Wonderful piece. I find myself nodding with all of this. Reluctantly. It's hard to be timely without falling into the trap of sensationalism and chasing the same types of headlines that are easy to criticize. There is the battle between thorough nuance and brevity - fighting for the reader's attention, respecting their time, and preserving interest is quite a lot to balance. This likely steers those seeking 'new investment thought' into niches and what you often reference as esoteric. Those rabbit holes, by definition, promise a significantly smaller audience, but they also present an opportunity for discovery. I'm not sure if anything can truly be 'new', or if one can find "New Investment Thought" intentionally. I'd think it's more likely to be by accident and is something that feels repulsive at first - likely challenging previously held beliefs the discoverer isn't ready to let go of.
With all that said, I look forward to being in Omaha this coming May. I'll be there, surrounded by thousands of other 'free thinkers and contrarians', hanging on every word the Oracle and Charlie have to share. At least I'll have a nice steak or two while I'm there.
You know I'm a huge fan of the esoteric, but primarily in the service of shedding new light on the every day quandaries of capital allocation. What can 0DTE Australian Options tell us about Diluted EPS calculations in America, or the suppression of the VIX? Probably more than people expect, but also more than academics explore.
If you want to get the heart pumping, I recently read investment strategies based on trend following of intra-day 0DTE options with technical analysis... which is probably not something in the Buffett letter.
Optimizing Automated Trading Systems with Deep Reinforcement Learning
This does actually get to a potential root cause of the issue: Has the most important breakthrough on investment thought moved to areas focused on extremely limited opportunity sets or with very short time horizons? Essentially, the increase in computing power and its role in financial markets has pushed inefficiencies to more and more opaque and inaccessible areas of the market.
Yes, these are great, a lot of these ideas reminds me of Marty Whitman, especially the focus on looking at things from a security perspective.
"It is a first principle at Whitebox to be 'security agnostic': to penetrate the labels like 'bond' and 'stock' and 'hybrid' and assess the real status of a security by the risks and rewards that flow from the combination of economic circumstances and the details of capital structure."
Wonderful piece. I find myself nodding with all of this. Reluctantly. It's hard to be timely without falling into the trap of sensationalism and chasing the same types of headlines that are easy to criticize. There is the battle between thorough nuance and brevity - fighting for the reader's attention, respecting their time, and preserving interest is quite a lot to balance. This likely steers those seeking 'new investment thought' into niches and what you often reference as esoteric. Those rabbit holes, by definition, promise a significantly smaller audience, but they also present an opportunity for discovery. I'm not sure if anything can truly be 'new', or if one can find "New Investment Thought" intentionally. I'd think it's more likely to be by accident and is something that feels repulsive at first - likely challenging previously held beliefs the discoverer isn't ready to let go of.
With all that said, I look forward to being in Omaha this coming May. I'll be there, surrounded by thousands of other 'free thinkers and contrarians', hanging on every word the Oracle and Charlie have to share. At least I'll have a nice steak or two while I'm there.
You know I'm a huge fan of the esoteric, but primarily in the service of shedding new light on the every day quandaries of capital allocation. What can 0DTE Australian Options tell us about Diluted EPS calculations in America, or the suppression of the VIX? Probably more than people expect, but also more than academics explore.
I believe the geopolitical risk framework Nobel Prize winner Robert Engle to be relatively novel investment approach.
https://vlab.stern.nyu.edu/docs/covol
If you want to get the heart pumping, I recently read investment strategies based on trend following of intra-day 0DTE options with technical analysis... which is probably not something in the Buffett letter.
Optimizing Automated Trading Systems with Deep Reinforcement Learning
https://www.mdpi.com/1999-4893/16/1/23/pdf
The Early Bird Catches the Intraday Trend by J Gava · 2021
https://research-repository.griffith.edu.au/rest/bitstreams/478d3558-15b5-4296-9c6d-ebdfbf67c1eb/retrieve
This does actually get to a potential root cause of the issue: Has the most important breakthrough on investment thought moved to areas focused on extremely limited opportunity sets or with very short time horizons? Essentially, the increase in computing power and its role in financial markets has pushed inefficiencies to more and more opaque and inaccessible areas of the market.
Nuked my Twitter for a while, so can't comment over there. If you haven't read him, I find Andy Redleaf to be quite refreshing.
https://drive.google.com/file/d/1z_S5zWUnnla74li3rOh3j2_sOEFFwkFT/view?usp=sharing
https://thehedgefundjournal.com/multi-strategy-credit-in-an-adverse-environment/
Coleman
Yes, these are great, a lot of these ideas reminds me of Marty Whitman, especially the focus on looking at things from a security perspective.
"It is a first principle at Whitebox to be 'security agnostic': to penetrate the labels like 'bond' and 'stock' and 'hybrid' and assess the real status of a security by the risks and rewards that flow from the combination of economic circumstances and the details of capital structure."