Category Archives: Investment

Dry Powder is an Asset Not a Failing

In 1998 Long-Term Capital Management (LTCM) lost $4.6 billion in less than four months. Although the hedge fund was led by Nobel Prize winners (Myron Scholes and Robert Merton), noted professors, a Federal Reserve vice chairman and well-known Wall Street arbitrage experts, it made one of the most basic — but costly — investment mistakes.
LTCM [...]

Gasoline Prices: The Good, the Bad, and the Ugly

Today crude oil prices turned lower on speculation that the U.K. and U.S. might coordinate a release from of their strategic oil reserves. If true, it is probably motivated by a desire to shake out speculators. (I wrote about this strategy in a previous post here.) In the short-term, it may even tamp down gasoline [...]

With Apologies to Douglas Adams, Nassim Taleb and Every Major Religion: Why Investors Should Learn Poker in 2012

“It is not that there are no certainties, it is that it is an absolute certainty that there are no certainties.” Christopher Hitchens (1949-2011) from Hitch-22: A Memoir

In Douglas Adams’ book Life, the Universe and Everything, the computer Deep Thought comes up with the Ultimate Answer to the Ultimate Question of Life, The Universe and [...]

The IEA Beaned the Mascot and the Anatomy of a Bluff

“I wouldn’t dig in if I was you. Next one might be at your head. I don’t know where it’s gonna go. Swear to God “- Crash Davis
In the movie Bull Durham, veteran catcher Crash Davis advises rookie Nuke LaLoosh to bean the team’s mascot. This bluffed lack of control convinces the batter to stop [...]

The Big Wave and the Fallacy of Safety

I was 11 when I read The Big Wave by Pearl S. Buck. I still remember my confusion and horror at the end of the book. How could Jiya move back to the same fishing village where his family died in a tsunami? Not only did he return with his new wife but they built [...]

Cruisin’: Garment Bags and Caribbean Kmarts

In Austin, you can go just about anywhere in shorts or jeans and most people do. So I laughed when the local paper brought in a fashion reporter last year. His first column mentioned French cuffs. I suspected most readers thought he was referring to fancy bondage gear.
It’s not that I don’t have dresses in [...]

How I Lost My Social Life and Learned to Love Dissension

Technically, I shouldn’t have been there. I was the only first-level manager in a sea of higher-ups. My fourth-level manager should have attended the weekly meetings. But he was a single 40 year-old, going on 14. The last thing he wanted to do was burn Friday nights at work. I ended up with the short [...]

How the World Series of Poker Saved Me from the Market Crash: Part II

“OK. Well I just hope I can sell this to the Lithuanian,” the voice on the phone concluded.
I had just finished negotiating my contract to cover the 2008 World Series of Poker. It hadn’t gone as well as I had hoped. I got more than they initially offered, but not quite as much as I [...]

How the World Series of Poker Saved Me from the Market Crash: Part I

“The market can stay irrational longer than you can stay solvent.”
John Maynard Keynes
I thought a lot about Keynes’ cautionary words during the summer of 2007. But in the end, being early saved me. And strangely enough, the World Series of Poker gets most of the credit.
In February 2007, HSBC wrote down over $10 billion in [...]

Sweating, Gain Bias and the Value Bet

In July 2010, Paul Goydos shot a 59 in the first round of the John Deere Classic, becoming only the fourth golfer in PGA history to hit that mark. He birdied eight of the last nine holes. In this interview with NPR, Gaydos was asked if he was nervous as he lined up to make [...]