The Long View Daniel Rasmussen: ‘Be Very Wary of Illiquid Asset Classes’
98 snips
May 6, 2025 
Daniel Rasmussen, founder of Verdad Advisors and author of 'The Humble Investor,' shares insights from his impressive finance background. He emphasizes the importance of historical context in investment decisions. Rasmussen critiques private equity for its inflated valuations and high risks, advocating for caution in selecting illiquid assets. He discusses the unpredictability of markets and the value of understanding volatility. Additionally, he highlights opportunities in smaller companies and shares strategies for navigating economic uncertainties.
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Greek Shipping and Competition Neglect
- Greek ship owners exemplify competition neglect by ordering new ships based on current high profits without anticipating peers' similar actions.
- When ships are delivered years later, shipping prices decline due to oversupply, highlighting the importance of meta-analysis in investing.
Ken Arrow's Weather Forecasting Memo
- Ken Arrow found long-range weather forecasts during World War II to be terrible and recommended using long-term averages instead.
- Despite this, forecasts were needed for planning, showing the need to balance humility with practical decision-making.
Volatility and Correlations Predictable
- Predicting the direction of equity markets over short periods is nearly impossible due to market efficiency.
- However, volatility and asset correlations are more predictable and critical for managing portfolio risk.
