Whitebox, Simons, and Fishing in Montana

I had dinner with the Whitebox folks last nite.  We’ve written about Whitebox a few times on the blog before, and Redleaf’s letters are some of the best.

One of the more interesting comments was regarding low beta/vol stocks.  Redleaf had a comment that a possible reason they outperform was do to them having a moat (something I had never thought of before). In any case, be prepared for a whole slew of low vol ETFs on the horizon from Russell and PowerShares.

From Redleaf’s book Panic: The Betrayal of Capitalism by Wall Street and Washington:

…Risk is not the source of wealth in securities markets or anywhere else.  The notion that risk equates with reward is worse than a myth – it is a mass delusion, a mass delusion that in our time has cost investors of trillions of dollars that we can measure…It has lulled an entire generation of financial advisors into complacency about the risks to which they expose their clients.

At every turn of economic life, the reduction of risk is the key to prosperity.  Except in financial markets?  Why should it be so?”

Redleaf (Whitebox) lecture here. (From AcademicEarth)


Samuleson the investor (Economicprincipals).


A new take on gym membherships – you pay more if you DON’T go.  (Boston Globe)

A related nudge from Thaler on health care.  (NYTimes) and why the Broncos should trade down (Nudge).


The Power of Dividends (Advisor Perspectives)


Jim Simon’s Interview at MIT World (HT Kedrosky)

“Be guided by beauty. Everything I’ve done has had an aesthetic component to me. Building a company trading bonds, what’s aesthetic? … If you’re the first one to do it right, it’s a terrific feeling and a beautiful thing to do something right, like solving a math problem.”


As I finish the monetary group of books (that surprisingly I’m finding hard to get through) When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany – Fergusson, A History of Money and Banking in the United States: The Colonial Era to World War II – Rothbard, Frozen Desire: Meaning of Money – Buchan, and yes even The Creature from Jekyll Island: A Second Look at the Federal Reserve – Griffin.

…I’ve placed an order for a few new reads now on the way:

Probable Outcomes – Ed Easterling

Conquering the Divide: How to Use Economic Indicators to Catch Stock Market Trend – Cornehlsen, Carr, & Golden

Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System – Eichengreen

New Ideas from Dead Economists: An Introduction to Modern Economic Thought – Buchholz

& high on my never done to-do list, fly-fishing in Montana, Great Fishing Lodges of North America: Fly Fishing’s Finest Destinations – Orvis