The Achilles Heel of Capitalism

Taleb makes the point that the achilles heel of capitalism is that if you make corporations compete, it is sometimes the one that is most exposed to the negative Black Swan that will appear to be the most fit for survival.

I have made a similar point previously. Basically, those companies that appear to be "best in breed" are oftentimes those that are the rottenest, ie. they are cooking the books (eg. AIG).

Another Good Point - Seize the Opportunity

Seize any opportunity, or anything that looks like opportunity.

They are rare, much rarer than you think. Remember that positive Black Swans have a necessary first step: you need to be exposed to them.

Good Point from The Black Swan

Do not try to predict precise Black Swans - it tends to make you more vulnerable to the ones you did not predict.

Rather...

Invest in preparedness, not in prediction.

Hold Fast...Then Fade The Fading Seasonals

I am inclined to hold through to some ambiguous point in the first or second quarter 2013. I think the momentum and the seasonals are going to work in that favor. But I suspect resolution to the Fiscal Cliff and a burst of levity due to new year optimism will be worth fading.

It seems to me that the accumulation of obliviousness (classic market action - climbing the wall of worry) will peak and give way at some point to the weight of cumulative fears.

2012 has been a good year for the market. I don't think 2013 will be as good.

A Prayer of St Francis of Assisi

Lord, make me an instrument of your peace. Where there is hatred, let me sow love; where there is injury, pardon; where there is doubt, faith; where there is despair, hope; where there is sadness, joy; where there is darkness, light.

O Divine Master, grant that I may not so much seek to be consoled, as to console; not so much to be understood, as to understand; not so much to be loved, as to love. For it is in giving that we receive, it is in pardoning that we are pardoned, it is in dying that we are born again to eternal life.

Patience - One Of The Greatest Investment Skills

There are many skills an investor must have in order to be(come) a great investor. One of the greatest, and perhaps least appreciated, is the skill of patience. The ability to wait.

The structure of the markets and the nature of the investment management industry, in conjunction with our human essence, are predisposed against it.

The less I see of it in my own investment persona and its effects, the more I appreciate the value of patience.

I think the key with patience (and where its value lies) is that it allows you to pick your spot(s). To operate on your terms, when the conditions are most advantageous to you.

The Crux of the Matter

“If you can look into the seeds of time,
And say which grain will grow and which will not,
Speak then to me.”
– Macbeth, Act 1, Scene 3


Stole this quote from Crossing Wall Street this morning, but it reminded me of what I had been reading in Taleb's Black Swan.

Don't Forget Those Brief Episodes of Insanity

In the same way that we get brief glimpses of heaven, we sometimes get brief episodes of insanity. Don't forget them. And don't forget the slough of despond.

Read Job today (5/2/15). Here are some quotes that had real meaning for me:

The Lord gave and the Lord has taken away.

Shall we accept good from God, and no trouble?

Why is life given to those who are bitter to their soul?

What I feared has come upon me; what I dreaded has happened to me. I have no peace, no quietness; I have no rest, but only turmoil. [this has been my life for the last three years...it is too hard to describe...for those who have never experienced such depth of despair, they have no ability to identify]

Resentment kills a fool, and envy slays the simple. I myself have a seen a fool take root.

Man is born to trouble as surely as sparks fly upward.

I would appeal to God [and I have]. I would lay my cause before him [and I have]. - but have not heard from him. He [may] perform wonders that cannot be fathomed, miracles that cannot be counted. [but I have not seen them]

Blessed is the man whom God corrects; so do not despise the discipline of the Almighty. [this is about the only thing I can hang my hope on]

If only my anguish could be weighed and all my misery be placed on the scales! [my misery and anguish have been a lot]

The arrows of the Almighty are in me, my spirit drinks in their poison. [this is how I feel]

Oh, that I might have my request, that God would grant what I hope for, that God would be willing to crush me, to let loose his hand and cut me off! [I have felt this way]

My joy is unrelenting pain [although I have just had unrelenting pain...no joy]

What strength do I have, that I should still hope? What prospects, that I should be patient? [none...I am despairing]

I have been allotted months of futility, and nights of misery have been assigned to me. When I lied down I think, "How long before I get up?" The nights drags on, and I toss till dawn. {this describes my life over the past three years to a T}

I will not keep silent; I will speak out in the anguish of my spirit. I will complain to the bitterness of my soul. [and I have]

Why do you not pardon my offenses and forgive my sins? [I have asked God this over and over...how much more do I have to endure]

When he passes me, I cannot see him; when he goes by, I cannot perceive him. [this is how I feel about God and how he has treated me]

I despise my own life.

My days are swifter than a runner; they fly away without a glimpse of joy. They skim past like boats of papyrus, like eagles swooping down on their prey. [that is what the last 3 years have felt like...when O Lord will I find relief]

I loathe my very life; therefore I will give free rein to my complaint and speak out in the bitterness of my soul. [so true]

I am full of shame and drowned in my affliction.