Happy Friday! The word of the day is Cakeism.
Can China stimulate while not adding leverage? (Link)
Primarily a word used in the UK, cakeism is the belief that it is possible to enjoy or take advantage of both of two desirable but mutually exclusive alternatives at once. China's version of "cakeism," centers around the leadership's conflicting commitments to de-risking the financial system on one hand and on the other, hitting elevated growth targets north of 6 per cent. You can't really have a determined effort to deleverage the economy and not expect it to have a material impact on economic growth.
Short money rules (Link)
- Above-average results requires not being afraid of looking wrong
- Most people are afraid of looking wrong
- Good investing is 50% psychology, 48% history, 2% finance
- Obvious risk: not having three months of emergency savings
- Underappreciated risk: having three months of emergency savings when the average duration of unemployment is six months
- People like weekends because it’s when they have the most control over their time; financial goals should keep this in mind
Who is on the other side? - by Michael Mauboussin (Link)
Perhaps the biggest source of market inefficiency remains the human being. As groups, we repeatedly veer to extremes in our optimism or pessimism, leaving mispriced securities in our wake.
It was a week of celebrations for EdgePointers
Joel's 50th, Teresa and Matilde's 9th anniversary, Nancy's 3rd anniversary, Kris's birthday and Alexandra's 6-month anniversary! Everyone brought delicious goodies and our waistlines are paying for it.