Every month or so, I sit down with my friend Ben Hunt from Epsilon Theory just to chat about the world, markets, music, comic books and decision theory. Because we’re all trapped in our houses, we decided just to do our normal lunch over Zoom.
The conversation touched on the genesis of his firm, Epsilon Theory, and the revelations about how the “unknown unknowns” of the markets are actually, in a sense, knowable, if we focus on the narratives that impact our portfolios and our lives, rather than just the structured data we’re used to processing.
But perhaps more importantly, Ben walked through the thinking behind one of his recent (and best) pieces, “Once in a Lifetime.” Along the way, he introduces the game theory concept of “minimizing maximum regret,” and how that can apply to everything from the policy response to our current predicament, to whether to stick to your re-balancing schedule when the market’s crashed.
You can find a replay of the conversation through our new benevolent overlords: Zoom. Click here to watch.