Brainstorms: Creativity and Complexity

It is clear that in this new age of money management, people are focused on two things: minimizing volatility and short-term time horizons. Focus your creativity, research, and acquiring of expertise in the OPPOSITE of these things.

It’s when people throw their hands up in the air and say “ok I have no clue what’s happening” that the rules of the game have clearly changed. Until this happens, we will keep sailing smoothly and compressing volatility.

When uncertainty exists and there is a “fog of war” environment, experience in making decisions with incomplete information is critical. When there are no rules and no model for how to act, it’s experience that provides the most value.

The interesting thing about financial markets is that so many systematic strategies are operating today. The reliance on experience and discretion is becoming less and less of the overall makeup of things. Passive flows are obviously taking over a lot and the active space is turning more systematic. To be fair, the market has become significantly m

I like reading older books to learn how to think and structure ideas. I like reading academic papers and modeling data to have a read on the current state of information.

One interesting idea is how the decisions or actions you make are either dependent or independent of experience. For example, some things that are highly complex require zero experience to come to a conclusion on or do. Inversely, some things might be incredibly simple but require significant experience.