ESG, Trump Tweet Trades, Volatility Follow Ups

The Money Angle from Weekly Moontower #32

• You will recognize ESG as the latest battleground between corporate axiology, morality, and law.
  • Takeaways from Matt Levine compartmentalizing your role as a corporate citizen from your role as a person. He channels realism and illuminates the downsides of mission driven companies. My notes here.
  • Cullen Roche’s pragmatic view on ESG investing. His pragmatic concerns are drawn from matters of axiology, morality, and law.
  • Aswath Damodaran’s explanation of shareholder vs stakeholder views of the corporation.
• The article dismantling the conspiracy theories of friends of Trump trading ahead of his announcements. At the end of the article I noticed one of the contributors as an anonymous blogger/trader KidDynamite. I have been following him for nearly a decade. His work is top-notch especially his accounting level forensics to debunk claims that precious metals prices are manipulated.
• Follow-ups from last week’s discussion about volatility’s toll on compounded returns:
  • My notes on a fun paper about how inept even educated people are about sizing wagers and how you can adapt the Kelly criterion for binary type bets.
  • A walkthrough of my simulation of investing in a 2 coin portfolio including the impact of rebalance and the influence of volatility on mean vs geometric returns.
  • An observation: A friend with some rental properties mentioned he does not aggressively raise his tenants’ rent. This incents the tenants to take good care of the place since they don’t want to lose the apartment. That means lower maintenance costs which is a second-order effect that offsets the first-order effect of keeping the headline rent a bit low. Between that and a very low vacancy rate, the returns of the rental properties are less volatile. And we all learned what volatility does to portfolios. An especially interesting bit to keep in mind since rental properties are usually levered.