More often than not, people lose because they don’t understand the rules of the game. It is not a “skill issue”. Markets are no different. Simple beats complex, a linear-regression saga: Linear Model Momentum.
Markets this Week
A short and sweet week to end the financial year…
More here: country ETFs, fixed income, currencies and commodities.
Links
Research
Tunneling and Hidden Profits in Health Care (NBER)
This study examines “tunneling” practices through which health care providers covertly extract profit by making inflated payments for goods and services to commonly-owned related parties.
Stock Repurchasing Bias of Mutual Funds (SSRN)
Mutual funds are less likely to repurchase a stock if they previously sold the stock for a loss rather than for a gain. After switching to managing a different
fund, fund managers still avoid repurchasing stocks they sold for a loss at a past fund.
Long-term exposure to residential greenness and decreased risk of depression and anxiety (nature)
Residential greenness is considered a unique and potentially modifiable exposure construct to reduce physiological stress and improve human health. Reduced air pollution was a significant mediator linking green environments to depression and anxiety.
Economics & Investing
Suicide Mission: What Boeing did to all the guys who remember how to build a plane (prospect)
the point of industrial policy in the US is mainly to reduce the extent to which the US must absorb the costs of industrial and trade policies implemented elsewhere. In fact this is a very important point that Rajan misses
@michaelxpettis on Raghuram Rajan’s article in the ft.
China blocks use of Intel and AMD chips in government computers (ft). It's also blocking Microsoft Windows and database products from foreign companies. (engadget)
China opens WTO dispute against US subsidies to protect its EV industry (reuters)
Global bank messaging network SWIFT is planning a new platform in the next one to two years to connect the wave of central bank digital currencies now in development to the existing finance system (reuters)
The Meltdown in Chocolate Is Coming (bloomberg)
A Pivot to China Saved Elon Musk. It Also Binds Him to Beijing. (nytimes)
A.I.
Large language models can do jaw-dropping things. But nobody knows exactly why. (technologyreview)
How Stability AI’s Founder Tanked His Billion-Dollar Startup (forbes)
Survey reveals almost half of all managers aim to replace workers with AI, could use it to lower wages (techspot)
Odds & Ends
‘Ozempic Babies’ on the Rise (people)