Voiceless: stocks, stories and the art of valuation
Investment aphorism: Value of nothing How much humanity is tied up in language? Seth Godin: True marketing. Green Finance Conference: On not giving up Cormac McCarthy. Paul Salopek: A walk - Yunnan.
Investment aphorism: Value of nothing
How much humanity is tied up in language?
Seth Godin: True marketing
Hedge fund Carbon Accounting
Green Finance Conference: On not giving up
Cormac McCarthy: an American great
Paul Salopek: A walk through Yunnan, China
Links: Speed cubing, on NHS, Co2 in food.
I like aphorisms. When you dwell on them the best ones make you think about all sorts of ideas. The vague ones can inspire critical thinking. Plus they are short. Some are twee but even the tired ones are tired because they’ve held some element of truth for so long. I collected and devised many of mine own in a small book a few years ago. Now, I am dwelling again on investment type aphorisms as applied to life.
I have:
Every stock has a price. Not every stock has value.
Oscar Wilde wrote: (In Lady Windemere’s Fan via Lord Darlington):
a cynic was ‘a man who knows the price of everything and the value of nothing.‘ :
Warren Buffet wrote:
Price is what you pay. Value is what you get
Philip Fisher:
“The stock market is filled with individuals who know the price of everything, but the value of nothing.”
The price part seems obvious. There is a listed price for assets or products and you pay that and receive the item or share.
The value part fits on two ideas. One idea is “intrinsic value”. In an investing context, the idea is that price and value are not always equivalent. There are times when the price you pay is less than the value you receive (a bargain), and other times when the price is much more than the value. Investors looks for opportunities where they believe the intrinsic value of a stock (what you get) is greater than its current market price (what you pay).
This idea is applicable in life beyond investing. You pay a high price for a luxury item, but if it doesn't bring you proportional happiness or utility. Conversely, some experiences or items might be low or free in price but offer enormous value in terms of enjoyment, knowledge, or emotional well-being. This can be particularly true for experiences.
More on this in the blog and with caveats here.
Is the only difference between animals and humans, language? Is language what makes humans unique?
These questions were asked of me at university. They are asked in philosophy, they are asked in neuroscience, they are asked in linguistics.
I’ve met people who do not have facility with language. And, yet, I say they are human. More than that they can teach us language speakers about what it might mean to be human. They can show us our humanity by their presence.
JP was late to language and now his language is atypical. Many do not comprehend him. At times, I do not comprehend him. (Do we ever fully comprehend one another?) There was a point, when we thought maybe JP might not have language. Mum or Dad or the equivalent are often the first words a child speaks.
Spike spoke his first word with his hand. The sun had risen late and bright on a winter's day, its incendiary rays dissolving the darkness at the edges of the blind. I pulled a cord and the blind folded up on itself, and light flooded the room. Spike lay sleepy amongst the rumpled sheets of our bed. He squinted, raised his hand next to head and opened and closed his pudgy starfish fist. He had made the Makaton sign for "light". We were charmed by it, as all parents are by the child's first words. I don't think we gave any thought at all to the abstract nature of the concept he had chosen to communicate. Not "Mama". "Light".
He did find a word for Mama - his word was “Un-de” - and for weeks and months this was his word that in slightly different intonations also symbolised other ideas along with Mum.
I spoke with Steve Unwin a while ago on this. His son occasionally says “cup of tea” which represents a multitude of things.
Anoushka writes:
Another characteristic of Spike's speech is a preponderance of delayed echolalia or "scripting", which is the repetition of learned words and phrases some time after they have been heard and committed to memory. This can be meaningful and functional communication and Spike uses it in quite a subtle, nuanced way. Sometimes the phrase, or script contains the essence or feeling of what Spike wants to convey. People who don't know Spike well might miss the relevance of what he has said, or it may seem out of context. More often he uses scripting as a short cut. He will deploy someone else's words because it is quicker and easier than organically assembling his own response or contribution.
Spike also uses scripting for non-functional purposes, i.e. without communicative intent. He has a visceral relationship with words.
I think a scientist might argue that it is language that separates us from animals but on being with non-verbal people, I think I can say it is also something more.
I thought about this again listening to Chomsky. Supposedly, GPT suggests:
Noam Chomsky, a renowned linguist, considers language to be a core defining feature of modern humans, acting as a source of human creativity, cultural enrichment, and complex social structure1. However, when it comes to individuals who may not have language, Chomsky's perspective is that thinking can occur without language. According to him, a thought is generated through a "series of fragments" and then eventually, the "externalized" pieces of language accompany it. He further emphasizes that even when language is used to convey thought, there remains "a lot of stuff you just can't express" in words2.
