The Dao of Capital
"As today's preeminent doomsday investor Mark Spitznagel describes his Daoist and roundabout investment approach, "one gains by losing and loses by gaining." This is Austrian Investing, an archetypal, counterintuitive, and proven approach, gleaned from the 150-year-old Austrian School of economics, that is both timeless and exceedingly timely.In The Dao of Capital, hedge fund manager and tail-hedging pioneer Mark Spitznagel--with one of the top returns on capital of the financial crisis, as well as over a career--takes us on a gripping, circuitous journey from the Chicago trading pits, over the coniferous boreal forests and canonical strategists from Warring States China to Napoleonic Europe to burgeoning industrial America, to the great economic thinkers of late 19th century Austria. We arrive at his central investment methodology of Austrian Investing, where victory comes not from waging the immediate decisive battle, but rather from the roundabout approach of seeking the intermediate positional advantage (what he calls shi), of aiming at the indirect means rather than directly at the ends. The monumental challenge is in seeing time differently, in a whole new intertemporal dimension, one that is so contrary to our wiring.Spitznagel is the first to condense the theories of Ludwig von Mises and his Austrian School of economics into a cohesive and--as Spitznagel has shown--highly effective investment methodology.
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7recommend
10mentions
7people
2017–2021years
100% recommend
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What Hacker News says
- - Jed Mckenna "Spiritual Warfare"
- N.N. Taleb "Black Swan", as great intro to his thought system which may well be called the "mediterranean soul".
Later books by him can be safely ignored, more worth in his Medium articles, especially the one on work and employment.
- Spitznagel "Dao of Capital", pound for pound one of the smartest books I've ever read.
- By Austrian economics- you can have stable prices OR stable money. We are being scammed for the last 100 hundred years, and the price volatility one sees in Bitcoin et al. is precisely the reflection of actual supply and demand constantly battling it out on the marketplace.
The fact that dollar or euro seem stable is only possible with the violent tempering of national banks and the like of IMF. They only seem stable.
Money as a measure of value for other goods is something that is crashing constantly and will continue to do so until we let go of of the crazy attempt to do so.
*no intended for you personally, just a good place to plug my two cents (pun intended)
I'd advise anyone to read some Mises or the Dao of Capital by Spitznagel, the book is whip smart and applicable to basically any endeavour.
- One of my favorite investing books (wait for it, it ties in!) is The Dao of Capital [0] which is all about contrarian investing. Great read on investing and for the philosophical perspective as well. In the book Mark Spitznagel (investment manager for Nassib Taleb's black swan inspired hedge fund, Universa Investments) has an entire chapter on how conifer trees take advantage of fire-cleared forrest floors to propagate at a higher rate. Fire clears faster growing endosperm trees which tend to dominate slower growing conifers (cone droppers) in the early stages of growth. The fire cleaning allows conifers to productively seed the forest floor and get growing with less competition in their early years. In fact some cones actually use fire as a signal to drop and open to release their seeds. Fascinating. Very eloquent writing, IMO.
[0] https://www.goodreads.com/book/show/16599562-the-dao-of-capi...
- A lot of this boils down to having a better understanding of uncertainty and probability, especially in terms of being non-naive when it comes to extreme volatility and risk. If you find ways to bet on this in a rigorous manner, the payoff is disproportionally larger. For the lay investor, the hard part is that this essentially means losing money 95% of the time [in those positions], something most people aren't comfortable with. That and some technical difficulties, like liquidity, etc.
Of course, the bets needs to be sized correctly. This is not something you'd put all your money into, and this is part of the design from the beginning. See Kelly Criterion https://www.amazon.com/KELLY-CAPITAL-GROWTH-INVESTMENT-CRITE... for how these people think about it in a rigorous way.
For those who are interested to read more on how this is done, have a look at the papers here: https://www.universa.net/riskmitigation.html
Spitznagel has also written a book called Dao of Capital which talks about the logic and underlying philosopy of these ideas: https://www.amazon.com/Dao-Capital-Austrian-Investing-Distor...
There's also Dynamic Hedging by Taleb https://www.amazon.com/Dynamic-Hedging-Managing-Vanilla-Opti... which talks about these options and their structure in more technical manner, though I haven't read it.
- Three things:
1. Economics in one Lessons. One of the most powerful books I've read on the economy. Will help you rethink and see deeper 2. Dao of Capital. Book by Mark Spitznagel -- goes into tail risk hedging, and his counter-intuitive investment thesis. He made 4000% over Covid 3. Dalio's essays -- from "The changing world order" to "Debt Crises"
- I recommend "The Dao of Capital", which is written by Mark Spitznagel. Spitznagel also deals with risk (but in a very Austrian + Daoist + Sisu way).
Both Spitznagel and Taleb have known each other for 20 years, and Taleb is an advisor on Spitznagel's fund [1]. But Taleb always appears to be more interested in self-promotion and picking up fights, whereas Spitznagel practices what he preaches.
I honestly believe that "The Dao of Capital" should've been a 3 volume treatise because it covers so much.
