Sorry for the radio silence over the last week or so. Life and travel got in the way. I’m in NYC this week if any readers happen to see this and enjoy spending time with nerds…. Anyhow, here are some things I think I am thinking about:

1 – The Value of Critical Self Assessment.  One of the great things about writing in a public forum is that you’ll inevitably say some stupid things (I’ve said more than my fair share of stupid things over the years!). This creates a certain need for accountability because public figures earn their right to be public by justifying why their opinions are worthy of being public at all. I take this very seriously and it’s one reason why I value the back and forth on this website and in the forum. The website is very much a learning platform and a place where I can grow and expand my horizons while hoping to provide something valuable to the readers. But a big part of that requires the ability to be critical of one’s self.

I bring this up in light of Nate Silver’s very public critical self assessment of how he missed the Donald Trump phenomenon so badly. I don’t like that Silver was wrong because a lot of people take his opinion seriously. But what’s valuable about this process is that Silver’s own process will become improved as a result of this assessment. I always like to say “it’s in learning to be wrong that we can learn to be right”. Predicting the future is extremely difficult, but we all have to go through life doing it. Learning how to be less bad at it is a very valuable process. Self introspection is one of the most effective ways to go about doing this.

2 – How Risky Are the World’s Safest Assets?  Here’s a piece in the WSJ showing how much money you can lose in bonds if interest rates rise. Basically, the argument is, “the world’s safest assets are really risky”.  But this strikes me as a massive case of short-termism. For instance, they use a basic duration calculation to asses the interest rate risk of a 10 year bond inside of a one year period.  This makes no sense though. Buying a 10 year bond with the intention of judging it on a one year basis is like buying a CD which pays you 1% at maturity and then getting upset every month when you calculate your negative real return every month. You didn’t lose a dime in nominal terms and you will get your 1% in 12 months so why would you judge this product on any time frame less than 12 months?  You wouldn’t (or shouldn’t).  But for some reason we are constantly being barraged with arguments about how dangerous bonds are because they expose you to short-term interest rate risk.  Well, of course they do!  In other news, the stock market moves a lot on an intra-day basis!