Thursday , May 23 2019
Home / Epsilon Theory / The Zeitgeist – 4.15.2019

The Zeitgeist – 4.15.2019

Summary:
Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it. But for whatever reason these are articles that are representative of some sort of chord that has been struck in Narrative-world. April 15, 2019 Narrative Map – US Equities Source: Quid, Epsilon Theory We rightfully emphasize the supreme importance of our asset allocation decisions. Yet as a group, we investors tend to apply an uncritical eye to asset classes, and accept them as they come to us. Questions we rarely ask in more than a perfunctory manner: Do they refer to any sensible organization

Topics:
Rusty Guinn considers the following as important:

This could be interesting, too:

Ben Hunt writes The Zeitgeist – 5.22.2019

Ben Hunt writes The Zeitgeist – 5.21.2019

Ben Hunt writes The Zeitgeist – 5.20.2019

Rusty Guinn writes The Weekend Zeitgeist – 5.18.2019

Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it.

But for whatever reason these are articles that are representative of some sort of chord that has been struck in Narrative-world.


April 15, 2019 Narrative Map – US Equities

The Zeitgeist – 4.15.2019
Source: Quid, Epsilon Theory

The Zeitgeist – 4.15.2019

We rightfully emphasize the supreme importance of our asset allocation decisions. Yet as a group, we investors tend to apply an uncritical eye to asset classes, and accept them as they come to us. Questions we rarely ask in more than a perfunctory manner: Do they refer to any sensible organization of securities with similar underlying traits? Are they subject to features at the arbitrary power of an organization deciding where they belong? Does Saudi being moved from one index to another matter (yes!). Should it (no!)?

We will be writing a lot more in the coming months about how we think untethering from index provider-based constructs for asset classes will be an increasingly important asset allocation tool in the emerging Zeitgeist.


The Zeitgeist – 4.15.2019

I’m on record saying that one of my bigger manager diligence whiffs was not investing with ValueAct for what seemed to me to be good reasons at the time (i.e. small cap specialist with mission creep into mid- and big-caps, a very right-sounding story). They have done very nice work for their investors.

But I will never not hear of a nomination of Jeff Ubben to a board without playing the game I call “Jeff Ubben or Aaron Eckhart from Thank You For Smoking?”


The Zeitgeist – 4.15.2019

Yes, this is all very stupid, but look, ensuring the stability and liquidity of the most critical bank in the most important European economy DOES fall pretty squarely within the mandate of the ECB. As ridiculous as this sounds on paper, it is frankly a lot less ridiculous than some other things being considered. Still, ‘can we immediately capitalize the fact that the market knows we’re going to piss away the ‘value’ of these assets over time into a gain to help our capital ratios’ is a pretty bold move, Cotton.


The Zeitgeist – 4.15.2019

I believe this is the first use of ‘[The Fed] is out of bullets’ in a major publication in 2019. It is truly a red-letter day. Those of you in God’s Country may discharge your firearms in the air in celebration. The rest of you may non-threateningly wave a knife or other sharp object of less than 5″ in total blade length.

The Zeitgeist – 4.15.2019
The Zeitgeist – 4.15.2019

The Zeitgeist – 4.15.2019

We have covered the ebullient narratives about private equity and venture capital at some length over the last few months, especially in comparison to those no-good scoundrels in hedge funds. The Billions-Silicon Valley Effect, if you will (sorry, but except for punching that guy who drove your kid drunk, you’ve done hedge funds no favors, Captain Winters). It is easy to look at a story like this and conclude that it’s a secondary effect of too much capital chasing too few remaining opportunities. Everyone wants to get their big unicorn pop before it’s too late to make a career off of it.

And yet I will tell you this: If you want a dependable canary in the coal mine for what other big state, municipal and government pensions will do, you can do far worse than to watch what OMERS does. There is about a trillion of US pension money that relies on the freedom granted by OMERS’s management company structure (and that of a few similarly situated peers) to provide ‘legitimacy’ cover for things they want to do but can’t be the first.


The Zeitgeist – 4.15.2019

If this were a live feature, I would allow you to select from an economist joke, a Goldman joke, or a Trump joke in this place. Instead, in the spirit of greatest movie celebrating the very in-the-current-Zeitgeist game of golf, you’ll get nothing and like it.


The Zeitgeist – 4.15.2019

Appelbaum’s arguments in favor of destroying the last vestiges of privacy in America all boil down to the same very dumb argument: ‘But think of what we could do with all the data!’

It’s the same reason that free Facebook exists, and free Twitter, and every other service in which you, dear reader, ARE the product because of the value of your data. But instead of advertisers, the consumers of the Product of You in Appelbaum’s world are academia, special interest groups, pitchfork mobs, employers, neighbors with grudges, University admissions offices, lending institutions and journalists who have run out of Twitter posts from random accounts to build feature stories around. Think you get a lot of junk mail and robo-calls now? Think bigotry in lending, housing and admissions is a problem now? Think gerrymandering and selective doling out of local resources is a problem now? Think politically motivated use of the IRS and other government investigative agencies is a problem now? Think widespread depression and anxiety are problems now? Think political races go petty, personal and dirty now? Think the number of political and social ideas to engineer a society in one group’s image is dangerous now? Think the way in which missionaries work to divide us is perilous now?

If the hilariously predictable outcomes were not enough, the justification provided is even flimsier. “Income taxation is an act of government.” Please. If that were the nexus that justified public disclosure, then we ought to disclose the detailed records of every health service, diagnosis and prescription by individual affected by an ‘act of government’. Same for the transcripts and disciplinary records of every student at a public school or school receiving public funding. Hell, those would be GREAT datasets!

The fact that one is forced by threat of imprisonment into a transaction with the state doesn’t inherently warrant public disclosure. Nor does the usefulness of that data. Render your taxes unto Caesar – but keep the data about them to yourself.

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.

Leave a Reply

Your email address will not be published. Required fields are marked *