What caught my eye this week.
We all want to believe in magic. Rational citizens of the 21st Century we might be, but we still wish to tilt the universe just enough to catch a glimpse of the future, as it rounds the next bend of space-time.
What insight! Enabling us to dodge a bullet, or jump on the most lucrative gravy train about to depart the station. This is why the contemporary forecaster still has an allure that’s analogous to the ancient oracle offering a Greek king an edge over the fates.
Credibility back then rested upon delivering your prophecy in the form of a riddle from the gods, with a side of cowled performance theatre, cackling, and trance-induced seizure.
Nowadays we prefer our foretellings served as data-led projections, backed by a proprietary model rather than goat entrails, while a dispersion of outcomes substitutes for the riddles of antiquity.
Even a cynic like me can’t resist this stuff, so I always appreciate it when a voice of reason like Joachim Klement skewers the market-prediction trade with a quick fact-check.
In a short and pointed piece of debunkery [1], Klement shows how three major US equity forecast surveys are not only routinely wide of the mark, but are typically worse than a random guess and would likely have destroyed value (versus simply holding the market) if you’d acted upon their guidance.
To me, articles like this are a necessary inoculation against our very human desire to control our destiny, and the contemporary belief that if we wield the power to wreck a planet, and know the video-viewing habits of almost every person on Earth, then someone, somewhere, must know what the hell is going on.
Sadly they don’t. Not the Pentagon, not Google, not Renaissance Technologies, not OpenAI, not the Chinese.
Take a single decision that’s cascading change upon the world – say the invasion of Ukraine. It wasn’t inevitable. Yes, it was long a possibility but, right up until the eve of war, it could have gone either way.
As an active investor, you could have made an outsized bet on the outcome. Even then would you have bet on a short war or a quagmire?
Or, you could admit that the world is a chaotic system with fundamentally unpredictable outcomes – as chance collides with contingency and ricochets into randomness.
Which means the only sane response is to reject any notion that events are proceeding along a set path. And to hedge your bets so that something in your portfolio or, more broadly, your quiver of personal assets and capabilities, will enable you to ride-out any turbulence that comes your way.
Have a great weekend.
The Accumulator
PS – The Investor is off on a faintly-deserved holiday – living it up in a paradise retreat somewhere the cocktails never run dry. I’m just the temp, and normal service will be resumed next week.
From Monevator
Why commodities belong in your portfolio – Monevator [2]
The rise and fall of the gold standard – Monevator [3]
From the archive-ator: Don’t chase performance – Monevator [4]
News
Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.
What happens when firms pull the plug on remote working – Wall Street Journal [5]
Crypto clampdown – This Is Money [6]
Customers pulling money from Binance – Markets Insider [7]
[8]
Estate agents listing houses for more than they’re worth shocker! – This Is Money [9]
Products and services
Quick ways to boost interest on savings – This Is Money [10]
Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor [11]
First impressions of the Apple Vision Pro – Daring Fireball [12]
Open an account with low-cost platform InvestEngine via our link [13] and get £25 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine [13]
The news digested – awesome free email newsletter – The Knowledge [14]
Homes near festivals for sale, in pictures – Guardian [15]
Comment and opinion
The odds of a hard landing are increasing – Research Affiliates [16]
Is this a new bull market? – A Wealth of Common Sense [17]
How to negotiate with aging parents – KFF Health News [18] [h/t Abnormal Returns [19]]
When to retire [US but relevant] – Humble Dollar [20]
Tips on the art of listening – Clearer Thinking [21]
Why financial independence types should conduct a life review – Oblivious Investor [22]
Indeedably has done just that in this poignant reflection on the gap between dreams, plans, and reality – Indeedably [23]
Naughty corner The safe place: Anti-active antics
Why the rise of NVIDIA shows you can’t pick winners – A Wealth of Common Sense [24]
Fastest rising asset classes 2023 (how many did you predict?) – Visual Capitalist [25]
Rebalancing bonus latest – A Wealth of Common Sense [26]
Kindle book bargains
A Man for All Markets by Edward O. Thorp – £0.99 on Kindle [27]
The Tetris Effect: The Cold War Battle for the World’s Most Addictive Game by Dan Ackerman – £0.99 on Kindle [28]
Liar’s Poker by Michael Lewis – £0.99 on Kindle [29]
Love, Pain, and Money: The Making of a Billionaire by John Caudwell – £0.99 on Kindle [30]
Environmental factors
Divesting from Big Oil doesn’t work – The Free Press [31]
Too late now to save Arctic summer ice – Guardian [32]
The 20 most air-polluted cities on Earth – Visual Capitalist [33]
Robot overlord roundup
Why no one can control AI – The Free Press [34]
Why AI will save the world – Marc Andreessen [35] [h/t Abnormal Returns [19]]
Hearing out the AI doomers vs the doubters [Podcast] – 80,000 Hours [36]
Can the UK lead the way on AI regulation? – Brexit & Beyond [37]
UFO mini-special
US military has recovered alien spacecraft claims whistleblower – Guardian [38]
But he has no proof – Guardian [39]
“We’re not alone” interview with the whistleblower [Video] – NewsNation, via YouTube [40]
The UFO cover-up playbook – Atlantic [41]
Who is the whistleblower? – Sandboxx [42]
“I don’t want to believe” – why it’s all a media circus – Quillette [43]
And finally…
“You’re not meant to know about tax. It’s kept complex for a reason.”
– The Rebel Accountant, Taxtopia: The Injustices, Scams, and Secrets of the Tax Evasion Game [44]
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