Section
Wealth is geometry, not luck.
How to build, spread and protect it — sober, long-term, without the next hot tip. What interests us is the structure underneath the portfolio: order, risk, cost, time. Rarely exciting, and usually the reason anything is left at the end.
The lead story
He held commercial power of attorney and said: that is not a real economy, it is a parallel one. Thirty years later I held his sentence up against the numbers — against the ones that prove him right, and the ones that do not.
Partly. Financial markets do real work: companies raise capital there, prices are formed, savings are invested. What stands out is what the industry grew on: US financial services rose from 4.9 percent of GDP in 1980 to 7.9 percent in 2007, and Greenwood and Scharfstein explain a sizeable portion of that through rising asset management fees and fees tied to the expansion of household credit — fee items, that is, rather than capital formation. Philippon puts the cost of financial intermediation over 130 years at 1.5 to 2 percent of intermediated assets with constant returns to scale; that measure is contested and is not used here as proof. My father was right about the people who promised him quick money, and wrong to assume there was no honest way in.
Leif Daniel Schmidt
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vermoegen
Slow breathing nudges your nervous system in a measurable direction. But the size of that nudge is smaller than most guides admit — and the evidence is thinner than the confidence around it.
vermoegen
The tips were right. The analysis was right. I lost anyway — to a stop-loss I did not set and a glance at the fear index I did not take. A confession, with citations.
Leif Daniel Schmidt
