This Week I Learned #43
Wealthy: "I am not discouraged, because every wrong attempt discarded is another step forward" - Thomas Edison
Wealthy: An interview with Patrick O'Shaughnessy and Michael Maubossin on the four sources of alpha. Four sources being: informational, analytical, behavioural and technical. The technical source was interesting as I learned how 1/3 of institutional alpha tends to result from flow. Flow of capital. They get an inflow of funds and that results in an increase in the share price of the stock since fund managers will buy more of what they like. This prompts more demand in the market. Same thing happens for redemptions as they have to sell what they own and this leads to further decreases without any underlying change happening to the business. An overall fun interview that shows a bit behind Oz's curtain to show how the markets are still inefficient. http://investorfieldguide.com/mmauboussin/
Wise: Learned that the gay dating app, Grindr, was 100% owned by a Chinese technology company called: Beijing Kunlun. A public company on the Shenzhen exchange. What prompted the learning was on how the company was being "forced" to sell the company because the Committee on Foreign Investments in the United States was banning them from going through with an IPO on the grounds of sensitive US data being owned by the Chinese. A reminder of major geo-political risks in global technology investments. Especially when it involves the super powers. https://www.reuters.com/article/us-grindr-m-a-exclusive/exclusive-us-pushes-chinese-owner-of-grindr-to-divest-the-dating-app-sources-idUSKCN1R809L
Wise: The three steps of truth per the German philosopher Arthur Schopenhauer: "First, it is ridiculed. Second, it is violently opposed. Finally, it is accepted as self-evident."
Wise: Iceland's Wow Airline collapsed. It just ceased all operations yesterday and felt customers stranded in 2 continents (North America and EU). In planning my own EU trips I constantly saw really cheap flights from Wow but it seems like the airline could not sustain its low prices. The business apparently collapsed after it could not secure a financing deal with no concrete plans to help out its stranded customers. This was a quick reminder of how my default assumption is that businesses that sell goods will survive and be responsible. Neither was the case for Wow Airline and the amount of shocked individuals talking about it while I was at the Newark Airport made it apparent that we all had similar assumptions of modern day companies. It's as if I forgot companies die too. Just like us. Yet again, I sometimes forget everyone I know will die. https://www.cnn.com/2019/03/28/business/wow-air-scli-intl/index.html
Wise: Learnings from Tim Ferriss interview w/ Neil Gaiman: 1) Neil and I both use Leuchtturm 1917 notebooks. A celebrity crush moment I guess. 2) Ian Fleming and Neil have similar rules for writing where they will put themselves into a place for work like a hotel that is not pleasant or city that is boring so that you have an incentive to get out. 3) Neil's other rule for writing and doing the work is that he only gives himself 2 option: either write or do nothing. https://www.youtube.com/watch?v=iHPKTby9z6o
Wise: Learned about Jeff Skilling's return. In case people forgot, this guy was the CEO of Enron. The massive fraud that fooled everyone for a while. He was put away in some sort of house arrest for 12 years. Brushing past the point how another rich white man escapes prison after costing people $billions, it seems like Skilling is about to make a return into the financial world. This time, it's in cryptocurrency and blockchain. https://www.wsj.com/articles/ex-enron-ceo-skilling-plots-second-act-11553282732
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