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    Outside the Box, November 2012

    Popular Delusions: The bull case for safe havens

    November 30, 2012

    A month ago in Outside the Box, Dylan Grice made the case for the need for safe havens, due to expansive monetary policy. But what is a safe haven anymore?

    In today’s piece, a follow-up to last month’s, Dylan gives us a very good rundown on the historical relationship between equities and government bonds, in order to point out the very atypical current negative correlation between them. He then observes that

    … what constitutes the ‘safe haven’ changes over time. It’s important to...

    One (Biotech) Ring to Rule Them All

    November 17, 2012

    One Ring to rule them all,
    One Ring to find them,
    One Ring to bring them all and
    In the Brightness bind them

             (with apologies to JRRT)

    The world appears fixated on the fiscal cliff. And indeed, I have been shooting a video here in NYC all day with my friends (the usual brilliant suspects, et al.) on how the world looks after the election. And to say that my close-up interview/conversation with the chiefs of staff of Majority Leader Harry Reid and Senator Rob Portman (David...

    Four More Years

    November 9, 2012

    There have been many competing analyses of the results of the election last Tuesday. I am still trying to absorb the longer-term implications. One of the more thought-provoking pieces I read was from my friends at GaveKal. Four of their writers give us their initial thoughts, and not surprisingly (for them!) they don’t agree. But the piece does give us a broader take on the ramifications. And I love the first line in the lead paragraph (different dreams, indeed):

    The American electorate may...

    The Role of Risk in Asset Allocation

    November 2, 2012

    Diversification of your investments is the only real free lunch, or so we are told. But how do we go about deciding what to diversify into? In this week’s short Outside the Box, my friend Jason Hsu of Research Affiliates argues that the real basis for diversification should be risk. And given that risk seems to be rising everywhere we look, thinking about how to deal with risk in our portfolios makes a great deal of sense.

    I’m also including in today’s OTB a complementary piece by good...