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Rusty Guinn

Rusty Guinn

Executive Vice President of Asset Management, Salient. Rusty Guinn is the executive vice president of asset management at Salient. He oversees Salient’s retail and institutional asset management business, including investment teams, products, and strategy. Rusty shares his perspective and experience as an investor on the Epsilon Theory website.

Articles by Rusty Guinn

You’re Not Wrong, Walter

January 20, 2022

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An Inconvenient Truce

January 3, 2022

British and German soldiers hold a Christmas truce during the Great War, by Angus McBride (1969)

You already know this story.

On Christmas in 1914, English infantry entrenched on a field in Flanders witnessed the crowns of makeshift Christmas trees begin to peek above the earthworks across the no-man’s-land. Then, over the chilly air, they heard heard the Germans singing their most treasured contribution to the Christmas repertoire – Franz Gruber’s Stille Nacht.

The English, who remain to this day unnervingly and unswervingly committed to caroling culture, were not about to let the Germans win a caroling competition. And so it was that Silent Night rose up to meet Stille Nacht on Christmas Day some 107 years ago. This accidental antiphony led a small but growing

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The Medium is the Message

November 30, 2021

Source: AFP

As leaks of internal reports from Facebook and Instagram in recent months have made even more obvious, the processes whereby social media sites algorithmically determine the content in users’ feeds can have a tremendous impact on both the nature of content consumed and users’ experience with the site. In the same way that editorial decisions about what stories to publish and how to promote them allow traditional media outlets to influence the creation of narratives, newsfeed algorithms also play a powerful role in shaping the framing of major topics in the news. Newsfeed algorithms, or at the very least the humans who develop them, absolutely have the potential to influence what everybody knows everybody knows about our world.

Usually this influence is hidden,

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The NFL Has a Gambling Problem

November 15, 2021

Source: NFL, ESPN.

Baseball was my goal from a young age, but gambling had significantly fewer barriers to entry.James Holzhauer, gambler and 33-time Jeopardy winner


The NFL is the major US sports league whose game and season outcomes have the most potential to be influenced by individual officiating actions; The game actions which result in penalties in the NFL occur often enough that they could be called on nearly every play, creating significant room for ‘legitimate’ calls that would change betting outcomes;Media narratives for the NFL increasingly frame the sport as being about betting and gambling outcomes;As this has taken place, NFL media narratives are also increasingly framing outcomes as being about officiating actions; andWe think this shift in common

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When Narrative Takes Flight

October 14, 2021

We have been writing about the Widening Gyre for years more than five years now.

In 2016, we wrote about the transition we observed within our national politics from a coordination game to a competition game. In more familiar terms, we argued that our politics were rapidly careening toward the bad equilibrium of a Prisoners’ Dilemma, where everyone knows that everyone knows the only way to survive is to defect against the other participant(s). To rat them out, in the terms of the classic game theory problem.

In 2018, we argued that the increasingly bi-modal distribution of political preferences observed by many was a feature of this transition. Because defection was now the optimal strategy in every social or political conflict, we argued not only that political division

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Oh, a Rhinoceros

September 8, 2021

A video made the rounds on various social media platforms last night and this morning. By now you have probably seen it. A young man presents his case for a mask policy to the school board in Rutherford County, Tennessee. He recalls the death of his grandmother by COVID and begins to express fear that this could happen to other people he cares about.

And that’s where most cuts of the video end. You see, the young man’s speech was interrupted by the shouting and snickering of adults behind him. Adults holding ‘Let our kids smile’ signs.

Source: Rutherford County (TN) Board of EducationElsewhere on the internet, there is a very similar – and very different – trend emerging. It is a simple meme. You find someone who dies of COVID or asks for prayer or good thoughts after having

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Burying the Lede

August 26, 2021

For news junkies and the Very Online, one of the most well-traveled news stories over the past couple days has been the story of the “American students who are stranded in Afghanistan.”

The first version I read of the story came from this piece published by The Hill, although it borrows heavily from a piece published in the LA Times and San Diego Union-Tribune the same day.

The key excerpt if you don’t feel like clicking over is here:

Dozens of California students and parents are stranded in Afghanistan after taking a summer trip to the country.More than 20 students and 16 parents from the Cajon Valley Union School District in El Cajon, Calif., visited Afghanistan on summer vacation. Now they are among thousands of people who are waiting to leave the country amid the

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The Afghanistan Narratives

August 17, 2021

Source: US Air Force

We usually try to be cautious about drawing narrative conclusions in the middle of a news cycle. OK, maybe we aren’t that cautious about it, but we recognize that those narratives can change pretty quickly. Still, what is happening in Afghanistan is big enough and the attempts in media to frame what it means are significant enough that it warrants a quick look.

