Every summer, roughly two hundred thousand people around the world will take a six-hour multiple-choice and essay-question test organized by the CFA Institute. At a recommended 300 hours of study per test, we’re talking about roughly 60 million person-hours devoted to studying the ins and outs of discounted cash
“Factor-based investing” is a hot topic, but it’s a clunky misnomer. The dean of value investing, Benjamin Graham, says: An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. - Security Analysis, 1934 Factor-based investing sure isn’t that. It’s a
I recently had the pleasure of attending a Bloomberg Ideas panel discussion on the AI. Don’t miss a chance to visit Bloomberg HQ at least once. It’s a good way to understand Bloomberg, as a person and as a mayor. When you go to Bloomberg, you can’t
A fence? But why? A sensible theory about Blockbuster was that they made so much money on late fees that they eventually went broke. Everybody hated late fees, but Blockbuster kept charging them — at thousands of stores! Then at hundreds of stores! Then at dozens, then one, then none. It’
A few weeks ago, I spent a weekend at an obscure conference for a wildly ambitious, way out-there software project. Everyone was united by one weird belief (that the project could, against all odds, succeed). And what’s surprising is that they had a lot of other crazy beliefs, too
I like to write, and occasionally I idly consider the possibility that I should do it for a living. Then I remind myself: writing is a structurally terrible job. Whatever dreams you have of living off of big checks from Random House and Vanity Fair: crush them now. The economics
Financial engineering is a powerful tool. Here, we see it transform negative-sum risk into positive-sum fun. Nobody knows what advice is worth, which is why there are three different ways to charge for it, none of which really make sense. The cheapest tier of advice is the kind you get
While I was in the middle of writing about writing, I realized there was a book on my to-read list that addressed the same themes, but from opposite angle: not the writers getting stuck in a bad system, but the PR people and ad buyers who shape their terrible financial
My writing shtick is: 1. Find real-world situations that make more sense when you frame them in terms of financial and economic theory: Schelling Points, externalities, carry trades, optionality, the Capital Asset Pricing Model, etc. 2. Find examples of other people doing this, and point out that they’re wrong.
When I was younger, I was outraged by how popular athletes are. It made perfect sense to me that the world valued stuff I’m good at, like banging out five double-spaced pages on why literally any literary character is a Christlike figure, or getting a grade-inflation-adjusted Gentleman’s C
Subscribed is one of those books that you can dismiss as an extended press release. It’s a book arguing that every business should explore, or ideally switch to, a subscription billing model, and it’s written by the CEO of — a company that sells software to help companies manage
When I need to get a lot of work done, I go somewhere quiet, turn off alerts on my phone, close every program except Emacs and the terminal, and crank up the soundtrack to The Social Network. I know I’m not the only one — a lot of work gets