Complex Systems
Complex systems are systems where the collective behavior of their parts entails emergence of properties that can hardly, if not at all, be inferred from properties of the parts.
Jason Badeaux and
Complex Systems
"An investment philosophy on ‘complexity investing’ from NZS Capital"
Investment philosophy on "complexity investing" from NZS Capital, emphasizing the need to embrace extreme events, balance resilience and optionality, and focus on quality, growth, and understanding change in portfolio construction.
static1.squarespace.comNZS Capital poses that the economy and the stock market are best studied as complex adaptive systems akin to biology. They emphasize investing in companies that are adaptable, long-term focused, innovative, possess long-duration growth, and maximize non-zero-sum outcomes. The approach involves fewer, larger positions in companies highly adaptive to disruption, high levels of quality, growth, and context, and smaller positions in companies with a wide range of potential outcomes.
The systems analysis community has a lot of lore about leverage points. Those of us who were trained by the great Jay Forrester at MIT have all absorbed one of his favorite stories. “People know intuitively where leverage points are,” he says. “Time after time I’ve done an analysis of a company, and I’ve figured out a leverage point — in inventory
... See moredonellameadows.org • Leverage Points: Places to Intervene in a System
“leverage points.” These are places within a complex system (a corporation, an economy, a living body, a city, an ecosystem) where a small shift in one thing can produce big changes in everything.