Patrick Carroll on constitutions, culture and liberty

The lesson we ought to take from this [vaccine passports in Canada] is that constitutions by themselves do not actually protect people’s rights.  They are just pieces of paper.  What really matters is the culture, and specifically, the degree to which people in society value liberty. 

Consider the fact that many totalitarian regimes also had constitutions and bills of rights (such as the Weimar Constitution in Nazi Germany).  These documents were undoubtedly held in high esteem, but they likewise proved to be powerless when the prevailing culture became tyrannical. 

So while some say that we can preserve liberty if we just get the right law, constitutional amendment, or supreme court ruling, this is a false hope. 

Liberty lives and dies by the culture.  If the culture hates liberty, no government edict can preserve it. 

Then again, if the culture loves liberty, no government edict can take it away.

~ Patrick Carroll, "Vaccine Passports Have Come to Canada. Don’t Expect the Canadian Constitution to Stop Them," FEE.org, August 30, 2021

Patrick Carroll on the gap between the vaccinated and unvaccinated in Canada

It’s hard to deny that Canada is well on its way to creating two classes of citizens, the vaccinated and the unvaccinated.  Activities that were once considered basic human rights, such as assembling in various social settings or boarding a flight, have now become “privileges” that are reserved for the vaccinated class alone. 

In many ways, these policies are eerily reminiscent of the laws that were used to target marginalized groups in the past such as women, blacks, and jews.  Of course, the oppression in those cases was often far more egregious.  But the moment we concede that some people should have more rights than others, we are operating within the same paradigm.  The differences between those historical injustices and the present-day treatment of the unvaccinated are merely differences of degree, not kind.

~ Patrick Carroll, "Vaccine Passports Have Come to Canada. Don’t Expect the Canadian Constitution to Stop Them," FEE.org, August 30, 2021

Premier François Legault announces vaccine mandate in Quebec

People who have made the effort to get their two doses must be able to live a somewhat normal life.  We will give certain privileges to those who have agreed to make the effort to get their two shots.  Some non-essential services will be available only to vaccinated people.

~ Quebec Premier François Legault, announcement on August 5, 2021

(As quoted by "Vaccine Passports Have Come to Canada. Don’t Expect the Canadian Constitution to Stop Them," FEE.org, August 30, 2021.)

Dan Gardner on binary thinking

Humans naturally think in binary terms.  "It will or it won't."  "It is or it isn't."  "Maybe" is as fine-grained as our analysis gets.

~ Dan Gardner, co-author of Superforecasting

Charlie Munger on investing and low time preference

It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.

~ Charlie Munger

Charlie Munger on the balance between competency and gumption

You have to strike the right balance between competency or knowledge on the one hand and gumption on the other. Too much competency and no gumption is no good.  And if you don't know your circle of competence, then too much gumption will get you killed.  But the more you know the limits to your knowledge, the more valuable gumption is.

~ Charlie Munger

(As quoted by Jason Zweig, "A Fireside Chat With Charlie Munger," The Wall Street Journal, September 12, 2014

George Bernard Shaw on arguing with jerks

Never wrestle with pigs.  You both get dirty and the pig likes it.

~ George Bernard Shaw

Eric Swergold on the war in Afghanistan

To the Editor: 

For investors, there is a simple way to think about the U.S. experience in Afghanistan.  Twenty years ago, you bought a stock for $100. The investment lost $4 dollars a year and is now worth $20.  You finally have had enough and give it to your trader to sell, and he butchers the sale and gets you out at $5. 

President George W. Bush is the analyst who got you in at $100, and President Joe Biden is the trader who got you out at $5. Now, set politics aside and remember the trillions of dollars we spent under both Republicans and Democrats and, in human terms, the U.S. soldiers who are dead or wounded.  The tragedy was the entire 20 years, not the last 20 days. 

~ Eric Swergold, Mill Valley, Calif., Barron's Mailbag, August 28, 2021

November 19, 2001

Philip Tetlock and Dan Gardner on forecasting

There is plenty of room to stake out reasonable positions between the debunkers and the defenders of experts and their forecasts.  On the one hand, the debunkers have a point.  There are shady peddlers of questionable insights in the forecasting marketplace.  There are also limits to foresight that may just not be surmountable.  Our desire to reach into the future will always exceed our grasp.  But debunkers go too far when they dismiss all forecasting as a fool's errand.  I believe it is possible to see into the future, at least in some situations and to some extent, and that any intelligent, open-minded, and hardworking person can cultivate the requisite skills.