Let’s first take a look at the network graph of articles published by US-based outlets about Afghanistan between Friday, August 13 and today, August 17. As usual, each dot or node is a single news article, press release, transcript or blog. Colors reference clusters of highly linguistically similar articles. Connecting lines and proximity also reference linguistic similarity. Up, down, left and

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How a Narrative Goes Viral

August 10, 2021

Source: Adrees Latif/Reuters

For more than a year under pandemic conditions, it didn’t exist.

Today it is among the most widespread ways to frame the policy response to the Covid pandemic:

Illegal border crossings are a principal source of the spread of Covid in the US.

It is a specific and powerful narrative. For obvious reasons, it is also a seductive narrative. And unless you are hiding under a media rock (for which you could be immediately and thoroughly forgiven) you know that it is now everywhere you look. So how did we get from there to here? How did we go from nobody talking about an idea to hundreds of outlets writing about the role of illegal border crossings in the recent growth of the cases associated with the delta variant of Covid-19?

This is a story

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Enemies Real and Imagined

July 21, 2021

Today I want to share three things I think I know based on what Radiant, our platform for analyzing the prevalence of various narratives in markets, has been telling us. Then I want to share what I think I think about what that means.

First, what I think I know. And no, I don’t think any of this is particularly earth-shattering or controversial.

I think I know that the prevailing structure of central bank narratives is that the Fed can’t, shouldn’t and won’t move away from a dovish posture.

Within financial news coverage of central bank activities and interest rate markets, our models determined that, after a brief flurry of begging for Fed intervention in early 2020, the dominant archetypal language in central bank coverage for most of 2020 was speculative inflation

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Welcome to Metaworld

July 16, 2021

Source: Images from two dueling opinion articles on a rise in violent crime in the US – both from John Minchillo (AP)

Let’s start with an assignment.

Take a look at the graphic below. It is a network graph visualization built using the software from Quid, much like the network maps we publish all the time. A dot (or node) in this visualization is a single news article. Articles with the same colors have been arranged into a cluster by linguistic similarity. Connecting lines likewise indicate linguistic similarity, only between nodes in different clusters. Up, down, left and right don’t have any meaning, and the colors for clusters are arbitrarily chosen. Distance and connection are the only dimensions that matter.

Which cluster would you say is the most similar to

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Let Me Make the Songs

July 8, 2021

Epsilon Theory may have gotten its formal start in 2013, but the soft launch took place in 1991. That’s when my partner Ben finished his doctoral work at a school up in Cambridge. His work there (and his 1997 book, Getting to War) focused on how news could be used to predict the likelihood of war. It also analyzed how news was used by institutions and individuals to foment an appetite for and belief in the necessity of war, which is related to but not the same as the ability to use that news for predictions.

So yes, we were interested to read about Project Cassandra, a collaboration between German academics and military leaders to quantify the risk of conflicts using…literature. The Guardian covers it here in what I think is a very worthwhile read.

Jürgen Wertheimer, head

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Non-Verbal Narrative

June 24, 2021

We make it no secret that our research program here is all about using natural language processing to identify and measure narratives in the world. But is narrative truly only shaped by verbal and written communication? Do missionary statements have to be made with the mouth?

Of course not.

Here’s narrative missionary Max Scherzer, pitcher for the Washington Nationals, providing an exaggerated form of protest against the revised MLB enforcement policy regarding the use of foreign substances. The umps have generally been inspecting hats gloves and belts for these substances. Max decided to give them a little, shall we say, extra on the belt removal.

Here’s Oakland Athletics pitcher Sergio Romo, picking up every nuance of Scherzer’s crystal clear communication to the

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Headline Risk

June 22, 2021

The average American news consumer is exposed to far more headline text on news websites, social media apps and content aggregation sites than they are to the prose of the articles themselves. It should be no surprise, then, that more fiat news and missionary behavior exists in headlines than almost anywhere else. It typically gets a pass because, well, the whole job of a headline writer is to summarize what an article is about. But that’s precisely the task that lends itself so perfectly to telling us how we should think about the article. What’s important? What should our conclusions be? How should we feel about it?

