What's going on in Indonesia re MSCI? The simple summary is this: Locals cornered and wash traded a bunch of stocks up, artificially boosting market cap & liquidity with the goal of achieving index inclusion & unloading into passive buying. In other words, they tried to game MSCI. This went on for years and was succeeding, but it eventually reached utterly egregious levels where almost half the market cap was "saham gorengan" (deep fried shares), and some of the said stocks were trading at P/E ratios of 500x. Retail investors also jumped in, as did local institutions who feared underperforming the local market cap weighted index (JCI). The market distortions eventually became so blatantly obvious that even blundering MSCI eventually realized they were being gamed, but their blunt processes were not equipped to differentiate between "real" and "fake" prices (pro tip MSCI, real stocks trade at 5-10x PEs and fake ones >100x). MSCI decided if their systems can't differentiate between the two, the easiest and most bureaucratic option was to just boot Indonesia out of the indices. The lack of appropriate domestic market supervision & safeguards against market manipulation can be criticized. However, OJK (the local regulator) has already been taking action. The prices of many saham gorengan have already fallen 80% since MSCI announced earlier this year it was freezing new inclusions and considering downgrading Indonesia to FM (frontier). However, manipulation is not always that easy to clamp down on, some of the activity has moved to offshore vehicles, Indo retail and local benchmark hugging institutions also participated, and, it must be said, some of the players are politically connected, putting OJK in a difficult position. But they have been moving in the right direction & progress has been made. That is what makes MSCI's most recent escalation of threatening to kick Indonesia not just out of EM into FM, but excluding it from FM as well, a little puzzling and draconian. MSCI's behaviour is in a way not that surprising though, as like rating agencies, it is bureaucratic and usually behind the curve. They kicked Nigeria out of the frontier index for instance after years of currency convertibility problems (during which it should have been excluded), but they did so right at the point when a new government had been elected and had just floated the currency. My take is that while Indonesian conduct bears a meaningful portion of the blame, so does MSCI/passive. With passive growing to become such a large force in financial markets, it was only a matter of time before it was gamed, and what we are also seeing here is some of the stuctural problems/limitations of passive investing. Passive works best when its a small part of the market that can free ride reasonably efficient markets driven by active investors. However, when passive grows to become sufficiently large it can become distortionary, and capable of driving major market inefficiency and being gamed/arbbed. Recent developments potentially provide a substantial buying opportunity for long term benchmark unaware investors, though it will require a long term focus and volatility tolerance to benefit from. Exclusion from major indices will structurally raise the Indonesian cost of equity and result in a potentially durable valuation discount. Long term investors can benefit from that in the form of higher returns priced into stocks, but that doesn't mean a fast (or even any) recovery in valuations will necessarily occur (though it could). There is still 8mths until MSCI's final decision so the market may be oversold short term (active might not dump until its actually excluded from indices), but there could also be a wall of forced selling coming mid next year. Indonesia has other problems to be sure (governance under Prabowo), but that is not the proximate cause of the recent sell-off - it is purely fears of downgrade triggering passive and offshore active outflows (if Indonesia is small, off benchmark, and not a good news story, many active instos won't bother with it), and investors are thus front running those anticipated outflows. I for one am a buyer.

US "Here is Starlink, a powerful military technology. We'll give it to you for free and block Russia. Just please don't use it to strike Russian mainland targets. They have, you know, nuclear warheads and stuff, thanks". Zelensky: Uses it to strike mainland targets. US "Zel, see above. Also, btw, you may not have noticed, but we have a global oil/energy crisis atm, so can you please, you know, not use Starlink to hit Russian refineries and make things worse, esp with the midterms coming up. Ty". Zelensky, "nah, I think I will, and especially because the midterms are coming up. Go fuck yourself Trump". US, ok let's throttle their mainland access so they can't launch offensive strikes. Zelensky: "Omg I can't understand why the US would possibly do this. The US seems to support the other side."

Yields on CoreWeave's debt have blown out to 15% with CDSs implying a >50% chance of default over the next 5yrs. It takes a special degree of reckless incompetence to be flirting with financial distress while we still sit amidst an epic AI bull market featuring some of the most wildly-loose spending environments and capital market conditions a purveyor of rented AI compute could ever dream of. God help them if we ever have a downturn...

A lot of ire in the Lindsay Clancy case has been directed at the jury. But Massachusetts law actually bears a considerable portion of the blame. Unlike most US states & international jurisdictions, Massachusetts law is unusually favourable to defendants in requiring the *prosecution* to *prove beyond reasonable doubt* the defendant was *not criminally insane* at the time of the offense. The norm is for the burden of proof to be placed on the defendant to prove they were criminally insane, and a different evidentiary standard is also applied (clear and convincing evidence or balance of probabilities, not beyond reasonable doubt). Beyond reasonable doubt is a high standard. There cannot be any reasonable basis for being modestly unsure. That would be a difficult conclusion to reach given that she was on a cocktail of drugs most jurors will be unfamiliar with, and the cherry-picked testimony of psychologists by the defense on conditions that jurors will again not be experts on. We only have one side of the story, but one of the jurors interviewed post trial said that the hold-out juror admitted in deliberations there was reasonable doubt, but nevertheless refused to acquit her anyway. While one might applaud that action from the standpoint of a reasonable and fair verdict that holds people suitably accountable for the outcomes of their heinous actions, or finds such excuses insufficiently exculpatory given the gravity of the offending, if this was in fact the case (and again, we only have one side of the story), it was not an action made in conformance with the law. This is probably what exasperated the other jurors. More productive that criticizing the jury might be to criticize Massachusetts law. This case demonstrates amply that the current standard is much too favourable for defendants, and reform is needed to ensure inadequate accountability for heinous crimes is restored.

