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Whenever I read such things I like to think about what a seriously contrarian investment thesis would look like today. My guide is always what I, personally, wo

by api 10y ago

Whenever I read such things I like to think about what a seriously contrarian investment thesis would look like today. My guide is always what I, personally, would consider completely insane. Here's a few: - Bet on large-scale increases in employment in the USA and other developed countries in the next 10-15 years. - Bet against Apple and the Apple model (very polished vertically integrated silos) and its dominance in the market. - A big long bet on the music, film, or media industries. I don't have the spare cash to make significant plays but if anyone else is looking to lose money (or make tons) betting on something looney there you go. :) Here's one I remember thinking about years ago and considering crazy: - Betting on oil prices going down, or on energy abundance vs. scarcity. Years ago I was convinced that energy was going to get more expensive for the foreseeable future for fundamentally inescapable physical reasons. Obviously lots of other people were too because lots of people proceeded to lose their shirts on it. Fortunately I was not in any way invested in this thesis.

deleted 10y ago
[deleted]
danieltillett 10y ago
I think we will see a general increase in the power of the media industry over the next 10 years. Prices have bottomed and as AI gets better at predicting individual tastes we should see an increase in perceived value by consumers which should increase both consumption and prices. Oil is going to go down in price as other sources of energy become cost competitive and start to dominate the energy mix. There might be an energy shock due to supply disruption, but oil will never reach $150 a barrel again unless we get some massive inflation. At this point everyone has given up on the idea that central banks printing lots of money causes inflation. If you want to be contrarian bet on massive inflation occurring in the next few years.
- api 10y ago
  Yup. Your last point on inflation could dovetail with the increased employment "crazy thesis" I suggested. A bull labor market would flood a lot of the QE cash on the sidelines into the economy. Another factor would be the emergence of an "organized labor 2.0" that uses the Internet to coordinate... like think Uber meets AFL-CIO and powered by game theory and deep learning. Bull labor markets are highly inflationary. - On the Apple "polished closed silo" model: The conventional wisdom is that UX is everything. But a new generation or two is growing up today that is "digital native" and has grown up using computers of every kind. Might this generation of digital natives actually have less need for super-polished UI/UX hand-holding and inversely a greater desire for the increased freedom and versatility that comes with a more heterogenous open environment? Anyway this is all a tangent with nothing to do with the original post. :)
  - danieltillett 10y ago
    >Anyway this is all a tangent with nothing to do with the original post. But it is lots of fun to talk about - since when do we have to let the topic constrain the conversation :) On the topic of inflation there is so much money sloshing around that it is really hard to know what will happen. It really is unprecedented so we can’t rely on the past to be a good predictor of what will happen in the future.
    - api 10y ago
      I'll say this on inflation: housing, tuition, health care, and several other things are insanely expensive relative to wages and the rest of the economy. You can't have a market with no buyers. Two possible outcomes: (1) these deflate until they are reasonable, and (2) the rest of the economy inflates until these are reasonable. Given the amount of money sloshing around and the stickiness of esp. real estate prices, (2) may be more likely. My kids may know a country where everyone makes six figures and a starter house is... well... still $750k. Of course central banks and governments are not as dumb as people think. This is likely the intended outcome.
  - uiri 10y ago
    > The conventional wisdom is that UX is everything. But a new generation or two is growing up today that is "digital native" and has grown up using computers of every kind. Might this generation of digital natives actually have less need for super-polished UI/UX hand-holding and inversely a greater desire for the increased freedom and versatility that comes with a more heterogenous open environment? As a member of the generation which is often termed "digital native", I notice that other people my age are, in general, worse with computers than people in their parent's generation (again, generalizing). I would bet on UX becoming more important as people shift away from even bothering to read error messages.
- wtvanhest 10y ago
  The cool thing is that most of America's young people are already long inflation through our vast student loan portfolios
fab1an 10y ago
The important thing to keep in mind here is that the contrarianism of a bet is very obviously not a sufficient condition to make it a success. It's just that being contrarian AND right will usually be a more valueable bet than being right AND doing what everyone else does. Thus a successful contrarian would invest in things that everyone else considers insane, but where she herself has a good theory on why they are actually not insane.

by api 10y ago

deleted 10y ago

[deleted]

danieltillett 10y ago

I think we will see a general increase in the power of the media industry over the next 10 years. Prices have bottomed and as AI gets better at predicting individual tastes we should see an increase in perceived value by consumers which should increase both consumption and prices. Oil is going to go down in price as other sources of energy become cost competitive and start to dominate the energy mix. There might be an energy shock due to supply disruption, but oil will never reach $150 a barrel again unless we get some massive inflation. At this point everyone has given up on the idea that central banks printing lots of money causes inflation. If you want to be contrarian bet on massive inflation occurring in the next few years.

api 10y ago
Yup. Your last point on inflation could dovetail with the increased employment "crazy thesis" I suggested. A bull labor market would flood a lot of the QE cash on the sidelines into the economy. Another factor would be the emergence of an "organized labor 2.0" that uses the Internet to coordinate... like think Uber meets AFL-CIO and powered by game theory and deep learning. Bull labor markets are highly inflationary. - On the Apple "polished closed silo" model: The conventional wisdom is that UX is everything. But a new generation or two is growing up today that is "digital native" and has grown up using computers of every kind. Might this generation of digital natives actually have less need for super-polished UI/UX hand-holding and inversely a greater desire for the increased freedom and versatility that comes with a more heterogenous open environment? Anyway this is all a tangent with nothing to do with the original post. :)
- danieltillett 10y ago
  >Anyway this is all a tangent with nothing to do with the original post. But it is lots of fun to talk about - since when do we have to let the topic constrain the conversation :) On the topic of inflation there is so much money sloshing around that it is really hard to know what will happen. It really is unprecedented so we can’t rely on the past to be a good predictor of what will happen in the future.
  - api 10y ago
    I'll say this on inflation: housing, tuition, health care, and several other things are insanely expensive relative to wages and the rest of the economy. You can't have a market with no buyers. Two possible outcomes: (1) these deflate until they are reasonable, and (2) the rest of the economy inflates until these are reasonable. Given the amount of money sloshing around and the stickiness of esp. real estate prices, (2) may be more likely. My kids may know a country where everyone makes six figures and a starter house is... well... still $750k. Of course central banks and governments are not as dumb as people think. This is likely the intended outcome.
- uiri 10y ago
  > The conventional wisdom is that UX is everything. But a new generation or two is growing up today that is "digital native" and has grown up using computers of every kind. Might this generation of digital natives actually have less need for super-polished UI/UX hand-holding and inversely a greater desire for the increased freedom and versatility that comes with a more heterogenous open environment? As a member of the generation which is often termed "digital native", I notice that other people my age are, in general, worse with computers than people in their parent's generation (again, generalizing). I would bet on UX becoming more important as people shift away from even bothering to read error messages.
wtvanhest 10y ago
The cool thing is that most of America's young people are already long inflation through our vast student loan portfolios

fab1an 10y ago

The important thing to keep in mind here is that the contrarianism of a bet is very obviously not a sufficient condition to make it a success. It's just that being contrarian AND right will usually be a more valueable bet than being right AND doing what everyone else does. Thus a successful contrarian would invest in things that everyone else considers insane, but where she herself has a good theory on why they are actually not insane.