I’ll give a free subscription to our free newsletter if you can find the fiat news language in this gem of a headline to a CNN news article.

Aside from the

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A Working Narrative

June 7, 2021

Source: Reddit, Work Chronicles

Since the early days of the COVID-19 pandemic, debates about the future of work have been a fixture of the zeitgeist. In the early days, we read and wrote about who would be working remotely. By mid-pandemic, we read and wrote about how remote work would…well…work. Today we are all reading and writing about the most important question of all:

How much of this is going to be permanent?

No, this question is not new. It has been a part of the background to the discussion of remote work since the beginning. What IS new is that starting in late March and reaching a fever pitch by early June, we have observed two changes in the narrative structure of how remote work will continue or end as the pandemic fades in the United States.

First, we

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Radiant: A Sneak Peek

June 1, 2021


This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the

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Manheim Steamroller

April 26, 2021

I’m fed up with all this reading! You’re a Wormwood, you start acting like one! Now sit up and look at the TV.Matilda (1996)

A couple weekends ago I visited a car dealership to buy a new car.

Like most people, I look forward to this as much as I look forward to, say, going to the dentist or watching the Oscars. And like most people, I suspect you look forward to hearing someone complain about a car dealership experience about as much as you look forward to reading a rant about a bad airline experience.

Don’t worry – this is not that kind of story. But it is an unusual story.

I went to buy a car for a very ordinary reason. My wife is 8 months pregnant with our third child. Since my pickup truck can’t really accommodate three car seats, it was the obvious

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What Do We Need To Be True?

April 6, 2021

Source:  Cnes2021, Distribution Airbus DS

There are these two young fish swimming along and they happen to meet an older fish swimming the other way, who nods at them and says “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes “What the hell is water?”David Foster Wallace, in 2005 Commencement Address to Kenyon College

There is a funny thing I’ve noticed about telling that David Foster Wallace story: I am convinced at this point that everyone who hears it imagines themselves as the older fish.

Especially investment professionals who hear the story.

Don’t get me wrong. If there is one thing more ironic than believing you are the older fish in the David Foster Wallace story,

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Hot and Cold

March 23, 2021

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We are in a cold war with China.

That is, as we say, not a prediction. It is an observation.

Feel free to disagree with it. But you also ought not to read anything too portentous into the term. Cold wars aren’t declared, after all. Observing their existence is the limit of what we can do.

In any case, what I mean by the term isn’t complicated. Two political belligerents are now engaged in a foreign policy whose objective is to thwart through all means short of firing weapons the expansion of influence, the establishment of additional international military infrastructure and the expression of

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A Freaky Circle

March 9, 2021

Source: Thor Ragnarok

A quick but important note: We don’t have a dog in this fight. But we are conflicted. We have subscribers at almost all of the firms being mentioned. Our principals have done business with many of them. We’ve been clients of some, too. We like most of them. On both sides. We also don’t really care what any of them think. Make of it what you will, but clear eyes, even with us.

THOR: How did you…KORG: Yeah, no. This whole thing is a circle. But not a real circle, more like a freaky circle.THOR: This doesn’t make any sense. KORG: No, nothing makes sense here. Thor: Ragnarok (2017)

The whole of Thor: Ragnarok is pretty outstanding, as far as action-comedy films go. But the prison scene is almost certainly my favorite.

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The Third Rail Switch

February 23, 2021

For most of the last 40 years – at least since Tip O’Neill or one of his aides coined the term – the third rail of US politics has been Social Security.

It is strange to think about. We are all MMTers now, after all, and what’re a few trillion dollars among friends? In 2021, entitlement reform is a third rail in the same way that a high-voltage power line is a third rail. Sure, it will electrocute you, but who is going to go through the trouble of getting to it? We didn’t stop talking about entitlement reform because people were too afraid of it. We stopped talking about entitlement reform because neither of the two parties has even the faintest interest in it.

Yet even during its heyday, I would argue that Social Security was never really America’s third rail.

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Hammers and Nails

February 8, 2021

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From the original video to 9 To 5 by Dolly Parton

By Rusty Guinn

We humans are not very good at thinking about non-linearity.

When a process interacts with another process – or itself – our usually deep capacity for pattern recognition and estimation goes out the window. I could be referring to viral spread, or why we have concerns about B.1.1.7 becoming dominant in the US. I could be referring to the effects of leverage, concentration and liquidity in investment portfolios.