Call me an "optimistic skeptic."

~ Philip Tetlock and Dan Gardner, Superforecasting, p. 6

Kevin Duffy on the U.S. military's failed exit from Afghanistan

Imagine falling through the ice and laying all of your blame on the "exit strategy."  Maybe you shouldn't have ventured out on thin ice to begin with.

~ Kevin Duffy, Facebook post, August 27, 2021

Nick Reese dismisses record margin debt as a concern

The build-up in margin debt since the end of 2019 has been commensurate with the rise in market. In my framework, that's nothing to be concerned about - and the absence of a negative is a positive.  What would be concerning is to see a major build-up of margin debt relative to the market.

~ Nick Reese, "Axel's Take - Equity Market Report," Merk Research, August 25, 2021

Kevin Duffy on what drives the young trader

“If it sounds too good to be true, it probably is.”  

Today such commonsense wisdom is lost on many young traders in a toxic cocktail of greed, envy, anger, resentment, desperation, nostalgia (for dying brands like GameStop and AMC), techno-utopianism, historical revisionism and economic illiteracy.  They see profit as loot stolen from the laborer by the entrepreneur: win-lose.  The greater one’s net worth, the bigger the thief.  Trading in packs and holding on for dear life (“HODL”) is a way to tilt the game in their favor and even the score.  As Barron’s explains, “the bad guys are the short sellers, the market makers, and the Wall Street elites, in that order.”

~ Kevin Duffy, "Memecraft 2.0," The Coffee Can Portfolio, August 26, 2021

Kevin Duffy on the Robinhood IPO

The Robinhood IPO gives us a unique look at the market’s youngest and most aggressive retail investors.  Their actions, as any seasoned observer of investor behavior would expect, tend to be emotional and self-defeating.  Robinhood’s customers have gone from extreme caution at the March, 2020 stock market low to uber-aggressive, a period in which the S&P 500 doubled.

~ Kevin Duffy, "Robinhood IPO," The Coffee Can Portfolio, August 26, 2021

Charlie Watts on the 1960s

When people talk about the '60s I never think that was me there.  It was me and I was in it, but I was never enamoured with all that.  It's supposed to be sex and drugs and rock and roll and I'm not really like that.  I've never really seen the Rolling Stones as anything.

~ Charlie Watts, drummer, The Rolling Stones

June 2, 1941 - August 24, 2021

Phil Ochs on beauty

In such ugly times, the only true protest is beauty.

~ Phil Ochs

Tony Deden on the business owner

Instead of taking our cues from financial types, let’s consider the owner of a long-standing enterprise.  He wants to avoid going out of business (and so do I).  He is entirely uninterested in what others do (and so am I).  He wants to remain competitive, relevant and enduring (so do I).  Yes, he aims to be profitable but, he really knows that, in the long run, profit is the result of being successful at what you produce, not the result of chasing higher securities prices.  He, too, deploys irreplaceable capital.  He, too, considers the scarcity of his resources and the value they reflect in all his actions.  He knows the difference between something that has financial value and something that has true economic value (so do I), and he wishes to leave something meaningful to the next generation (so do I and so should all of us).

~ Tony Deden, "Arise, prudent man," Grant's Fall 2018 Conference, October 19, 2018

Vijay Kedia on investing and regret

Regret is a lifestyle disease of equity investing. 

~ Vijay Kedia, Indian investor 

(Kedia strictly adheres to SMILE as a principle in investing; which translates into Small in size, Medium in experience, Large in aspiration and Extra-large in market potential.)

Heraclitus on change

The only constant in life is change.

~ Heraclitus

Avi Salzman on the retail trading boom

Traditional investors may be tempted to write off the entire phenomenon as temporary madness inspired by lockdowns and free government money.  But that would be a mistake.  If zero-commission brokerages and fun with GameStop broke down barriers for millions of new investors to open accounts, it’s almost certainly a good thing, as long as most people bet with money they don’t need immediately.  Many new retail traders say they are teaching themselves how to trade, and have begun to diversify their holdings. 

In one form or another, this is the future client base of Wall Street.

