Friday, November 22, 2013

Best of Stableboy Recently

  • I met Boaz Weinstein AND Magnus Carlsen today. One thing is true of chess and markets: if you’re not doing something innovative you will lose to someone who is.
  • Chinese real estate boondoggles: "Who’s going to pay the rent to pay off the debt load that was used to finance these enormous projects? No one. Which means the loans are bad, which means the banks are probably insolvent, which means the banks need to be bailed out, which means the yuan is overvalued."
  • Timeless investing advice: "For no fee at all I am prepared to offer to any wealthy person an investment program which will last a lifetime and will not only preserve the estate but greatly increase it. Like other great ideas, this one is simple: When there is a stock-market boom, and everyone is scrambling for common stocks, take all your common stocks and sell them. Take the proceeds and buy conservative bonds. No doubt that the stocks you sold will go higher. Pay no attention to this – just wait for the depression, which will come sooner or later. When the depression – or panic – becomes a national catastrophe, sell out the bonds (perhaps at a loss) and buy back the stocks. No doubt the stocks will go still lower. Again pay no attention. Wait for the next boom. Continue to repeat this process as long as you live, and you have the pleasure of dying rich."
  • Concentration: "Be intellectually honest about your stock picking ability. Do you know what you’re doing? If not, don’t concentrate. But if 8 out of 10 of your ideas have worked—in down, flat or up markets—you should be taking 30% plus positions."

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