There’s a unique property of finance and financial assets that many don’t understand. Finance is a zero-sum game. Someone has to lose in order for someone else to win. This is true for all asset types from a purely mathematical standpoint. Let me give an … Continue readingThe Zero-Sum Game
In this post, I explore financial value and valuation from a higher level of abstraction. The goal is not to turn you into a valuation expert for any specific good or service, but to challenge how you think about money and value more broadly. These … Continue readingMoney, Value and Valuation
It doesn’t matter what you paid for it or how much time and effort you put into it. All that matters is how much the market will pay for it today. The market is more rational than any individual. It prices in the things you … Continue readingA Market Primer
Elon Musk, at the peak of his wealth, was worth approximately $360 Billion ($360,000,000,000). Most people don’t really understand how much money that is. So to put it in perspective, let’s equate dollars to days. If $1 million ($1,000,000) equaled 1 day, $360 Billion ($360,000,000,000) … Continue readingCompounding Unequal Distribution
Point 1 – Markets are Complex and Therefore Unpredictable Markets are not complicated but instead extremely complex. This is an important distinction and one that should not to be taken lightly or skimmed over. The state of a complicated system is predictable far into the … Continue readingBroad Views on Markets
What is a Model? A good model is a simplified but accurate representation of reality that can help us to better understand reality and to develop effective ways (strategies) of interacting with reality in order to reach our goals. All people automatically build models of … Continue readingBuilding Models and Developing Strategies for Finance and for Life
“Rather than love, than money, than fame, give me truth.” – Henry David Thoreau Pursuing money for the sake of money is an empty pursuit and is guaranteed to leave you as full or empty, as successful or unsuccessful as you were prior to accomplishing … Continue readingSome Thoughts on Money
No one ever complains about having too much money. There is an asymmetry there. But why does that asymmetry exist? It is because money represents resources that one has extracted, and to extract anything requires energy. Energy is expensive from a metabolic standpoint. This is … Continue readingCapitalism and Cancer
Markets are made up of companies which are made up of individuals and their respective choices. For a market system to be truly free, individuals have to be truly free since individuals are the smallest functional units of markets. However, individuals cannot be truly free … Continue readingThe Myth Of Free Markets
“Do not buy the hype from Wall Street and the press that stocks always go up. There are long periods when stocks do nothing and other investments are better.” – Jim Rogers When most people think of investing, they think of stocks and the … Continue readingUnderstanding Stocks