~ Avi Salzman, "Meme Stocks Defy Gravity," Barron's, July 12, 2021

Martin Lau on learning from young people

First of all, the challenge rather for myself being not a young fund manager is that there are so many new things.  So, I just talked about video streaming and I needed to go to my colleague, and I deliberately put two youngest colleagues within our team sitting next to me, so that I can look at how they do video streaming.  Actually, one of them set up a shop and painted and sells stationery--but not from the company, from her own pocket, just for fun.  And by doing so you actually learn about how young people behave.  And I think it's fair to say the best business opportunities come from the younger people.  So, I think that's how I try to learn.

~ Martin Lau, FSSA Investment Managers, "Martin Lau: Now is a Better Time to Buy China," Morningstar's The Long View, August 3, 2021

Andy Kessler on the anti-Big Tech Biden appointees

President Biden appointed three tech-hating progressive pillars of piety to prominent government positions: Lina Khan at the Federal Trade Commission, who wants to break up Amazon ; Tim Wu at the National Economic Council, who has a book denouncing bigness; and Justice Department antitrust nominee Jonathan Kanter, who has represented Yelp and Microsoft accusing Google of anticompetitive behavior.  I don’t think even the Communist Party could stack the deck so well.

~ Andy Kessler, "A Chinese Warning for U.S. Tech," The Wall Street Journal, August 15, 2021

Fred Reed on the delusion of American power

Finally... there is the 1955 Syndrome, the engrained belief that America is all powerful.  This is arrogance and self-delusion.  In the Pentagon you encounter a mandatory can-do attitude a belief that the US military is indomitable, the best trained, armed, and led force in this or any nearby galaxy.  In one sense this is necessary: You can’t tell the Marines that they are mediocre light infantry or sailors that their aircraft are rapidly obsolescing, their ships sitting ducks in a changing military world, and that the whole military enterprise is rotted by social engineering, profiteering, and careerism. 

But look around: The US has failed to intimidate North Korea, chase the Chinese out of its islands in the South China Sea, retrieve the Crimea from Russia, can’t intimidate Iran, just got run out of Afghanistan, remains mired in Iraq and Syria, failed to block Nordstream II despite a desperate effort, and couldn’t keep Turkey from buying the S-400.  The Pentagon plans for the wars it wants to fight, not the wars it does fight.  The most dangerous weapons of the modern world are not nukes, but the Ak-47, the RPG, and the IED.  Figure it out.

~ Fred Reed, "Despair in the Empire of Graveyards," LewRockwell.com, August 21, 2021

Fred Reed on pulling out of Afghanistan

So why did this happen?  Why another rush to the exit as the world laughs?  Which the world is doing.  In a sentence, because if you do something stupid and it doesn’t work, it probably won’t work when you do it again. 

The psychological explanation is slightly more complex. Vietnam is a good example. America invaded a country of another race, utterly different culture, practicing religions GIs had never heard of, speaking a language virtually no Americans spoke, a country exceedingly sick of being invaded by foreigners, most of them white.  In Afghanistan the designated evil was terrorism, in Viet Nam communism, but the choice of evils doesn’t matter.  You have to tell the rubes at home something noble sounding.

~ Fred Reed, "Despair in the Empire of Graveyards," LewRockwell.com, August 21, 2021

Fred Reed compares the evacuation of Afghanistan to that of Saigon in 1975

And now we have done it all over again in Kabul, complete with helicopters over the embassy and a panicked evacuation undertaken way too late and sudden concern for turncoat Afghans who made the mistake of working for the US.  There is talk of importing 20,000 Afghan refugees to America.  I find it amusing that many conservatives, who thought the war was peaches because it was about democracy and niceness and American values, now object to importing people their dimwitted enthusiasms put in line to be killed.  Use and discard.  Countries and people.

~ Fred Reed, "Despair in the Empire of Graveyards," LewRockwell.com, August 22, 2021

Sam Stewart on how portfolio managers are pressured to own hot stocks

There's definitely pressure generated from two places.  One is the benchmark you're trying to keep up with, the other comes from investors.  If your failure to own Wirecard or Valeant has caused you to lag behind the index, you'll hear, "What, are you guys idiots?  These are companies that are working."

~ Sam Stewart, co-manager of Seven Canyons World Innovators Fund, "Why Don't More Fund Managers Detect Corporate Fraud?," Barron's, September 5, 2020

George W. Bush on Afghanistan

The men and women of Afghanistan are building a nation that is free, and proud, and fighting terror - and America is honored to be their friend.

