Sublime

The economy is not a closed static equilibrium system; it is a system perpetually open to novel behavior, and complexity economics forces us to keep this in mind.

There are shades of Soros’s reflexivity here. The market depends to some extent on the thinking of those participating in the market about the market. This is sometimes called a Keynesian beauty contest, after Keynes’s analogy of judging a beauty contest not on the basis of who you think is most beautiful, but on the basis of who you think others

Smart people would win. And dumber people, the providers of dumb money, would wind up holding billions (or trillions) of unpayable IOUs.

Buffett’s genius was largely a genius of character—of patience, discipline, and rationality.

Remember that every story has another side.

When people entrust money to financial institutions, they generally don’t have the expertise or time to make sure the institution is doing its job. In most cases, it is much more efficient for people to band together and pool resources to ensure that their banks and exchanges are on the straight

The massive shift to index funds over the past 15 years or so drove the valuations of the largest index components to levels which guarantee poor returns going forward. Poor returns, in turn, will guarantee these inflows will turn to outflows and the virtuous cycle will become a vicious one.” Or as Nassim Taleb says, “We have been fragilizing the

New is overvalued relative to great.