Links - 09/10/2022
“The unpredictability of behavior is a favorite topic of mine. Noted physicist Richard Feynman once said, ‘Imagine how much harder physics would be if electrons had feelings.’ The rules of physics are reliable precisely because electrons always do what they’re supposed to do. They never forget to perform. They never rebel. They never go on strike. They never innovate. They never behave in a contrary manner. But none of these things is true of the participants in an economy, and for that reason their behavior is unpredictable. And if the participants’ behavior is unpredictable, how can the workings of an economy be modeled? What we’re talking about here is the future, and there’s simply no way to deal with the future that doesn’t require the making of assumptions. Small errors in assumptions regarding the economic environment and small changes in participants’ behavior can make differences that are highly problematic…. Thus, for me, the bottom line is that the output from a model may point in the right direction much of the time, when the assumptions aren’t violated. But it can’t always be accurate, especially at critical moments such as inflection points . . . and that’s when accurate predictions would be most valuable.” —Howard Marks
Howard Marks: The Illusion of Knowledge (LINK) [Also available via podcast format.]
Howard Marks has long questioned the value of macro forecasts, but in his latest memo, he explains why creating profitable forecasts is so difficult. He discusses the incredible complexity involved in modeling an economy and makes it clear that forecasting mostly provides the illusion of knowledge. He argues that investors are better off accepting reality — that the macro future is largely unknowable — and focusing on what they can know.
The energy historian who says rapid decarbonization is a fantasy (LINK)
Vaclav Smil rarely agrees to interviews. Too many in the media have portrayed him as a tool of Big Oil, he says — because he insists on pointing out how deeply dependent humanity is on fossil fuels and how difficult it will be to give them up.
The economist and professor emeritus at Canada’s University of Manitoba heats his house with solar energy. He’s no global warming denier. He recognizes the need to move away from plastics, but asks readers to note how often they touch plastic every day and ask themselves how rapid they think the switch can be.
His mission: lay out facts. “I’m not an optimist or a pessimist,” he likes to say. “I’m a scientist.”
Municipal Bonds Suddenly Look Cheap. Some Are Tax Traps. - by Jason Zweig (LINK)
George Risk Industries (LINK)
Roblox is ready to grow up (LINK)
Dr. Amazon Will See You Now (LINK)
Treasury Spells Out How Firms Can Comply With Russian Oil-Price Cap (LINK)
The Weakness of Xi Jinping: How Hubris and Paranoia Threaten China’s Future [H/T @nfergus] (LINK)
It’s Supposed To Be Hard - by Morgan Housel (LINK)
Your Career Is Just One-Eighth of Your Life (LINK)
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Grant’s Current Yield Podcast The Right Information That Matters (LINK)
Rob Arnott on The Market Huddle Podcast (LINK)
Smarter Markets: Winter is Coming Episode 2 | Daniel Yergin, Vice Chairman, S&P Global (LINK)
“Securities” Podcast: The geopolitics and digital future of agricultural commodities (LINK)
The Rest Is History Podcast: Queen Elizabeth II (Part 1, Part 2)
What Makes Your Brain Different From a Neanderthal’s? - by Carl Zimmer (LINK)
Two super-Earths found around a tiny red dwarf star — with one in the habitable zone (LINK)
“The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.” —Daniel J. Boorstin