“We don’t live under a normal world; we live under a power law,” says Peter Thiel in his book Zero to One.
Power law distribution is a concept that is not frequently mentioned in the media, school, government, etc. If you asked a random person about this concept, they would likely give you a blank stare. But it’s power laws that ultimately shape the world across different domains, be it natural disasters, terrorist attacks, book sales, market share held by corporations, size of cities, investment returns, etc.
One of the most well-known power laws is the Pareto Principle, which states…
Anyone who works in the field of active investment management understands the pressure of trying to beat the broad market indexes. With so many stocks, bonds, and other financial instruments to choose from, the process of constructing and managing a diverse portfolio is a daunting task. The attrition rate is high; most portfolio managers tend to underperform the market average.
Hendrik Bessimbinder of Arizona State University has come to this conclusion in a recent study:
Fifty eight percent of CRSP common stocks have lifetime holding period returns less than those on one-month Treasuries. The modal lifetime return is -100%. When…
What are the most important factors to consider when choosing a career? It’s a complicated question, but it’s imperative to ask yourself the following: Should I follow my passion? Or should I do whatever will earn me the most money?
Choosing a field that you are very passionate about is the ideal choice. It certainly feels nice to hear such advice, especially when a billionaire speaking in front of the graduating class at a university cites it as “One of the keys to success.” Yes, you too can become rich by following your dreams!
On the other hand, you’ve probably…
Many would take the position that tolerance is a virtue that everyone should cherish and practice. It’s highlighted as one of the hallmarks of a modern and progressive society.
However, tolerance can actually be deadly if it’s take to its logical conclusion: tolerating those who want to transform our country as we know it.
To practice tolerance as an end in itself paradoxically requires us to accept the possibility that one day our country may choose to eradicate tolerance (as well as all the other rights and freedoms we enjoy).
Karl Popper’s Paradox of Tolerance encapsulates this dark conclusion:
After a year of unemployment, I learned quickly how things can fall apart. Adopting key habits to stay physically and mentally strong during such long stretches of joblessness is crucial. These foundational habits will set you on the right track.
It is easy feeling like you are on top of the world when everything is going your way.
Having a fulfilling, promising, and well-paying career undoubtedly keeps your self-esteem and confidence up in the stratosphere.
But what if you just lost your job, bills are piling up, and the economy is in the midst of a recession? …
“Man is the animal that speaks. Understanding language is the key to understanding man; and the control of language, to the control of man.”
- Thomas Szasz
Language is simply thought of as a way for humans to facilitate communication with each other, either through writing or speaking. But language is much more than that; it is also used as a tool to control, exploit, persuade, reason, manipulate, subjugate, and terrorize.
Whether used for good or ill, the power of language in influencing the way people behave is often underestimated.
There are basically two ways to control people: the use…
There are those that shudder at the thought of working for someone else. These people abhor the idea of being an employee and have zero desire to permit someone to be their boss.
They crave independence and have no desire to compete in the rat race. They don’t want to follow; they want to lead and pursue their own vision. They have ideas floating around in their mind and want to manifest those ideas in reality.
These people are entrepreneurs. …
The formation of asset bubbles in the economy — and the eventual pop that follows — has become ubiquitous in the free markets of the West.
Bubbles are characterized by a sharp, rapid, and sustained increase in price of an asset, such as a stock, bond, real estate, or currency. The price skyrockets into the stratosphere, reaching highs that are not justified by the underlying fundamentals. Once the buying frenzy tapers off, the price of the asset goes into free fall, erasing the gains of high-spirited investors and speculators. …