From this morning’s Noahpinion, guest-written by Benn Eifert (@bennpeifert)
The investing industry is ridden with bullshit. The most common and insidious form is over-optimism: offers of tantalizing risk/reward that defy any notion of reality, often based on misinformation or deception. Less common but even more dangerous are outright frauds.
The problem is inherent to the product. Most consumer goods – apples, hotel rooms, laptop computers – are tangible objects or services that you can see, taste, feel, or experience, so you can judge how much they are worth to you. Investments represent claims about some future probability distribution of monetary outcomes which are not literally verifiable. The best an investor can do is form a reasonable judgment about the uncertainty around those claims, based on historical evidence and details about the mechanics of how those claimed outcomes are generated.
Far from breaking news, but a timely and well-written reminder in this age of “we hope to give you access to your assets soon“.
*****
Unrelated, I get a great deal of joy from every issue of The Big Takeover. I love reading record reviews and every issue is packed full of bands I’ve never heard of, written about by people who care as much as I do.
I was extra excited to see the Wet Leg LP, the front-runner for my personal Record of the Year, in the 4-spot. Man, I hope they come nearby on their next US tour.