Saved by Matthew Giampetroni
Who Is On the Other Side?
Investors generate excess returns when they buy the shares of companies prior to a revision in expectationsabout future cash flows. A key determinant of cash flows is a company’s ability to allocate capital toinvestments that create value. The current principles of accounting do a poor job of separating investmentsand expenses, creating a veil that... See more
Morgan Stanley • Market-Expected Return on Investment Bridging Accounting and Valuation
Many finance and investment decisions are rooted in watching what other people do and either copying them or betting against them. But when you don’t know why someone behaves like they do you won’t know how long they’ll continue acting that way, what will make them change their mind, or whether they’ll ever learn their lesson.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
But not everybody is playing the same game. People have different incentives, and they may be following their incentives rationally, but it nevertheless creates profitable opportunities for DFT, which just wants to make money. Maybe conscientious contrarianism
Nate Silver • On the Edge: The Art of Risking Everything
In a prediction market, it is relatively more difficult: maybe you are trading with someone who has natural exposure to a Russian invasion and is just looking for a hedge, but more likely your counterparty is, like, a guy who speaks Russian and is in dozens of Telegram groups waiting for just the right moment to trade against your resting order.