But not today. Today, I am thinking about the effects of a vastly larger

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The Invulnerable Hero*

January 28, 2021

Siegfried bathes in dragon’s blood, from Fritz Lang’s Die Nibelungen (1924)

The Invulnerable Hero* is among our most treasured and recurring tropes.

It is the core feature of the great German epic, the Nibelungenlied. You probably know it better as the story of Siegfried from Wagner’s treatment of the story in his famed Ring Cycle. Siegfried slays a dragon and bathes in its blood, that is, everywhere except for the spot on his back covered by a drifting linden leaf. He thus becomes invulnerable to harm except in this very spot.

To those of you more familiar with the Greek epics, you will no doubt see the parallels with the story of Achilles. Thetis takes an infant Achilles to the River Styx and dips him into its waters. He thus becomes invulnerable at every spot

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A Different Game

January 21, 2021

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The Zeitgeist on the day after a presidential inauguration is unlikely to catch anyone by surprise. It was the only topic of any significance in political news. It was the only topic of any significance in market news. The language used to describe this inauguration was central to nearly every topic over the last three days. Even sports.

The quantity of that coverage which would fit squarely into what we call Fiat News – news which is designed not to inform but to instruct the reader how to think about an event or topic – would also be unsurprising, I

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Reap the Whirlwind

January 11, 2021

The dirty little secret of every riot and protest and looting that ever existed in the history of mankind … IT’S FUN.Lucifer’s Hammer on Epsilon Theory, August 31, 2020

During the summer of 2020, as widespread non-violent protests for racial justice gave way to steadily creeping violence and property destruction, we published our concerns on these pages that there was practically zero political will – and zero political incentive – by either party to do what was necessary to reduce that violence.

Republicans and Donald Trump believed that the violence at a number of BLM-related events would be framed alongside deeply unpopular “defund the police” narratives as long as they continued. They believed, I think, that this framing would be electorally helpful. However perverse,

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The ZIRP Paradox

December 14, 2020

Source: Tesla, SpaceX

It is the Christmas season, which means that it is time for your usual obligatory reminders and warnings about consumerism. It is also Christmas in a pandemic year, so those warnings will come with an additional “Hey, we know your kids are upset about 2020 but don’t make it worse by trying to make it better with a boatload of crap they don’t need” on the label. That, and “Hey, maybe a year in which a lot of people are hurting would be a good one to teach what generosity really looks like.” And they’re all good warnings. The problem, of course, is that consumption really does make us happier, at least for a while. Then, inevitably, we do what humans do best. We adapt. To trigger the same chemical and emotional response, our brain tells us we need new

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An Old Joke

December 9, 2020

So an agent for a new over-the-top variety act finally gets a meeting with the biggest producer in the world. I mean, maybe ‘the world’ is selling it short. Word on the street is this guy’s even got God’s ear, if you can believe it.

Anyway, agent’s a working class type, will do just about anything to get this act on a big stage. Third and current husband’s last name’s Rothschild, and she met him at some place called Bilderberg. Sorry, not important to the story. But they were introduced by a fellow name of Henry Kissinger, apparently spent most of his life working as a secretary or something, so you know we’re talking about salt of the earth here. And I don’t want to tell a sob story, because everybody’s got one. Still, you oughta know she lost a friend a little over a year

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Russian Nesting Deals

December 3, 2020

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It isn’t very often that coverage of something as niche as SPACs (special-purpose acquisition companies) would make our list of the most linguistically connected financial news. Then again, thanks to 2020, I suppose we can’t really call SPACs niche news any more. Even if they were still consigned to the “weird stuff that seems very obviously designed to disproportionately benefit sponsors and allow management to do stuff they wouldn’t be allowed to do in other ways” bin, articles about the deal that triggered the Zeitgeist today probably would have risen anyway. Use

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The Ghosts of Commentary Future

November 30, 2020

“Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”A Christmas Carol, by Charles Dickens (1843)

With Thanksgiving in the books, we are approaching a special time of year. No, not Christmas. Not Hanukkah. Not even the season when some dumpster fire of a team from the NFC East manages to limp into the playoffs with a 5-11 record.

It’s outlook season.

Now, we are critical of financial market commentary most of the time, for the rather uncontroversial reason that it is nearly always composed of an equal blend of five loathsome traits: backward-looking, narrative-conforming, book-talking, non-actionable and (most damning of all) boring. But in outlook season, financial news outlets, financial social media, and both buy-side and

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ET Live! – 11.17.2020

November 17, 2020


This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the

Read More »