Sometimes, you may want to follow an index but cannot access a fund, ETF or futures off it. For example, you may want to apply a levered strategy on the Large-Midcap Index but it does not listed futures. What you can do is try to reconstruct the target using what you have.
A simple example: Replication
It is obviously not bulletproof, but the point is that if you are desperate enough, there is a way.
Markets this Week
More here: country ETFs, fixed income, currencies and commodities.
Links
Research
Return Migration and Human Capital Flows (NBER)
For workers in emerging economies, the returns to a year of experience in the United States are 59-204% higher than a year of experience in the origin country. Migrants to advanced economies are positively selected on ability relative to stayers.
The Ant and the Grasshopper: Seasonality and the Invention of Agriculture (oup)
The Neolithic revolution saw the independent development of agriculture among at least seven unconnected hunter-gatherer populations. I propose that the rapid spread of agricultural techniques resulted from increased climatic seasonality causing hunter-gatherers to adopt a sedentary lifestyle and store food for the season of scarcity. Their newfound sedentary lifestyle and storage habits facilitated the invention of agriculture. This study suggests that seasonality patterns played a dominant role in determining our species’ transition to farming.
Empirical Tests of the Green Paradox for Climate Legislation (NBER)
The Green Paradox posits that fossil fuel markets respond to changing expectations about climate legislation, which limits future consumption, by shifting consumption to the present through lower present-day prices. Our findings confirm that restricting future fossil fuel use will accelerate current-day consumption.
The Streetlight Effect in Data-Driven Exploration (NBER)
When data shines a light on attractive but not optimal projects, it can severely narrow the breadth of exploration and lower individual and group payoffs.
Access to Credit Reduces the Value of Insurance (NBER)
Loans allow consumers to smooth financial shocks over time, decreasing the value of consumption smoothing from insurance.
Investing & Economics
Stupidity is our destiny: Historic closed-end fund overpricing (acadian-asset)
If you are not generationally wealthy, choose your major wisely:
India
Rural India's consumer products demand outpaces urban areas (reuters)
Amid global concerns over India-made drugs, Govt plans an exports revamp (livemint)
Private hospitals pull back on Ayushman Bharat amid low state funding (livemint)
India is seeing a sharp surge in ghost shopping centres with underperforming retail space surging by 230% year-on-year to 13.3 million square feet in 2023 (livemint)
RoW
Xi Jinping’s Plan to Save China Through Science (scholars-stage)
I Went To China And Drove A Dozen Electric Cars. Western Automakers Are Cooked (insideevs)
Belgium’s Ports Struggle with Surge of Chinese Electric Cars, Terminals Turn into Parking Lots (logisticsinsider)
Countries whose "miracle" growth period was driven by massive investment saw growth rapidly peter out once their economies reached investment levels above which they could no longer absorb additional investment productively.
China’s factory glut alarms the world, but there’s no quick fix (straitstimes)
France's tax code has a compiler in OCaml (github)
EU envoys agree to use profits from frozen Russian assets for Ukraine (reuters)
The walls of Apple’s garden are tumbling down (theverge)
Odds & Ends
The problem isn’t that life is unfair – it’s your broken idea of fairness (oliveremberton)
Over the past four centuries quadrillions of ants have created a strange and turbulent global society that shadows our own (aeon)
Greenhouse gas emissions might have already peaked. (vox)
Meme of the Week