~ President George W. Bush, Third Presidential State of the Union Address, January 20, 2004

Robert Greene on uncertainty

The need for certainty is the greatest disease the mind faces.

~ Robert Greene, Mastery

(Dan Ferris' quote of the week on the Stansberry Investor Hour, 11:45 mark, August 19, 2021)

William Arthur Ward on adaptability

The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.

~ William Arthur Ward, American motivational writer

Ken Fisher on the economic recovery

This was not a recession that we had in 2020, it was a constriction caused by the lockdowns.  And therefore the bounceback was not the kind of bounceback you normally get after an economic recession that has to correct for prior excesses and dislocations in the economy, but instead simply about unwinding the lockdowns...  It's not really a new cycle.  It's really just a return to the old cycle that was here before we were briefly interrupted by the Covid lockdowns.

~ Ken Fisher, "Mid-Year 2021 Stock Market Report," 0:40 mark, July 30, 2021

Jim Cramer on the DiDi Global IPO

You've got my blessing to bet on DiDi.  I would try to get as many shares as you can.

~ Jim Cramer, before the June 30, 2021 IPO

Richard Nixon on closing the gold window

In recent weeks, the speculators have been waging an all-out war on the American dollar.  The strength of a nation's currency is based on the strength of that nation's economy, and the American economy is by far the strongest in the world...  Accordingly, I have directed [Treasury] Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets except in amounts and conditions determined to be in the interests of monetary stability and in the best interests of the United States...  Let me lay to rest the bugaboo of what is called "devaluation."  If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less.  But, if you are among the overwhelming majority of Americans who buy American made products in America, your dollar will be worth just as much tomorrow as it is today.

~ President Richard Nixon, Bretton Woods speech, August 15, 1971

George Watson on an early critique of socialism

In 1901, Max Hirsch (1852-1909), a Prussian disciple of Henry George who in 1890 settled in Australia, completed an extensive book called Democracy versus Socialism which he believed to be the first comprehensive refutation of socialism ever published.  A radical himself, he saw socialism as the road to slavery, promising only 'an all-pervading despotism' by a new managerial class.  That was nearly half a century before George Orwell's Animal Farm.  But Hirsch's preface, characteristically, holds out no realistic hope that his warning against tyranny will be heeded.  That is because socialists cannot listen.  Confident in their conviction that social reform can only mean socialism, they are 'deaf.'  It is a book which, appearing in the first year of the twentieth century, sums up an age to come.  Anti-socialists do not quote it; Orwell and Koestler, a generation on, do not appear to have known of its existence.  It is a warning unheard.

~ George Watson, The Lost Literature of Socialsm (1998), pp. 16-17

Arthur Schopenhauer on the cyclical nature of truth

Truth is allowed only a brief celebration between two long ages: first damned as a paradox, then underrated as trivial.

~ Arthur Schopenhauer

Lawrence Lindsey on the decade ahead

The next decade is going to be a scramble for survival.  You need to think about it that way and prepare in order to have a prosperous future.

~ Lawrence B. Lindsey, "'Currency War' with Lawrence Lindsey," Stansberry Investor Hour, 53:45 mark, August 12, 2021

Milan Kundera on the struggle against power

The struggle of man against power is the struggle of memory against forgetting.

~ Milan Kundera, The Book of Laughter and Forgetting

Kevin Duffy on open-ended government wars

We should be opposed to all government wars: on drugs, on poverty, on terror, on racism, on climate change and, yes, on Covid. They are always open-ended, unwinnable and come with crushing costs. The only winner: Big Government.

~ Kevin Duffy, tweet, August 13, 2021

Stephanie Pomboy on stimulus and inflation

It seems clear that, if there is a slowdown in demand and spending, they're just going to use it as a rationale to do another round of stimulus...  The inflation is going to be a rationale for more stimulus which will fuel more inflation. 

