Wednesday, October 26, 2016

Is the Australia I once knew gone for good?


When I first started writing about the Australian property bubble in 2003 I knew it was big. But even I didn’t think it would reach its current absurd proportions. The bubble has now engulfed not just our economy but our politics, our media, our social structure and entire strategic outlook. Not one of these is defensible in terms of the national interest but together they converge on Australian disintegration:
  • The economy is now a hollowed out wasteland of finance, speculation and consumption. Other than dirt, we do nothing else.
  • Politics is now warped completely around the bubble with elections won and lost on house prices alone. Policy is forgotten.
  • The duopoly of Australian media is focused entirely on maximising for sale listings for Domain and It has become a bald-faced real estate propaganda machine.
  • Multi-culturalism is being increasingly strained as immigration is sustained at economically destructive levels purely to support house prices.
  • ANZUS is now fundamentally undermined by the “citizenship exports” sector that drives house prices and construction and brings with it a “hard-edged” Chinese soft power push.
The Australia that I grew up in was based upon the principle of the “fair go” balanced against a vibrant and mixed competitive market economy, of policy made in the national interest, of successful multi-culturalism within a liberal Anglosheric context, and of unshakable faith in the US as our strategic partner in the world.  Now, thanks to the bubble:
  • The “fair go” is dead.
  • The US alliance is dying.
  • Multi-culturalism is under assault.
  • Liberalism and the market economy have been subsumed by specufesting.

Tuesday, October 25, 2016

Regret Minimization Framework by Jeff Bezos


Here’s the story as told by Brian Christian and Tom Griffiths, in their excellent book, Algorithms to Live By: The Computer Science of Human Decisions:
Regret can also be highly motivating. Before he decided to start, Jeff Bezos had a secure and well-paid position at the investment company D. E. Shaw & Co. in New York. Starting an online bookstore in Seattle was going to be a big leap — something that his boss (that’s D. E. Shaw) advised him to think about carefully. Says Bezos:
“The framework I found, which made the decision incredibly easy, was what I called — which only a nerd would call — a “regret minimization framework.” So I wanted to project myself forward to age 80 and say, “Okay, now I’m looking back on my life. I want to have minimized the number of regrets I have.” I knew that when I was 80 I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the Internet that I thought was going to be a really big deal. I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day, and so, when I thought about it that way it was an incredibly easy decision.”

Sunday, October 2, 2016

Keep Calm and Carry on investing - Howard Marks

  • 90s were the best. and it doesn't get better. if it doesn't get better, then it gets worse.

Saturday, October 1, 2016

Today 5.5% yields are pretty good - Howard Marks

Not Bubble Prices now - Howard Marks

Good times or up cycle in the seventh inning, you could be in the eight or ninth but you don't know - Howard Marks

Today 5.5% yields are pretty good. - Howard Marks

Annualized gains of 5.5 percent “strikes me as the most reasonable expectation,” Marks said Wednesday at the Bloomberg Markets Most Influential Summit in New York. “It’s a big problem because most endowments need 8 percent, charities need 8 percent, and pension funds need about 7.5 percent.”
Marks said high-yield bonds are expected to return about 5.5 percent, stocks 5 percent to 6 percent, Treasuries 2 percent and high-grade corporate bonds 3 percent. Alternative assets such as private equity and real estate would yield higher profits, the billionaire investor said. In a balanced portfolio, that mix would work out to about 5.5 percent.