individual assumes that the tech platforms of another country are acting in concert with their enemy, they are highly motivated to pursue alternatives to those tech platforms even if those platforms work better, are more popular, are cheaper, etc.”
- JPMorgan’s Aronov Ignores the ‘Cash Is Trash’ Chorus – “But the reality is that if you have been in cash for the last five years, you’ve essentially outperformed the Bloomberg Aggregate index year-to-date, over one year, three years, and, depending on the day, yes, even five years. “
- 3.5% ASAP – “Be patient. 12 month Treasuries at 2.7% are better than your money market fund and almost all other alternatives.” SMS: The spread between MM funds and Tbills seems nonsensical to me.
- Brain Food: Good Advice – “You have to learn to quit being right all the time, and quit being smart all the time, and quit thinking this is a contest about how smart you are and how right you are, and realize that you are here to make a positive difference in the world.”
- Elon’s Out – “Musk seems to get a lot of joy out of using Twitter, and pretending to buy Twitter is a good way to create drama on Twitter.”
Note: This is based on when I read the article, not necessarily when it was first published. Unfortunately, my backlog of things I would like to read always seems to dwarf the amount of time I can devote to reading.
Top clicks across the site last month:
- Financial Model vs. Operating Model
- Solamere Trail Loop
- EBITDA Is Not A Good Proxy For Cash Flow
- Excel Tips: Football Field Chart