The $100 Trillion Offer

Successful investing—at the deepest level, regardless of style or strategy—is the practice of having better information than the price you’re looking at. That’s the entire game. Buy or sell at one number; later, sell or buy at a better one. The gap is information.

This newsletter proposes that the conventional wisdom about how to obtain that information has become, over roughly the last half-century, almost perfectly inverted—and that the inversion is creating one of the largest sustained mispricings in financial history. 

Not a single mispriced asset. A mispriced epistemology—a systematic error in how the entire analytical apparatus looks at the world. The Signal Report is an attempt to describe the mispricing, to offer a framework for correcting it, and in doing so to provide the patient observer with something that’s genuinely scarce in the current market: a structural information advantage.

The world economy is, by various estimates, somewhere in the neighborhood of one hundred trillion dollars. Every dollar of it is being priced, at any given moment, by someone’s information about it.

Since we’re talking about forces that shape the entire world economy, I’m claiming this newsletter’s value proposition, with a degree of self-aware audacity, is a $100 trillion offer.

•    •    •

The conventional wisdom now runs roughly as follows. The world has become so complex, so dynamic, so saturated with noise, that direct observation of it is hopeless. The unaided human eye sees only fragments. The way through the fog, therefore, is mathematics—increasingly exotic mathematics—applied to ever larger pools of numerical data. The numbers are taken to be the world; the model is taken to be the territory; and the analyst’s task is to refine the model.