Welcome to my November newsletter. Here you’ll find a curated list of investing news, books and business advice that have made me think over the past month. If you like what you see or find them interesting, please take a moment to subscribe to my monthly newsletter so you’ll never miss a post.

 

INVESTING

Confirmation bias is the most dangerous trap for stock pickers — but you can learn to minimise it. Link

The opportunity cost of anxiety. Link

Predicting the crash by Robert Shiller, the father of CAPE:

“In short, the US stock market today looks a lot like it did at the peaks before most of the country’s 13 previous bear markets. This is not to say that a bear market is guaranteed: such episodes are difficult to anticipate, and the next one may still be a long way off. And even if a bear market does arrive, for anyone who does not buy at the market’s peak and sell at the trough, losses tend to be less than 20%.” Link

 

BITCOIN AND BLOCKCHAIN

Trying to make sense of cryptocurrency? I am too, but the links below might help. I’m wondering what happens when Quantum Computers render the current blockchain encryption useless.

Howard Marks is an old school value investor, and he has some very interesting insights into what makes a currency (about a third of the way down the page)

“What are the characteristics of a currency?

1. Most importantly, it’s something that people agree can be used as legal tender (to buy things and pay debts), used as a store of value, and exchanged for other currencies.

2. Currencies generally are created by governments. However, there have been exceptions: banks issued their own currencies in our nation’s first century, and it can be argued that the “Green Stamps” of my childhood, and airline miles today, have a lot in common with currencies.

3. For a long time currencies were backed by (and exchangeable for) gold or silver, but that’s no longer the case. The truth is, there’s nothing behind currencies these days other than their issuing governments’ “full faith and credit.” But what do they promise? New currencies are sometimes created out of thin air (like the euro, which wasn’t legal tender sixteen years ago), and sometimes they’re devalued.

4. Currencies change in value relative to each other, in theory based on differential purchasing power, and in practice based on changes in supply and demand (which can stem, among other things, from changes in purchasing power).” Link

Blockchain is the internet of money: Silicon Valley visionary Balaji Srinivasan explains how bitcoin works and why he regards it as revolutionary. Link

ICOs are in the new IPOs — quicker faster and potentially full of scams. Link

Read a balanced view on blockchains from the FT. Link (paywall)

Dubai has plans to launch a state-issued blockchain-based digital currency. Link

What powers Bitcoin? Take a look at life inside a Bitcoin mine in Inner Mongolia. Link

 

BOOKS AND READING

Talent Code by Daniel Coyle

This book is about how world-class talent is developed and the surprising thing Coyle discovers is that a few ingredients mean that ordinary people can become exceptionally talented. Link

Try the Blinkist app — It’s great for reading or listening to 15-minute summaries of non-fiction books. Link

 

QUANTUM COMPUTING

Want to know more about quantum computing? Read this introduction. Link

The ability of quantum machines to outperform classical computers is called quantum supremacy. Now Google says it has this goal firmly in its sights. Link

 

BLOG POSTS

Astronomers scanning ripples in space-time have detected the collision of two neutron stars for the first time—and, by analysing the flare from the cataclysmic crush, discovered that such stellar smash-ups are the source of gold, platinum, uranium and other heavy elements found throughout the universe. Link

Want to get smarter? Keep away from your phone (seriously). Link

 

ARTIFICIAL INTELLIGENCE

How safe are self-driving cars? Link

Self-driving cars are go! Autonomous cars without human drivers will be allowed on California roads starting next year. Link

Who decides the moral questions in Artificial Intelligence, and can we teach robots ethics? Link

Artificial intelligence research has made rapid progress in a wide variety of domains, from speech recognition and image classification to genomics and drug discovery. In many cases, these are specialist systems that leverage enormous amounts of human expertise and data.

However, for some problems this human knowledge may be too expensive, too unreliable or simply unavailable. As a result, a long-standing ambition of AI research is to bypass this step, creating algorithms that achieve superhuman performance in the most challenging domains with no human input. Google’s Deepmind demonstrate a significant step towards this goal.  Link

Tim O'Shea
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Tim O'Shea

Fund Manager with 15 years' experience as a successful business owner-manager. Passionate about helping people benefit from the power of long-term investing.
Tim O'Shea
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