This week in a Special Outside the Box, George Friedman of Stratfor reflects upon September 11th, a monumental date in our country's history. George strives to discern the current and future ramifications of US military presence in the Orient, posits what - if any - reasoning stands to support and drive Osama Bin Laden's underlying motives and actions, and the impact the tragic event and our response have upon the American psyche.
This Stratfor piece is an objective, thought-provoking assessment of the current military campaign that will have dramatic implications on our global economic and geopolitical landscape. Stratfor continues to provide insightful and pertinent research on economic and geopolitical events and their respective ramifications. Stratfor continues to generously provide significant savings to readers of Outside the Box, for further information please click here. For those who want information on what is happening in the world, Stratfor is a must. There website and services cover the world for you.
I hope you find this article enlightening and thought provoking as we venture forward in an uncertain world with perseverance and moral fortitude.
Within human nature there is a tendency to search for reasoning or logic to validate our own actions. This holds true in the academic sector as models are derived to provide an answer to a scenario, but sometimes such models do not translate well from the world of academia into that of the real world. This week's Outside the Box is presented by James Montier as he discusses his opinion on how the capital asset pricing model (CAPM) has affected the ways in which investors view and measure performance.
James is a good friend and the Director of Global Strategy at Dresdner Kleinwort Watterstein, a London and Frankfurt based investment bank. He is also a prolific writer and author of the book "Behavioral Finance - Insights into Irrational Minds and Markets."
In his article "CAPM is CRAP, or, The Dead Parrot lives!" Montier explains why he thinks the model is empirically bogus and how it has laid the groundwork for the modern day obsession with alpha and beta performance. He goes on to talk about how illogical it is to use relative performance as a metric when compared to measuring returns on an absolute basis.
This is an overall deep piece on the scale of thought but I trust that you will find it valuable in making investment related decisions.
Ancient Chinese philosopher Lao-tzu once said, "He who knows others is wise; he who knows himself is enlightened." Learning to overcome one's own emotions and bias can be one of the single hardest hurdles than an investor faces. It is equally challenging to discern between advice and noise by "experts" in any given field. Today's Outside the Box is written by my good friends Mark and Jonathan Finn where they address some of the psychological difficulties confronted by investors.
For those of you unfamiliar with this father son tandem, Mark (father) and Jonathan (son) run Vantage Consulting. Mark was the former chairman of the Virginia Retirement System and has a distinguished academic career. He consults with large pension funds and high net worth investors, as well as sits on the board of several large mutual fund families. Jonathan is well-known for his research on the topic of past performance and is a chartered financial analyst. In their article "A Look in the Mirror," they take a look at systematic errors in the investment field and how to deal with them.
We all have something to learn from looking introspectively in our decision making efforts. I hope you find this piece to be both enlightening and "outside the box."
I am pleased to present to you a thoughtful piece by good friend and business partner Jon Sundt in today's "Outside the Box." Jon is the President of Altegris Investments and a very insightful thinker.
In his article "Lost in America? Asset Allocation and the Old Brain," Jon takes a look at some of the psychological challenges we face in investing. He further goes on to discuss why asset allocation is such an important component to any investor's strategy amidst of an increasingly global and complex investment platform.
For those of you unfamiliar with Jon and Altegris Investments, they are my domestic partners headquartered in La Jolla, California. They provide high net worth investors and institutions with specialized alternative investments including managed futures, hedge funds and fund of hedge funds.
May you all enjoy this year's kick off of the festive season with great family, loved ones and friends. I trust that you will find Jon's piece to be very "Outside the Box."