McKinsey: “Preserving the core of the business is paramount for most CEOs, because of a desire to respect the history and business value of established brands. Klaus Kleinfeld, former chair and CEO of Arconic and former president and CEO of Siemens, said, “When a company is over a hundred years old, a lot of people have done a lot of things right. I’m standing on the shoulders of giants. People who have been there before me made the decisions that benefited me.” At the same time, the CEOs we spoke to are aware of the fast-changing context in which they operate—especially in Asia—and the need to continually innovate to future-proof their organizations and maintain their market positions.”
Timothy Taylor: “Many of us now take the widespread availability of ride-sharing for granted. Indeed, many people take the restless innovation and energy of markets for granted in general. Ride-sharing in the real world has its warts and flaws and tradeoffs, as did the previous regime of taxicabs had, as do all real world institutions. But ride-sharing seems to me like an overall dramatic gain in welfare for the million-plus drivers who participate and the many millions of riders. And without the disruptive pressure of market forces, it would not have happened for years, or decades, or perhaps at all.”
FT reviews Nate Silver’s “On the Edge”: “This he divides in two. First, he probes the minds and habits of those who put real money behind their wagers. He breaks in the middle to study the effective habits of these and other, non-gambling risk-takers. The book’s latter half is devoted to bridging some of his theories on risk-taking with how these are used (and misused) in the sphere of investing. Here Silver hints at the debate over skill versus luck and even the morality of investing in AI. Silver has faith in his cohort’s qualities. “Gamblers, traders and model builders see the world as complicated . . . We recognise that it’s hard to beat the market — not impossible, but hard — and we have the battle scars to prove it.”” NYTimes: “The election forecaster argues that the gambler’s mind-set has come to define modern life.”
Bloomberg writes about cyclically adjusted price-earnings ratio, affectionately known as the CAPE ratio. “The CAPE attempts to answer a basic question: When investors buy a stock, they are essentially buying a stake in a company’s earnings, so how much are they paying for those earnings? The CAPE normally applies that question to a broad tracker, such as the S&P 500 Index, by calculating the ratio of the index’s price to a 10-year trailing average of its earnings per share after inflation. So, for example, the S&P 500 closed at 5,319 [on August 8], and its 10-year trailing average earnings are $168 a share after inflation, according to Bloomberg data, which amounts to a CAPE of 32 times. That’s high — nearly double the long-term average since 1881 and the third highest ever, exceeded only at the height of the internet bubble in the late 1990s and earlier this decade.”
