Fred Wilson :
I wrote this to my partner the other day. I’m not going to provide the context. It doesn’t matter. It could have been about almost anything in the startup sector right now.
“the biggest thing that is wrong with the startup sector right now is entrepreneurs and their teams are too focused on valuation and not enough focused on business fundamentals”
Follow-up on some less successful investment strategies by hedge-funds, to say the least :
The back-tested results for the Spruce Alpha fund may not have taken into account how markets and investors would react given the kind of circumstances that took place in August. The hypothetical results could have underestimated the fact that some E.T.F.s are used as trading instruments that big money managers move quickly in and out of in times of extreme market volatility.
In a disclaimer to its marketing materials, Spruce Alpha also noted some of the unreliability of back-tested returns. The hypothetical results “do not represent the results of actual trading” and “were achieved by means of the retroactive application of a hypothetical model that was designed with the benefit of hindsight and could be adjusted at will until desired or better performance results were achieved,” the disclaimer reads.
On computer-driven, automatic trading strategies :
Cobras are revered in Indian culture, but the British Raj took a dimmer view of the poisonous snake. Officials promised a lucrative reward for every dead serpent — a scheme that, according to economic lore, backfired horribly.
Enterprising Indians began breeding cobras to collect the bounty, which forced the colonial government to abandon the plan. The frustrated breeders then released the worthless cobras, worsening the infestation. The story has never been fully confirmed by historians, but was seized on by German economist Horst Siebert, who in 2001 published The Cobra Effect on perverse incentives and unintended consequences. The book turned the anecdote into a potent example of how solutions to a problem can make it worse.
Mark Carney, the governor of the Bank of England, on a future Black Swan :
“We don’t need an army of actuaries to tell us that the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors — imposing a cost on future generations that the current generation has no direct incentive to fix,” he said. “In other words, once climate change becomes a defining issue for financial stability, it may already be too late.”
Following the previous post on the future of journalism, the big news in media today is the sale of Business Insider to Axel Springer.
If I have anything to say about BI is that I try to avoid it, especially because of their tabloid headlines that I find more on the line with adverts you can find on sensationalistic websites rather than relevant titles on trustworthy publications. Unfortunately this is a trend on the web to gain more traffic, even for the most trusted sources — I’m looking at you Bloomberg.
So maybe I unconsciously link BI’s headlines to adverts ?
There’s also the way they sometimes present the content, by “slicing” major news/reports into bullet points or stupid slideshows. I understand why they do so, but that’s not my kind of journalism. If I don’t want to take much time with news I open FastFT, NYT Now, The Economist Espresso or WSJ What’s News where articles, while short, are well written and contain much of what I need to know about the subjects.
If a long, investigative newspaper article meanders without purpose, Business Insider will mercilessly slice and dice the article and cut to what is most essential. If you don’t give your audience what they want, someone else will[.]
No, Business Insider isn’t my kind of town. If I’m looking for some male-alpha business writings I go straight to ZeroHedge.com.
For my part, I let the original title of the article, though I may shorten it. Where I differ from them — quiet a bit actually, as I’m not a reporter myself — is that I tend to avoid quoting the most sensationalist piece of an article. I prefer to convey a bit of mystery that may encourage you to read the whole article elsewhere.
Abnormal Capitalist 