The current approach to investment management has no sound basis and doesn’t work. There is a better way.

The statistical and investment views of Nassim Nicholas Taleb, author of the blockbuster book The Black Swan, are easy to summarize. First, most probability distributions are fat-tailed, not thin-tailed like the normal distribution. That renders useless or wrong the application of almost all conventional statistical techniques.

I have indicted the securities industry for spreading “a web of deceptions that have become conventional wisdom.” But a small part of the industry does provide products and services that are beneficial and necessary. That is the subject of this article.

This lessening of government involvement, and the change in the corporate culture, together with a new or reinterpreted economic philosophy all combined to produce an unraveling of the United States that had for some time been incredibly materially productive for the benefit of all.

Much discussion of economics since the publication of Thomas Piketty’s book has indeed been influenced by his data and analytic framework.

I have just read the best book on the environment. But like many great books, it provokes introspection: There is a deep divide among environmentalists, even among individuals – including me – that can’t be bridged solely through reasonable argument or sound data.

Our immense progress in improving society’s standard of living over the last several centuries was possible because of advances in the discovery and production of energy. To assume that will continue is a grave error.

Sam Bankman-Fried’s widely anticipated guilty verdict has been rendered. But Michael Lewis’ book raises many questions, including the existence and extent of an actual crime.

How worried should we be about AI and what should we do about it? There is risk on both sides: of not taking warnings about AI seriously enough, and of taking them too seriously.

Financial journalism has a problem. Apart from a few writers such as Michael Lewis, it is essentially bought and paid for by the financial industry itself – especially, investment management.

Reading Brendan Ballou’s book, Plunder: Private Equity’s Plan to Pillage America, was to experience a continually reinforcing series of feelings of outrage.

No piece of technology is more crucial than the microchip. Its supply was central to the cause of the post-COVID-19 inflation, and the stability of the U.S.-China relationship hinges on its manufacture.

For many of those – now a clear majority – who believe climate change is a serious long-term threat, the recently announced breakthrough that nuclear fusion has at last produced net energy is an extremely hopeful sign. First, however, they need to read this article.

The strongest force standing in the way of nuclear energy is the antiquated, irrational fear of it.

Chinese-based technology sits behind some of the world’s most powerful companies – Baidu, Alibaba, WeChat, and Tencent, the subject of a new book. That has created immense wealth for a few bold entrepreneurs, but new policies by the Chinese government aim to reduce that wealth inequality.

When I heard that the investment management firm GMO had created a retirement planning tool to mitigate “sequence of returns” risk I looked forward to learning about it. After setting aside a stumbling block or two in its white papers, I found it to be the best platform for financial advisors I have ever seen.

In a new book, three economists assessed, using detailed data, whether income inequality in America is as great as everybody thinks it is. They conclude that, by a wide margin, it is not, for surprising reasons.

With the 2013 publication of Capital in the Twenty-First Century, Thomas Piketty singlehandedly made inequality the focus of economic and political discourse. In his new book, he goes farther – advocating Marxist-like policies to achieve what he considers progress – greater equality.

An allegation has been floated recently that inflation has been exacerbated by corporate greed. A neologism has even been coined for it, “greedflation.” The claim has been backed up by anecdotal and empirical data and it has been rebutted by anecdotal and empirical data. I will not try to answer the question of whether this allegation is true, but how its truth should be determined.

Madonna was right. That iPhone on which you may be reading this article is far less important to society than the materials – like steel and plastic – that were used to build it.

The failure to even mention nuclear energy as a solution for climate change is a mystery. What is the reason for this neglect of what would seem the world’s best hope for abating carbon emissions?

Are many of the recent problems in the world – from income and wealth inequality to China-U.S. hostility – the result of the structural overvaluation of the dollar and its reserve-currency status?

Unlike the multitude of offshore armchair commentators expressing their views on the violent social upheaval that began in June 2019, I lived in Hong Kong through that period.

The best tribute to Vanguard founder John C. Bogle near the end of his long life cannot be repeated without heavy censorship.

Celebrated venture capitalist John Doerr’s new book, “Speed and Scale,” offers a solution to the threats posed by climate change. But it is so mired in the swamp of the terms of the discussion that its proposed solutions will go unnoticed and have little impact.

Recently there has been a backlash against ESG-based investing. Some of this backlash is on target; some of it is completely wrong. None of it, however, fully identifies the worst thing about the ESG industry.

Vivek Ramaswamy’s new book, Woke, Inc.: Inside Corporate America’s Social Justice Scam, is addressed to what he believes are the evils of corporate America adopting a ”woke” posture and taking it upon itself to enforce woke-ness.

In a new paper, Taleb aims a scattergun at bitcoin and its underlying database technology, blockchain. Some of those scatter shots ding bitcoin or blockchain slightly or not at all. But some of them hit the mark squarely.

