Monthly Archives: August 2017

Psychology, Real life, Social development, Something completely different, Truth

Regarding the virtue of “hard work”

In the Western world, the idea of “working hard” is usually treated as a virtue in its own right. Any time I thought to question this “virtue” I’d invariably find myself on the defensive, as though my questioning of hard work was an affirmation of its opposite, laziness.

Whatever worthy objectives you want to achieve in life, the chances are, you have to work hard to attain them. Many objectives justify such hard work, like wanting to set the world record in some athletic discipline or to become a virtuoso musician or dancer. The same could be said about wanting to write a book, circumnavigate the globe, or any number of such feats. But people inclined to such endeavors do not need to be taught the value of hard work, so its cultural affirmation as a virtue would be superfluous and silly. Continue reading →

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History, Politics, Truth

Russian intervention in U.S. Civil War (1861-1865)

U.S. Civil War has become a popular topic of late, but as it turns out, what nearly everyone thinks they know about that event is wrong. My high school and university history classes left me with the impression that the war was fought over the issue of slavery: the “North” (good guys) was against slavery and wanted it abolished; the “South” (bad guys) wanted to keep the slaves, so they all went to war. Good guys won, bad guys lost, slaves got their freedom, and the world was made a better place. That, in a nutshell, is what I thought I knew about the Civil War. I’m not sure why I had that idea so, to make sure I wasn’t mistaken I conducted an informal survey among my American friends and acquaintances, all university educated people, some of them with advanced degrees. I asked about a dozen of them what they thought U.S. Civil War was about. To a person, all of them unhesitatingly answered that it was about the abolition of slavery. Furthermore, none of them were aware that Russia played any role at all in the Civil War. It struck me that maybe my friends and I all had the same basic idea about that event because we were meant to have that idea, which is now pretty much part of the popular culture. However, the popular interpretation omits some critical aspects of history.

Continue reading →
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Asset management, Behavioral finance, Commodity price, Commodity risk, Market psychology, Market trends, Psychology, Risk management, Trading, Trend following

Lessons in asset valuation: the great warrants bubble of China

Investors exert a great deal of intellectual effort to determine the correct valuation of securities. Economic value is central to our decision making and it plays a major role in our intuitive psyche. In daily life, when we buy a loaf of bread or a tank of gasoline, we tend to have a good idea about what we think is cheap and what’s expensive. We like bargains, don’t enjoy being ripped off, and in the same way we’re inclined to shop for value as consumers, we find value investing intuitively appealing. But here’s the critical difference between buying goods and investing: shopping for investments is speculative while buying stuff isn’t, and speculation activates the part of our mental circuitry that can heat up to a boiling point and overwhelm any rational consideration of value. Continue reading →

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Asset management, Behavioral finance, Bitcoin, Commodity price, Market psychology, Market trends, Psychology, Risk management, Trading, Trend following

Of Bitcoins and bubbles

In my book, “Mastering Uncertainty in Commodities Trading” I argued that security prices “are driven by human psychology and its self-stoking collective action that can sustain major trends spanning many years.” That’s because in speculative decision making, our views about the actions of others can entirely override our rational appraisal of the underlying asset value.

The most recent example of this is the price of Bitcoin that has surged from below $400 in January last year to $4,300 this week. When we set up the Altana Digital Currency Fund several years ago, many people thought that digital currencies were just a strange fad and investors continued to show little interest in them – until very recently. Continue reading →

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Real life

Eyes of beauty

My mother is a remarkably wise woman, but she’s a trained engineer, pragmatic and not indulgent of new-age spiritual musings. So I was surprised when one day, she told me that Maya had such beautiful eyes, that she could see the same something in them as in her mother’s eyes. Many years later Ethan, the other beautiful soul in my life – he’s only 7 years old – told me that one day he was looking into Maya’s eyes and found them so beautiful that it made him cry.

Maya

So long sweet friend. I’ll miss you forever.

They say that eyes are the window to the soul… But Maya just passed away and I am not in a mood to philosophize. Instead, I’m thinking that her body is at the vet’s office now… and perhaps I should go there and sit in front to be closer. Perhaps I’m beling silly but I’m pretty sure that whenI finish work I’ll spend some time sitting in front of the vet’s office.

That gleam in Maya’s eyes, that was something. Something beautiful and pure. Now I feel like I’ll miss her forever.

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