Certainty equivalent value is the concept of applying a discount to a stream of cash flows based on how variable or risky the stream is…like the inverse function of the risk premium.

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man. - George Bernard Shaw

There are these two young fish swimming along, and they come across an older fish swimming the other way, who nods at them and says, “Morning, boys, how’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, “What the hell is water?” David Foster Wallace

Here’s a fun little update of that visualization of the financial Twittersphere I posted in May. This one is in 3D, you can zoom (with scroll wheel) and drag it around (with mouse, also see controls in top right).

Mayor: What do you mean, “biblical”?

The soldier who loses his rifle faces harsher punishment than the general who loses the war. — Anonymous soldier

It’s been a year since we posted our last list of people to follow on Twitter for financial news. Time for an update!

There is no racial bigotry here. I do not look down on n******s, kikes, wops or greasers. Here, you are all equally worthless. _ Gunnery Sergeant Francis Hartman

This is a slightly extended “director’s cut” of a post written for CFA Institute Enterprising Investor.

The first principle [of scientific inquiry] is that you must not fool yourself – and you are the easiest person to fool _ Richard Feynman

The national security complex is putting on the full court PR press for encryption back doors. See here and here. Basically this is about giving someone a TSA lock to your phone and promising to keep it really really safe unless a legit law enforcement request is received. Of course, legitimacy is in the eye of the beholder.

Here’s a word cloud of StreetEYE headlines in 2015 (click to embiggen).

Tim Cook has been running around heralding the end of the PC. A self-serving assessment, but Intel and the PC ecosystem are going to struggle to maintain their traditional relevance. In this post, I will look at 1) the narrowing Intel/ARM performance gap, and 2) what the ‘end of the PC’ might look like.

There’s this notion going around that since the Fed buying Treasurys was QE, therefore China selling Treasurys constitutes monetary tightening. Nope. The root cause of the disequilibrium and resulting capital flows is capital flight from China to the US.

A hard problem in retirement planning is a safe spending rate, so you don’t outlive your money.

A rant on politics for a Labor Day weekend.

A donut with no hole, is a danish. Ty Webb

A quick post about poker! That seemingly simple, deceptively complex game with a number of interesting parallels to investing. I just watched the MIT lectures on ‘Poker Theory and Analytics,’ an ‘Independent Activities Period’ mini-course, and for our mutual amusement, I worked through the math on bluffing, which is an interesting problem I had never done the full deep dive into. Here it is, including a Mathematica notebook.

Curiouser and curiouser! — Alice in Wonderland. Having written about Greece the last couple of weeks, why stop now?

So, last week I said, Greece was getting booted out of the eurozone.