So while Chomsky highlights the significance of language in human life and evolution, he also acknowledges the capacity for thought and cognitive processes to exist outside of language. It's important to note though that these views are about thought without language, and not directly about the "humanity" of individuals who do not have language. The concept of "humanity" can involve many factors beyond language and thought, including empathy, social behavior, self-awareness, and more.
I enjoyed Seth Godin speak to Tyler Cowen. Seth runs the alt-MBA which Improbable leadership has done. Seth has a lot to say on “True” marketing and the story we tell ourselves.
What’s a story? A story isn’t always The Princess Bride. A story isn’t always once upon a time. A story is the way it smells when you walk into your mother’s house and you smell apple pie, because you have a Proustian connection to how that felt a long time ago. A story involves status and affiliation. It’s very complicated. I’m not ready to say that marketing is a short story. I think that marketing is a complicated story.
We know the difference from a thousand clues between a $500-a-night hotel and a $40-a-night hotel, even though both rooms are dark and quiet in the middle of the night. We want those things. Those stories inform our lives. They are why we bought the eyeglasses we bought and why we drive the car we drive. There are people who believe that a utilitarian sort of Soviet mindset is better, but even that person is driving their 25-year-old Pontiac because the story they tell themselves about that car makes them feel better.
Green finance. I went to the CGFI annual conference. I couldn’t stay the whole day. I believe the talks are recorded and will be available later. I didn’t learn much new content although Ben Caldecott (by video) have a good overview of the various projects and organisations doing good work here. There is a lot happening. Check it out.
I wanted to pick up on one comment a panelist made on scenarios and stress testing. The panelist essentially argued that if we could not do better we should not bother. I disagree.
I think this is wrong and the wrong incentive. Trying and failing has enormous learnings especially versus the counter factual of doing nothing. Perhaps you could argue the counter factual would be putting the effort into something that works but we have limited understanding about what those things are.
The better counter arguments come from economist / thinkers like John Cochrane on this.
I don’t think we know exactly what to do about the macro-economic assessments for climate but we need to try and do more. It might not turn out better, but that’s OK, it is still better than not bothering.
Jason’s Mitchell’s paper on thinking about carbon accounting for hedge funds and short selling is now in the public domain. You can check it out here (via Linkedin) or here on my blog.
How should short selling account for carbon? Does selling short impact cost of capital or engagement ? My friend Jason Mitchell discusses various views and in particular how regulators have started to think about carbon accounting with hedge funds.
We started talking about this in a podcast a while ago (link end), and you can now read some collected thoughts in the paper which is now publicly available.
- The role of short selling in sustainable finance, especially in a net zero context, has been increasingly discussed and debated among regulators, market participants, investor initiatives, investor trade organizations, and #ESG data providers. There is a concern that hedge funds may, intentionally or unintentionally, employ short selling to misrepresent their real-world impact, which is distinct from exposure to financial risk. Download paper here.
Fascinating insights from Paul Salopek who has just walked across Yunnan.
https://www.nationalgeographic.com/culture/article/salopek-out-of-eden-china-yunnan-handmade-road
“The most corrosive injustice encountered, up close, in every human culture I’ve walked through? That’s easy: the shackles that men lock, cruelly, arbitrarily, on the potential of women. (Who’s underpaid? …Who’s the last to rest?)”
Excellent travel writing.
Cormac McCarthy’s first five novels were totally ignored by the culture media. None of them sold more than 5,000 copies. Even Blood Meridian—now widely considered a modern classic of American fiction—got remaindered after only selling 1,883 copies. (That’s why first editions now sell for $10,000+)
Cormac died recently and was considered one of the great writers of American fiction.
This (YouTube/podcast) was one of his last rare interviews in 2022on his interst in science. But I particularly like this wide ranging interview at the Sante Fe Institute (an institute for complexity, and scientists who are somewhat maverick or have no other easy hang out) in 2017.
Quick links:
Max just broke the world record! “When Max was a baby Max Park’s parents, Schwan and Miki, knew something was different with their son. He seemed to live in his own world. For a time they wondered if he was deaf…. Speed cubing record broken and a little back story. (My LI)
In a new consortium, companies and university researchers will create a sustainable source of proteins for human food derived from CO2. The aim is to help fight the rising global problems with food insecurity and greenhouse-gas emissions from agriculture.
On NHS. Walk and chew gum. NHS needs investment in particular in physical infrastructure and captial spending AND needs reform. Needs both as Sam Freedman makes clear. Too many years - decades - of capital underspend. His substack.