modelthinking

In my opinion, this highlights the importance of the hiring channel. When employers want to shrink their workforce (or at least slow its growth), they use hiring as their primary lever; and when it’s time to expand/accelerate, they pull the same lever. Ergo, young people are highly levered to sectoral, occupational or economy-wide cycles, something

One thing that struck me about their core insight - that AI is having a negative impact on AI-exposed occupations - is that it seems a lot like what we’ve seen in prior sectoral crashes.

For instance, construction employment had a nasty contraction after 2006. And employment in younger age categories plummeted even as the employment of older workers

The upshot here is that the more regularly you want to realize profits and generate income, the shorter your holding period should be.

Also included is a discussion on why loss aversion is not a behavioral bias, which is opposite to what I previously believed. It stems from a profound mathematical insight that threatens to upend the economics profession.

Despite our luck with the longevity of some of the strategies I described, most arbitrage opportunities eventually fade away—the notorious alpha decay that professionals like to lament. Alpha decay can be due to competition—too many people trading the same strategy, but equally often it is due to regime shift caused by market structure or macroecon

Most ready-made strategies that you may find in these places actually do not withstand careful backtesting. Just like the academic studies, the strategies from traders' forums may have worked only for a little while, or they work for only a certain class of stocks, or they work only if you don't factor in transaction costs. However, the trick is th

Finding a trading idea is actually not the hardest part of building a quantitative trading business. There are hundreds, if not thousands, of trading ideas that are in the public sphere at any time, accessible to anyone at little or no cost. Many authors of these trading ideas will tell you their complete methodologies in addition to their backtest

More money is lost by people trying to prepare for recessions than in recessions. However, there are times to lean in with conviction and other times to remain flexible, and I view this as a time to remain flexible.

US fiscal deficits will remain structurally large for the foreseeable future (i.e. for any investment time horizon of relevance, such as the next decade).

I outlined six reasons for this in my September 2024 newsletter, and they were the following:

1. Unbalanced Social Security


2. High healthcare costs


3. High defense spending


4. High interest expense


5. Political pola