Weekend Reading for 5/19/2017
Wall Street’s Greatest Magician
As a student at MIT, Henry Singleton was the recipient of the Putnam Prize in mathematics and went on to graduate with a doctorate in electrical engineering. In his early career, he made significant contributions to aircraft inertial guidance systems that are still being used today and invented a way for naval ships to reduce their natural magnetic fields, making them harder to detect by enemy submarines. Despite his brilliance, for years Wall Street was unconvinced by his methods. But then…
right under their noses…
Singleton pulled off the greatest magic trick of all time.
Chart of the Week
3 Good Reads
American Savings Making Wealth Managers Rich (Noah Smith)
“I suspect that these quasi-hidden fees are a huge reservoir of financial dark matter — a giant slush fund that feeds many of the excesses in other areas of finance. Fees paid to wealth managers get passed on to hedge funds, private-equity funds and high-expense mutual funds that the wealth managers invest in. From there, they go on to fuel the curiously high salaries of traders, portfolio managers, executives and even the secretaries working at financial companies.”
The All or Nothing Bias (Cullen Roche)
“The key to good portfolio construction is never about building the optimal portfolio.¹ The alpha chase has skewed people’s perceptions into this idea that portfolios must always be perfect or market beating. That’s nonsense. Your portfolio doesn’t have to be perfect all the time. It just has to be appropriate. Getting over the all or nothing bias is a big step towards building a portfolio that is sustainable and appropriate.“
American Gods (Josh Brown)
“Let the Old Gods bellow and rage in the distance. There are likes to like and pages to page-view. Swipes to swipe. Items to be ordered and thought-leaders to be thought-followed. We’ve got our own temples, up in The Cloud, to be decorated with selfies and festooned with a million paeans to ourselves, our personal brands and our experiences. Our chauffeured chariots to be summoned, literally, on-demand. The app as finger-snap. People are favoriting us as we sleep. At least, they’d better be. Google is doing the work that priests and rabbis used to do. It has answers. Curious children are learning to consult with Alexa and Siri in kindergarten.”
Enjoy your weekend!