Rising inequality is but one symptom that the U.S. has swung to a society that is characterized by a disproportionate focus on individuals over the collective good. A national priority, similar to the Apollo moon project of the 1960s, is needed to reverse that trend, and there is an obvious candidate.

The motivation for a transaction tax is rooted in the belief that high-speed traders profit at the expense of the “little guy” – anyone from a Robinhood investor to an advisor acting on behalf of a client. A new book provides an excellent education on high-frequency trading that can help us to evaluate that proposition.

New research shows that the professionals who run, manage, and recommend strategies for pension funds and university endowment funds do worse than a passively managed index fund.

We’re going to have to do something about climate change. I will review the science and the possible solutions, and ask what role investors – including your clients – can and should have to foster a solution.

Much statistical analysis in finance depends on the assumption that variables have normal distributions. This assumption is far from correct. As a result, as Nassim Nicholas Taleb has rightly pointed out, most statistical results in finance are wrong. Now, a disciple of Taleb has tried to extend Taleb’s research by relating it to an obscure mathematical concept.

The institutional investor’s role in the effort to combat climate change is misplaced.

Financial advisors routinely adhere to the discipline of rebalancing portfolios, so much so that they invest tens of thousands of dollars in software to automate the process. That adherence has been regularly reinforced by financial writers. I show why this conventional wisdom is wrong and rebalancing may be as unwise an investment as the software used to do it.

The conventional wisdom is that put options are too expensive to use as “tail risk” insurance against extreme losses in equities. But reports earlier this year of their spectacular success in a fund advised by Nassim Nicholas Taleb prompted me to evaluate whether investors should use them.

Incredible as it may sound to nearly all observers – once they learn what MMT says – its basic economic tenets are agreed to by most knowledgeable economists. The dispute is not really over its core economic model; it is over fears of its perceived political implications.

There has been so much coverage of COVID-19 that some of the language of epidemiological models used to forecast the virus’s evolution is now familiar to us. But for those who do not fully grasp how those models work, here is a little primer.

Suppose that three months ago someone had asked you what the probability was that a virus would cause the stock market to crash in 2020 – not a computer virus, mind you, but a microorganism. You might have said the probability was infinitesimal. You might have said one in 10,000. Or you might have done a study – albeit utterly lacking in statistical significance – of what happened to the stock market when diseases spread in the past.

Awareness has become widespread that incomes before taxes of the bottom half – or more – of the American population have stagnated in the last 40 years, while incomes at the top rungs have soared. A new book shows that the divide is even greater after taxes.

The hedge fund firm Renaissance Technologies, founded by James Simons, has been an object of amazement, admiration, and envy for years, because of the incredibly high investment returns of its flagship Medallion fund. In a new book, author Gregory Zuckerman explains how Renaissance did it. He also shows how a key Renaissance employee used his riches to get Donald Trump elected president.

The deregulation initiated by Thatcher and Reagan in the 1980s was a corrective, inspired by economic theory, for the U.S. and U.K. governments that had gone too far in their zeal to protect consumers. A new book argues that now the corrective has gone too far.

America is no longer great, according to two prominent economists. In a new book, they present a compelling argument that the U.S. is rapidly losing its technology edge to China. The culprit is a lack of public investment in research and development, something not easily remedied.

Once again Facebook is at the center of controversy, this time with its plans to introduce its own cryptocurrency, Libra. It must overcome four key challenges, however, and even then it is not clear what Facebook ultimately hopes to accomplish with this venture.

Vehement opposition to nuclear energy has been a core tribal marker for 40 years, despite the consensus among scientists that it must be part of the solution to climate change. But that could be on the verge of a change. The asset management industry could play an important role in that change – but, first, it must end the practice of excluding nuclear energy from ESG and SRI mandates.

The secret of a great success is a crime that has never been found out because it was properly executed. The crime of Jho Low, the shadowy figure behind the 1MDB sovereign wealth fund, was well-executed. But it was found out, only because it was just too big – including the most lavish networking ever done.

Suppose you are retired, or soon-to-be retired, and you have no reason to leave a bequest. You just want to assure yourself of as much income as possible while you are alive. What is your best course of action? My research shows it’s almost impossible to beat an annuity.

An extreme, utopian political and economic philosophy has been embraced in America by a network of highly influential and well-placed apostles. And just as Communism ultimately brought about the collapse of the regime that established it in its most extreme form, the Soviet Union, this new extreme philosophy threatens to bring about the collapse of American capitalism.

We did a careful analysis of two fixed-indexed annuities (FIAs) that were the basis of a recent research study by Roger Ibbotson. Our conclusion is that these products are not a bad choice for an investor who is extremely sensitive to loss of capital. But a simpler, do-it-yourself alternative is better.

What if Theranos, the company whose fraudulent activities were exposed in 2015, had been a hedge fund instead of a healthcare company? The comparison shows why investment “science” is not science.