The price of everything

Under the influence

“I must create a system, or be enslaved by another man’s. I will not reason and compare: my business is to create.”

• William Blake.

 

It started with Cluetrain in early 1999. Roughly five hundred years after Martin Luther allegedly nailed his ninety-five theses to the door of the church at Wittenberg, a new polemic was posted online, at www.cluetrain.com. This correspondent stumbled upon a reference to it within a research note from Merrill Lynch’s (now discredited) internet analyst, Henry Blodget. ‘The Cluetrain Manifesto: the end of business as usual’ was the brainchild of four technologists and visionaries: blogger Christopher Locke; columnist David ‘Doc’ Searls; philosopher David Weinberger and entrepreneur Rick Levine. Its essential premise is that:

Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed, smarter, and more demanding of qualities missing from most business organizations.

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A real eye-opener

Something of a diversion, this week – but a helpful one, we hope. It turns out that ancient wisdom can sometimes be surprisingly up to date. That old Roman saw, mens sana in corpore sano – a healthy mind in a healthy body – is getting a vindication from modern science that points to a linkage that works in both directions. Shakespeare, too, was on the money when, in Macbeth, he wrote of

Sleep that knits up the ravell’d sleeve of care,

The death of each day’s life, sore labour’s bath,

Balm of hurt minds, great nature’s second course,

Chief nourisher in life’s feast..

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Yuck

It was nice of the EU to coordinate the release of the UK’s draft withdrawal agreement with the centenary of the World War I Armistice. The continental powers missed a trick by not forcing Theresa May to sign the agreement in the Compiègne Wagon in which the 1918 Armistice was signed, and which Hitler deployed to similar effect in June 1940, this time with the Nazis having the upper hand. But the original Compiègne Wagon was destroyed during World War II – we all have to make compromises, and some of us clearly have recently had to make more compromises than others.

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Events

“Events, dear boy, events.”

• Alleged response by the British Prime Minister Harold Macmillan, when asked by a journalist what is most likely to blow governments off course.

“I’m shorting two stocks in the U.K., but I’ve got a screen of about 50, and I might short all 50 if I think Jeremy Corbyn is going to be prime minister. Corbyn’s a Trotskyite. Now I know my Trotskyites well and I know you don’t want to be invested in the U.K. if a Trotskyite is prime minister.”

• Fund manager Steve Eisman, as reported by Bloomberg.

 

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Fireworks

A common practice among financial advisers is to run through a risk questionnaire with new clients. These questionnaires tend to ask investors how they might respond to certain hypothetical market movements – a correction, say, of 20 percent or more. As Morgan Housel points out in this (excellent) interview, rather than extrapolate out from what will typically be the relative calm of the current environment, investors – and their portfolios – might be better served in preparing for tough times ahead by recalling their emotional responses to prior incidents of heightened market volatility. Memories of a hard reality are far more tangible than speculations about future travails.

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