Wednesday , June 19 2019
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The Zeitgeist – 5.22.2019

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. May 22, 2019 Narrative Map – US Equities Source: Quid, Epsilon Theory We think core menus should be wide, not deep—that is, menus should offer exposure to a wider array of investments but not multiple options for the same asset class (with the potential exception of an active and passive option). The idea is to offer a range of investments that will better help

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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.


May 22, 2019 Narrative Map – US Equities

The Zeitgeist – 5.22.2019
Source: Quid, Epsilon Theory

We think core menus should be wide, not deep—that is, menus should offer exposure to a wider array of investments but not multiple options for the same asset class (with the potential exception of an active and passive option). The idea is to offer a range of investments that will better help participants achieve their retirement goals. We think it’s important to give participants access to funds with unique risk characteristics so they can supplement allocations in their other accounts (such as an IRA) as well as give a financial advisor (who is not associated with the plan) the ability to design a portfolio inside the plan. These funds can also be used by in-plan advice providers, such as managed accounts, to build better portfolios.

Retirement plan menus are ground zero for what is delightfully referred to as “choice architecture” … steering and nudging you into making the “right” choice.

The Zeitgeist – 5.22.2019
If you don’t like what’s being said, change the conversation.
― Don Draper

Ad men understand “choice architecture”. It’s not called the Wheel. It’s called the Carousel.

The Zeitgeist – 5.22.2019
I’ll make him an offer he can’t refuse.
― Vito Corleone

Mob bosses understand “choice architecture”. An offer you can’t refuse is what game theorists call a Hobson’s Choice, part of a more general class of games that includes ultimatums and dilemmas.

Like all ad men and mob bosses, Morningstar is in the choice architecture business.

And yes, there’s an Epsilon Theory note for that:


As the industry wrestles with the problem of making money on its own, the stage is set for podcasts and novella-length thematic analyses.

Yes, please.

“Luring cash” … FFS, people.


The Zeitgeist – 5.22.2019

I went back down through the line and took a closer look at the corn stover quality in the back row that had not sold yet. One load in particular caught my eye. After confirming there was no mustiness, mold, or mildew on the crinkled corn husks, I asked Eric Motter of Myerstown to share how he produced his 7,500-pound load of 3×3 bales weighing a little over 500 pounds each.

He planted the third week of May and the Roundup Ready hybrid only received manure. I could clearly see the corn held its color until harvest and it yielded well. No foliar fungicide was applied.

I have no idea why an article from Hay and Storage was linked so centrally to financial media, but I am so happy that it is!

Of course, I actually DO have an idea why farm esoterica is a central narrative in financial media today, as farmers are the casualties of this trade war.

It’s not just the corn crop that has only received manure this season.


The Zeitgeist – 5.22.2019

Saved you a click.


US, European, and Asian stocks rose on Tuesday after Trump tempered his Huawei ban.

The Chinese telecoms giant can buy US products to maintain its networks and release software updates, but it can’t buy American components for new devices.

“This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are,” said Jasper Lawler, head of research at London Capital Group.

The Zeitgeist – 5.22.2019

This was the actual graphic associated with this Business Insider “article”. It’s a stock photo from Getty, and I suppose it’s what you get when you search for “Yay, Huawei!”.

And then there’s the obligatory anti-Trump commentary from some London dude, criticizing the “haphazardness” of US policy. As always, there’s no parody like self-parody.


About Ben Hunt
Ben Hunt
He is the chief investment strategist at Salient, a $14 billion asset manager based in Houston and San Francisco, and the author of Epsilon Theory, a newsletter and website that examines markets through the lenses of game theory and history. Over 100,000 professional investors and allocators read Epsilon Theory for its fresh perspective into market dynamics.

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