"The Riff" with Byrne Hobart and Erik Torenberg

E13: Corporate Mortality, Momentum Investing, and Learning From Extreme Events

Feb 1, 2024
This podcast explores the mortality of corporations, why momentum investing works, and when to learn from extreme events. It also touches on preserving financial assets indefinitely, selling with Shopify, extreme events and power law distribution, and the economics of trade publications.
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INSIGHT

Corporate Mortality

  • Corporations are theoretically immortal, but market forces often lead to their demise.
  • Organizational norms and knowledge, however, can persist and spread, achieving a form of immortality.
INSIGHT

Long-Term Endowments

  • Preserving financial wealth over extremely long periods is unrealistic.
  • Focus on perpetuating beneficial behavioral norms for long-term societal resilience.
INSIGHT

Learning from Extreme Events

  • Extreme events often belong to known statistical distributions, offering limited new information.
  • Learning from these events is crucial for statistical modeling, like options pricing.
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