Recent quotes:

Taking a Disciplined Look at Irrational Investors | Yale Insights

The idea that might be most important about how we form beliefs is overextrapolation. It’s just saying that when we form beliefs about the future, we put too much weight on the recent past. If the recent returns on an asset have been good, we’re too quick to think that the future returns will be good. If they’ve been bad, we’re too quick to think they will continue to be bad.[…] this simple idea can shed light on a lot of key puzzles. One of them is excess volatility—the finding that, historically, the stock market has moved around more than can be explained by simple, rational models of investor behavior.[…]Overextrapolation may also explain bubbles. I’ve also done work trying to understand where overextrapolation comes from. I argued, in one of my first papers, that an idea of Kahneman and Tversky’s called representativeness may be an important driver of overextrapolation. When we see a good economic data point, we leap to the conclusion that it represents a positive trend. Representativeness is a possible source of this overreaction in financial markets.

The Paranoid Style in American Investing in 2021 - Bloomberg

An emerging theory, the Inelastic Markets Hypothesis, postulates that retail buying is able to warp prices for prolonged periods because so much of the market is now passive, not actively managed, and is therefore insensitive to changes in prices.   “Demand shocks and inelastic markets are the tissue that connects the meme stocks, Tesla and even crypto” says Philippe van der Beck, a researcher at the Swiss Finance Institute. 2 “Bitcoin can be seen as an extreme version of today’s stock market: it’s almost entirely detached from fundamental value as there are no cash flows for investors to discount. People are just betting on how they think demand for the asset will change in the future”

Quantifying Reputation and Success in Art

Early access to prestigious central institutions offered life-long access to high-prestige venues and reduced dropout rate. By contrast, starting at the network periphery resulted in a high dropout rate, limiting access to central institutions. A Markov model predicts the career trajectory of individual artists and documents the strong path and history dependence of valuation in art.

Barstool Sports’ Dave Portnoy Is Leading an Army of Day Traders

Scott Nazareth, a 29-year-old day trader from Toronto, said he’s a fan of Portnoy’s videos and believes older investors such as Buffett are missing opportunities in technology and airline stocks. “I kind of make fun of some of these investors,” Nazareth said of Buffett. “They just have a hard time understanding the new normal, the new business models.”

Crappy equity predictions

“Equity research analysts are in that camp of guessing and sounding impressive, but also working with these models that are relatively shaky,” he says. “They work well when things are slow and steady but don’t work well when people are thrown a curveball.”

Effective Ovarian Cancer Treatment Is Underused, Study Finds

A study published on Monday in The Journal of Clinical Oncology looked at the use of the abdominal treatment, known as intraperitoneal, or IP, treatment at six cancer hospitals from 2003 to 2012, and at patient survival rates. The six hospitals were all members of the National Comprehensive Cancer Network, an alliance of 26 cancer centers that calls itself “the arbiter of high quality cancer care” and creates widely used practice guidelines for cancer treatment, which include the use of IP. But even at these elite centers, IP treatment did not take off as much as experts thought it should. From 2003 to 2006, as research began showing it had benefits, overall use of the treatment rose from zero to 33 percent of patients. From 2007 to 2008 — after the major, landmark study and the alert from the cancer institute — the use rose to 50 percent of eligible patients. But then it reached a plateau. Rates varied from one hospital to the next, with 4 percent to 67 percent of patients receiving IP treatment. Researchers say that at smaller, less prestigious hospitals, the rates are even worse.

