“strategy is about looking for turning points. Politics is too predictable. Look at Hillary. She is an empty carapace with ambition rattling inside. You can predict everything she does. Strategy is about being unpredictable.”
“But doesn’t that unpredictability become predictable?” I asked. “What happens when every army in the world abides by strategic logic?”
“But they never will,” said Luttwak, “because most people cannot master their emotions. Above all, strategy is about mastering your emotions.” And the emotions of others, he might have added.
@ReformedBroker piece entitled “Abundance” has really been resonating in my Twitter stream and for good reason. It’s an excellent piece but somehow oddly familiar to me. A little google search and I found it’s actually a theme written quite extensively by @todd_harrison from Minyanville.
His tag line is that we have deflation in things we DON’T NEED (TV’s, phones, NetFlix, Facebook) and inflation in things we NEED (education, healthcare, housing) He calls it “inflastagdeflation”.
Everyone, everywhere has no tolerance for draw down. More than rate of return, drawdown seems to be the ultimate optimization metric. “If I reduce the drawdown I can increase the leverage and viola!” This usually ends badly. I love this article because it shows that no matter who the manager is or what the strategy is, drawdowns are inevitable. Institutions manage money because they are supposed to be more sophisticated, only to do exactly what retail does (panic at the wrong time) and charge you a nice fee for it.
Here’s a summary from Karl Marx on failure of Capitalism:
1. Inevitability of monopolies, which eliminate competition and gouge consumers and works.
2. Lack of centralized planning, which results in overproduction of some good and underproduction of others, encouraging economic crises such as inflation, slumps, depressions.
3. Demands for labor-saving machinery, which force unemployment and a more hostile proletariat.
4. Employers will tend to maximize profits by reducing labor expenses, thus creating a situation where workers will not have enough income to buy the goods produced, creating the contradiction of causing profits to fall.
5. Control of the state by the wealthy, the effect of which is passage of laws favoring themselves.
Redistribution or war or Elysium. Welcome your thoughts!
I read a lot in 2015, but this one was an odd selection for me. The target audience is obviously women in small, city apartments . But my wife read it first and said it helped so I gave it a shot. Basic premise is the following:
Discard what you don’t LOVE.
Most importantly, have an EXACT location for everything you own.
Simple enough, until you go through your things and say “I might need this sometime in the future.” “I wore this in High School, I can’t get rid of it!” Sure enough the book goes through many of the inevitable (and surprisingly rigid) excuses you will come up with to keep things.
I think knowing EXACTLY where to put everything – like a pair of socks, instead of throwing them on the floor next to the bed or jamming a random t-shirt into any available drawer – had a big effect on me. Before, I liked things “put away” which means I’d gather everything on the ground and jam it behind the closet door or take everything off the desk and put it in any drawer. It would be out of sight but I would know, behind this door lies a huge mess! More importantly, after about a month, I am continuing with the process, putting everything away where it’s supposed to go. An effort I had failed in the past.
I found the process a bit difficult but extremely worthwhile task. I can’t explain EXACTLY what changed but something did, perhaps a greater sense of order and calm? Whatever it did, it worked on me and I consider myself a fairly pessimistic individual. Try it and see what happens!