RS
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| Introduction | I'm one of the world's supreme contradictions: I'm a German born Portuguese. And therefore a well-balanced economist: my right pocket finances my left one. When I started to work in finance, I used to believe in efficient markets. I know, I believed in fairy tales for far too long. Nowadays, I only believe in Wile E. Coyote's gravitational principles: markets can deviate from fair value for a long time. But the Wile E. Coyote moment eventually happens. And when it occurs the catch up with reality is swift and spectacular. What to do in a Wile E. Coyote world? 1. Quantify! Quantify! Quantify! But don't forecast; 2. Respect the power of history; 3. Always try to look at reality from different perspectives in search of inconsistencies and non-obvious sources of value. Cutting a long story short: in economics and finance, as in life, be a cubist! |
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