~ Stephanie Pomboy, conversation with John Hathaway and Bill Strong, 23:45 mark

Katie Koch on high retail investor participation in the stock market

We're pretty excited about the increased participation of retail investors in the equity market.  Deeper market participation with more views being expressed is very good for active management, so we like bigger retail participation.  I also think it's interesting that people dismissed this as just a pandemic phenomenon, but that's clearly not true now because the world's reopening and the retail investor is still very engaged in ETFs, but also in these meme stocks.  And the activity remains elevated.  We invest in some of the brokers that cater to retail investors and volumes are still up 4x vs. pre-pandemic...  If you believe that this activity will continue, you should be focused on the beneficiaries of that retail activity and that would include things like exchanges, brokers and actually social media.

~ Katie Koch, Co-Head of Fundamental Equity, Goldman Sachs Asset Management, Bloomberg interview, 5:30 mark, June 11, 2021

George Carlin on politics

The word "bipartisan" usually means some larger-than-usual deception is being carried out.

~ George Carlin

Dan Niles on how retail traders saved AMC and GameStop

Those retail investors have saved both AMC and GameStop.  There's no question about it.  That's the only reason these companies are surviving today, they were able to raise money at incredible valuations.  So those CEOs should be really grateful to the retail trade.

~ Dan Niles, CNBC interview, 7:20 mark, June 4, 2021

Dusty Hill on his bass sound

It's like farting in a trash can.  Raw, big, heavy, and a bit distorted.

~ Dusty Hill, bass guitarist, ZZ Top

Dusty Hill
May 19, 1949 - July 28, 2021

Xi Jinping on imperialism

Some foreigners with full bellies and nothing better to do engage in finger-pointing at us.  First, China does not export revolution; second, it does not export famine and poverty; and third, it does not mess around with you.  So what else is there to say? 

~ Xi Jinping

Xi Jinping on the relationship betweent the U.S. and China

As economic globalization gathers momentum, China and the United States have become highly interdependent economically.  Such economic relations would not enjoy sustained, rapid growth if they were not based on mutual benefit or if they failed to deliver great benefits to the United States. 

~ Xi Jinping

Henry David Thoreau on the road less traveled

The only people who ever get anyplace interesting are the people who get lost. 

~ Henry David Thoreau

Henry David Thoreau on nonconformists

Every oak tree started out as a couple of nuts who stood their ground. 

~ Henry David Thoreau

Henry David Thoreau on disobedience

Disobedience is the true foundation of liberty.  The obedient must be slaves. 

~ Henry David Thoreau, “Thoreau and the Art of Life: Precepts and Principles,” p.23, Heron Dance Press, 2006

Henry David Thoreau
1967

ETF.com on new BlackRock climate ETF

On Thursday BlackRock issued the BlackRock Future Climate and Sustainable Economy ETF (BECO), an actively managed fund that invests in stocks of companies that seek to reduce carbon emissions in the broader economy. 

Notably, the fund is seeking to produce a net lower environmental impact than the MSCI ACWI Multiple Industries Select Index as measured through an assessment, rather than seeking to specifically beat that index’s returns. BECO has an expense ratio of 0.70%, and trades on the NYSE Arca.

~ Dan Mika, "ETF Odds & Ends: 2 Active ESG Funds Debut," ETF.com, August 6, 2021

Charlie Munger on dedication to reality

Your life must focus on the maximization of objectivity.

~ Charlie Munger

Charlie Munger on learning from the past

I don't spend much time regretting the past, once I've taken my lesson from it.  I don't dwell on it.

~ Charlie Munger

Alasdair Macleod on Karl Marx

Marx was a dead-beat plotter, who should have simply sunk into obscurity. But like Keynes in the following century, he made his half-truths sound eminently plausible. His training as a philosopher imparted a respectability to his theories. 

[...] 

The reason Marx was a thoroughly bad man, even evil, was he plotted not just the domination of one country, but the whole world by advocating the destructive forces of civil violence. He was a poor parody of a Bond villain. And as is the case with all socialists, he wanted total domination. You could take the view that he was a latter-day Don Quixote, delusional and mad, and that Engels was a sort of financial Sancho Panza without the wit. This would be incorrect. Marx was a failure as a philosopher, and instead of rethinking and recanting, he moved from a position of preparing himself for a leading role in what he saw as inevitable, to advocating violent social destruction. 

It was Marx’s wrong-headed philosophy that led to the deaths of a hundred million souls, perpetrated by those he inspired, as well as the enslavement of most of the population of the Eurasian land-mass.

~ Alasdair Macleod, "The Worst Man in Modern History," LewRockwell.com, May 14, 2018