Rent seeking ennabled by innovation OR knowledge

Schumpeter is correct in asserting that entrepreneurs are fundamentally rent-seeking creatures. But Schumpeter was romantic in thinking that only innovation (i.e., finding new ways of doing things that lower costs or increase quality or create a new good or market) is the source of rent. Much more common is what his fellow Austrian Friedrich Hayek called the “particularized knowledge of time and place.” An entrepreneur makes his living from that knowledge, from a profound local understanding of demand, suppliers, and price.
We've quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. […] the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that’s 74% larger. The pie is simply bigger.
While U.S. retailers took in more than $4 trillion in revenues according to the most recent U.S. Census, wholesalers brought in $7.2 trillion selling everything from Bunsen burners to toner cartridges. Even better for Amazon: Of America’s 35,000 distributors, almost all are regional, family-run companies pulling in annual revenues of $50 million or less, and only 160 have more than $1 billion in sales annually. […] Amazon, meanwhile, booked more than $74 billion in revenues last year, selling everything from beds to server time with a viruslike strategy that values opportunity and disruption above short-term profitability. […] launched quietly in April 2012 with 500,000 items for sale. Two years later, with the site still officially in beta, that list of products has grown to more than 2.2 million–covering 17 product categories from tools and home improvement to janitorial supplies, stocking everything from 12-packs of Hawaiian Punch to schedule-40 stainless steel pipe. If 2.2 million products doesn’t sound like a staggering figure on its own, consider that the average wholesaler sells closer to 50,000 products online. […]
"There's no such call," Klinsmann said, when asked how he would respond if Loew telephoned him to request a mutually beneficial tie. "Jogi is doing his job and I'm doing my job. I'm going to do everything to get to the round of 16. That's what I'm going to do. There's no time to have friendship calls. It's about business now."
But Amazon still has its nuclear option. It would appear that unless Amazon backs down — through public pressure or government intervention — publishers will have no choice but to employ their own nuclear option: pull all their books from Amazon and throw their weight behind a law-abiding alternative. Perhaps the best solution would be an online marketplace controlled by the publishers — with the 30 percent commission being split 50-50 with the authors in addition to the author’s royalty.
The process of paying co-op fees to promote individual titles grew increasingly complex, especially after Amazon began selling different levels of promotion. Without dropping co-op fees entirely, Amazon simplified its system: publishers were asked to hand over a percentage of their previous year’s sales on the site, as “marketing development funds.” Publishers dread the annual negotiation of this payoff; one of them described it as “squeezing our nuts.” The figure keeps rising, though less for the giant pachyderms than for the sickly gazelles. According to the marketing executive, the larger houses, which used to pay two or three per cent of their net sales through Amazon, now relinquish five to seven per cent of gross sales, pushing Amazon’s percentage discount on books into the mid-fifties. Random House currently gives Amazon an effective discount of around fifty-three per cent. For a smaller house, Amazon’s total discount can go as high as sixty per cent, which cuts deeply into already slim profit margins. Because Amazon manages its inventory so well, it often buys books from small publishers with the understanding that it can’t return them, for an even deeper discount. Publishers sometimes pass on this cost to authors, by redefining royalties as a percentage of the publisher’s receipts, not of the book’s list price. Recently, publishers say, Amazon began demanding an additional payment, amounting to approximately one per cent of net sales. Once the fee was paid, publishing executives could discuss marketing strategies with Amazon staff; otherwise, they’d have to rely on the company’s algorithms.
the most significant excess returns earned from venture capital occurred in funds raised prior to 1996, and those funds averaged $96 million in committed capital. Many of those successful funds led managers to raise successively larger funds; which significantly eroded returns and maximized general partner profits through fee-based income at the expense of limited partner success. "The result is that institutional investors end up paying general partners – who typically commit only 1 percent of partner dollars to a new fund while LPs commit the remaining 99 percent – quite handsomely to build funds, not build companies," said Mulcahy.
Avastin, which it turns out seems unlikely to significantly improve the health of more than a relative handful of patients, had $6 billion in global sales in 2012. Avastin and Zaltrap must be administered intravenously in a medical setting. Cancer treatment centers and physician groups purchase drugs at a price set by the manufacturer and then seek reimbursement from payers at a higher price—a practice called “buy and bill.” The spread, or “cost recovery,” between the acquisition price and the reimbursement price drives revenues.
the digital world has created a situation in which there is virtually unlimited supply. Therefore, any money you can make on advertising goes down. Even if BuzzFeed or anybody else does better and their traffic goes up, their per-view revenue goes down. It’s a total catastrophe. You don’t sound very optimistic. I’m not really optimistic. The point of optimism is that up until a year ago everybody was desperate about mobile ad rates. They have started to come up — and in some cases, they’ve dramatically come up. There’s no traditional publisher who has not been burned in mobile and tablet. But the ad rates are coming up.
Bitcoin is volatile for two basic reasons: it's currently difficult to purchase Bitcoins with dollars, and there's a lot of uncertainty about the Bitcoin network's long-term prospects. These are both issues that should get resolved in the coming years, making the cryptocurrency much less volatile. Liquid markets help to prevent price volatility. When the price of gold or pork bellies or shares of Microsoft stock starts to fall, bargain-hunting buyers jump into the market and push the price back up.
In the first camp are the folks attracted to ‘quick money’, they are excited for Bitcoin and hope to time the market, making a quick 5-10x. These are the folks that you see selling right now. You can’t blame them, these folks are making (in many cases) life changing money, paying down/off cars, houses, etc. The second camp are what I consider to be the true believers. Those of us that understand that Bitcoin has the potential to change money forever. If you believe that a decentralized digital currency, free from government corruption and controlled by the masses is the future – then you’re in this camp. This is no easy road, there are going to be sell-offs, attempted regulation, and major unforeseen disasters. It’s not for the faint of heart. We could and probably will lose everything, but IF we pull this off, the results will be unlike anything we’ve ever seen.
one subtle feature that distinguishes the climbers from the fallers: whether their ticker symbols are pronounceable according to the rules of English—that is, whether it’s possible to read them out loud as if they were words, without adding extra sounds. The pronounceable OCIP, MEP, LEAF, and WUBA (OCI, Midcoast, Springleaf, and, respectively) appreciated by between one percent and fifteen per cent, whereas the unpronounceable ESNT, BRX, MVNR, and TWTR (Essent, Brixmor, Mavenir, and Twitter) depreciated by between half a per cent and fourteen per cent
“For the bulk of the market, the 90 percent, it’s probably the most challenging period for a buyer in the 25-plus years that I’ve been observing the market,” Jonathan Miller, president of Miller Samuel, said in an interview. In the second quarter, 3,638 units priced at less than $3 million were listed for sale, the smallest nonluxury inventory in nine years, according to Miller. The absorption rate, or the amount of time it would take to sell all those properties at the current pace of deals, was 3.9 months, the fastest in records dating back to 2004. In Manhattan, where the median price for a two-bedroom apartment is $1.35 million and a three-bedroom unit costs $2.63 million, the nonluxury category encompasses many first-time and move-up buyers, Miller said. Nationally, the median price for single-family home in June was $214,200, according to the National Association of Realtors.
On Amazon, you can buy a Monet, a Warhol or a Norman Rockwell for close to $5 million. But most of the works range in price from $100 to $5,000. And many of the galleries that have signed up are not high end.
Purple pricing works like this Start with limited number of units to sell or set a time after which the product has no value Start with a set high price and periodically drop the price Anyone who buys the product at a given price is guaranteed they will only have to pay the lowest price the last unit is sold for So if you like the product at a given price you should pay. You may not have liked it at $2.99 but when it drops to $1.99 you might find it attractive. You should agree to pay that price. The scheme guarantees you will not pay more than the lowest price someone else who buys the product after you pays. If the last price is $0.39, that is the price you will pay even if you bought in at $2.99. So it does not suffer from sideline or fairness issue.