Some links (04/2017)


Highly recommended: JMX capital annual letter 2016

Lunch with the FT: Quant “godfather” Ed Thorp

Dan Loeb’s (Third Point) annual letter 2016 

What differentiates successful retail chains ? A focus on ROIC instead of EPS growth.

Long but very good read on the loss of manufacturing jobs, US vs. Germany and trade agreements

And of course: Charlie Rose interviews Bill Gates and Warren Buffett 


  • Strange that Brad DeLong gets this wrong. The US can’t run a trade surplus AND export large amounts of dollars to finance manufacturing growth in other countries.

    • And why is that ? Like China can’t finance African infrastructure because they have a (huge) trade surplus ?

      • I think the China example probably works. Here China earns dollars by running a trade surplus and invests (some of those) dollars into Africa. Africa then directly or indirectly repays China with resource rights etc.

        Please correct me if I’m wrong, but in order for the world to earn dollars, the US has to run a trade deficit. The way the type of development mentioned by DeLong works is by moving manufacturing jobs in higher income countries to lower income countries, then let the lower income countries export manufactured goods at a now cheaper price to the developed countries. In the case of Thailand this may mean that an American company exports capital to Thailand to open up a Hard-Disk factory there, but in turn those Hard-Disk will be exported to America, thus generating a trade surplus, and significant GDP growth for Thailand. Thailand will be running a trade surplus with America as a result.

        It’s also somewhat analogous with the pre WW-II situation, where Germany owed war-debt to France and England, France and England in turn owed war-financing to America, and America, in its protectionism, wouldn’t let Europe run a trade surplus to earn dollars and pay back their debts.

        The current core/periphery TARGET2 imbalances also seem to have a similar setup, but I don’t understand the situation quite as well. Michael Pettis writes a lot (almost too much) about these things, as of late on

    • he is not talking net figures, I guess.

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