I posted the below comment on LULU last year. Is worth revisiting. Warren Buffett once wisely said "what counts for most people in investing is not how much they know, but rather how realistically they define what they don't know". Most investors are seemingly very poor at defining what they don't know, and it is a frequent cause of major mistakes/overpayment. Growthy investors willing to pay nosebleed valuations are usually the worst offenders, but value/contrarian investors are also not immune. Nerdy finance bros (of which I consider myself one) should tread with due and self-aware caution investing in stocks whose investment thesis depends on fickle and ever-changing consumer/fashion trends amidst relentless competition. It is devilishly difficult to predict the durability of earnings. And if you are going to take on the herd, it might pay to actually chat to a few customers...

Great analysis

Three reasons: *Because intellectuals don't want to do real 'pick and shovel' work. Thus they have to insinuate themselves into well-paid positions of officialdom for their idle intellectualism to be commercially rewarded and commanding of the social status they covet. *Free markets vs socialism is the economic analogue to evolution vs intelligent design in biology/creationism. Intellectuals fancy themselves as intelligent designers, and thus naturally prefer a system that requires them. A bottom-up evolutionary system has no meaningful role for a pompous intellectual overlord class to play, and so they instinctively resist it. *Hubris and arrogance are not unknown to accompany intelligence. These traits lead the intelligentsia to systematically overrate its ability to comprehend complex systems and to vastly underestimate the importance of both distributed knowledge and the power of evolutionary algorithms.

It's unlikely to be impossible - just wildly uneconomic and impractical. Techno utopians tend to forget - particularly during bull markets - that economics always trumps technical feasibility (eventually). Wishful thinking is likely colouring SpaceX longs & Musk's thinking. After all, it seems such a shame - after so diligently investing billions in launch capabilities - that there be so few commercial uses for it. Certainly not a TAM large enough to justify a multi-trillion market cap. Tapping into the stardust of the AI chip mania is a logical aspiration, but will prove a vain one.

A shorter/more intolerant attention span is a rational adaption to an increase in available information resources. If you were locked in a prison cell with only one book, you'd read it carefully and many times regardless of how banal. When the availability of information increases, the opportunity cost of committing undivided attention to just one resource increases - i.e. all the other things you could be watching/reading. Attention and mental energy is a scarce resource. Swiftly cutting your losses on information resources that do not appear to pass muster is a rational optimization in a world of informational abundance, not prima facie evidence of an attentional deficiency.

There is no such thing as a stock that can be dependably counted on to "compound". Believing as much is a sign of inexperience. Investors mix up their tenses all the time. They say a company is "growing" at 20% when what they really mean is it has grown at 20% in the recent past, and they expect it will grow at 20% in the future, which it may or may not. Equally, there are stocks that "have compounded" in the past, but that provides no assurances it will compound in the future. In practice, "compounders" are usually simply stocks where the business has performed well/grown in the past, and multiples have significantly risen, yielding strong and consistent historical returns. But that says nothing about what the returns will look like on a go forward basis. Future outcomes will be dependent on future business results, which are never assured, and starting point valuations. And the more certain investors feel about future business outcomes & the more obvious the company's attributes, typically the higher valuations are, neutering the benefits of the said certainty/quality. Sometimes "compounders" continue to compound, and sometimes they don't. Indeed sometimes they yield very significant losses (eg below), and there is nothing worse for long term portfolio compounding than overpaying and suffering major periodic losses. The term "compounder" should be consigned to the dustbin for serious investors.

The only context in which "may I meet you" is a good opener is a context where the guy is already established as very high value/status (eg that guy is a famous billionaire...), so much so that the woman may assume the guy would be arrogant and pushy. Disarming humility/respectfulness could then be considered charming. But for regular guys in a regular situation where high value has not already been established, sorry Bill the opener is absolutely terrible. The problem is that meekly asking her permission to engage implies you are lower value than her. Women are inundated with unwanted attention from low value men and have zero interest in wasting time talking to them. Women respond much better if you simply presume yourself to be attractive enough that it would be worth her time to talk to you (and ideally, are infact so). That conveys high value, and represents the self-confidence/assuredness women find attractive. Women don't want respectful, deferential attention from low value men. They want confident pursuit by high value men, and they also want those guys to assertively lead, not ask for permission and follow. Give the impression you are a respectful, deferential low value man and you will be immediately shut down, and that's exactly what this opener does.