Asset management, Behavioral finance, Commodity risk, Complexity, Hedging, Market psychology, Market research, Market trends, Psychology, Risk management, Something completely different, trading, trend following, Uncategorized

Speculation in the natural world

Nature has … some sort of arithmetical-geometrical coordinate system, because nature has all kinds of models. What we experience of nature is in models, and all of nature’s models are so beautiful. – R. Buckminster Fuller

Nature’s survival strategies that bear the most similarities to activities of market speculators are those of predators. To live, predators must hunt and this activity includes elements of speculation. Like trading, predation requires knowledge, skills, judgment and decision-making. It also entails risk and uncertainty. A predator can’t be sure where her next meal is coming from. Each hunt is an investment of resources; it involves the risk of injury and loss of energy expended in failed hunts, which tend to be more frequent than successful ones. To survive and procreate, predators must consistently generate a positive return on this investment. Too much of a losing streak could turn out to be fatal. In his book, “The Serengeti Lion: A Study of Predator-Prey Relations” George B. Schaller painstakingly documented the details of hundreds of hunts by large cats in the Serengeti National Park in Tanzania. We have all seen wildlife television programs showing lions and cheetahs hunting, but Schaller’s work offers a much richer account of the life of predatory cats including their hunting behavior.

The anatomy of a hunt Continue reading

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Central banking, Economics, Inflation, Monetary reform, Social development, Uncategorized

Inflation: lessons from the last empire’s collapse

So far, the dreams of 1,000-year empires and stable world domination have eluded the ruling elites throughout history and across the globe. Empires arise, sustain themselves for a century or two and then rapidly decay and collapse. The collapse may appear relatively fast and obvious in hindsight, but in reality it spans decades, may appear as a series of temporary crises and only become obvious very late into the slow-motion train wreck. Continue reading

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Central banking, Commodity price, Economics, Inflation, Policy, Uncategorized

Greenspan: Fed balance sheet is a tinderbox of explosive inflation looking for a spark!

In June 2011 Carmen Reinhart wrote a paper for the IMF titled “Financial Repression Redux.” She suggested that the current policy of financial repression could ultimately lead to high levels of inflation. Today, five years later it seems like she couldn’t have gotten it more wrong. In spite of the unprecedented monetary expansion, monetization of public debt and swelling central bank balance sheets, deflation seems entrenched. So why worry about inflation at all? In short, because deflation could actually give rise to inflation. Continue reading

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Asset management, Commodity price, Economics, Hedging, trend following, Uncategorized

“Mastering Uncertainty” receives its first review

I’ve recently published my book, “Mastering Uncertainty in Commodities Trading” which has now obtained its first reader review on Amazon, and it’s a five stars review! For a first-time author, this is Christmas! Heartfelt thanks to Roman for taking time to read the book, “get it,” and post this flattering review. I’m posting the full text, titled “Exceptionally well written book,” below: Continue reading

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Asset management, Central banking, Economics, Market research, Policy, Politics, Stock market, Uncategorized

Investing in the age of unprecedented monetary experiments

Since the 2008 financial crisis, world’s largest central banks have unleashed a program of monetary stimulus that dwarfs anything we’ve experienced in history. With no historical precedents, how should investors navigate the risks and events that will likely exert extreme stress upon political, economic and social fabric of nations across the world. Altana Wealth’s founder Lee Robinon offers some unorthodox insights in a 45 minute interview with Real Vision TV with Grant Williams. You may not hear similar thinking from academics or CNBC-vetted pundits. Lee has the remarkable capacity to keep a mind-bogglingly detailed mental map of what’s going on in the world of business, finance and politics within a clear historical perspective and isn’t shy about laying it out as he sees it. The video is below: Continue reading

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Central banking, Economics, Monetary reform, Policy, Social development, Uncategorized

Central banks – what are they good for?

In 1912, the United States had no central bank and no personal income tax. It nevertheless managed to generate a $3 million fiscal surplus. Today, after a century of Federal Reserve’s management of the nation’s currency, the country is mired in unpayable debts, unending overseas military adventures and massive fiscal (and trade) deficits. Here’s a comparison, courtesy of Jim Quinn (the Burning Platform blog): Continue reading

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Commodity price, Economics, Energy crisis, Hedging, Market psychology, Oil market, Uncategorized

4/5: Sources and quality of oil market information

This posting is part 4 in the 5-part series on the future energy crisis we are likely facing. Here are parts one, two, and three. My research to try and establish facts about oil supply and demand led to many dead-ends where you must take the information at face value and hope that it is true. For example, we’ve all heard (again) about tanker-fulls of unsold crude oil floating around the world. Ultimately, this information is based on hearsay. For example, Bloomberg reported how oil companies are seeking supertankers to store 20 million barrels of crude oil [i] (that sounds like a lot, but it represents only a few hours’ worth of global demand). Continue reading

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