Josh Brown dismisses CBNC survey where 87% of strategists expect higher stock prices in Q4

It's too easy just to fade optimism all the time.

~ Josh Brown, CNBC's Fast Money, September 29, 2017

(In response to CNBC poll of Wall Street strategists in which 87% expect higher stock prices in Q4.  Brown dismissed a contrarian interpretation of this one-sided view as a "knee-jerk reaction.")

Kevin Duffy on capitalism vs. socialism

capitalism: serving others while serving yourself
socialism: stealing from others while serving yourself, justified by "serving the common good"

capitalism: motivated by improving your lot in life (ambition)
socialism: motivated by bringing others down (envy)

~ Kevin Duffy

Ray Dalio on confirmation bias

I think most people, too often, they start with an opinion.  There are psychological tests that show that people start with an opinion and filter information that comes to them to be consistent with their opinion.

~ Ray Dalio, founder of Bridgewater Associates ($160 bil hedge fund), interview with Tim Ferris, September 13, 2017

Woody Allen: "mankind faces a crossroads"

More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.

~ Woody Allen

Mario Draghi: "We don't see systemic danger coming from bubbles." (2017)

We don't see systemic danger coming from bubbles.  If you look at the various markets - the stock market, the bond market - the prime commercial real estate is the only area where you actually see stretched valuations... We don't see the other component of a bubble which accompanied the crisis in the pre-crisis time, namely an increase in leverage.  We see that credit remains pretty subdued all across the board.

~ Mario Draghi, ECB press conference, September 7, 2017

Jim Grant on the great interest rate suppression experiment

An interest rate is a price.  Prices convey information.  Distorted prices convey misinformation.  Build a new factory?  Reckon the value of a future cash flow?  Deduce financial risk from a credit spread?  Manipulated rates give you the data you need to arrive at the wrong conclusion.

Like the flu, mispricing is communicable.  Like a sneeze, arbitrage transmits the disorder from one place, and one asset class, to the next.  Pygmy interest rates lead to tiny real-estate cap rates and towering equity P/E multiples.

~ Jim Grant, "Meet the Carrefour S.A. senior unsecured 1 3/4s of 2022," Grant's Interest Rate Observer, September 22, 2017

Christopher Ailman on the limits of diversification this cycle

For the past 30 to 40 years, the common wisdom has been that diversification reduces risk, and the main diversifying asset has been fixed income. With interest rates in the U.S. at 200-year lows and negative interest rates elsewhere in the world, you can’t say fixed income is a diversifier.

~ Christopher Ailman, chief investment officer of CalSTRS, "The Trendsetter: Christopher Ailman of CalSTRS," Barron's, September 23, 2017