Snippets from "When Markets Collide by Mohammed El Eriyan, CEO of PIMCO"

Parting thoughts to the individual investor:

 

1.  Investors are advised to keep following topics front and center on their radar screens…they speak directly to the abilitiy of the markets to minimize very wide technical fluctuation occasioned by the current asymmetry between

a.  The role of endogenous liquidity(refer book to what does endogenous liquidity according to the author means…or even better google it)

b.  Official monetary actions

c.  As well as the reliable openness of economies to developments elsewhere in the world.

2.  Do not forget initial conditions – like Harvard Management companies first entry into TIMBER as early as the 1980s(1988-89???), Apparently, HMC made a killing back then and soon, like bees, everyone followed into timber…returns for first movers are the most(investing or forseeing opportunities where nobody is looking).

3.  Major contributor to inequalities around the world has been technological progress which increases the premium on skills and antiquates relatively low skill inputs(need to update here?) thereby benefiting those who are already better off and displacing those that are already worse off.

4.  Prisoner Dilemma – (need to update this)

5.  3 Circuit Breakers

a.  Government or FED jumping in(making access to easy cash)

b.  SWF with money entering the markets

c.  Emerging Economies economic growth.

6.  PASCALS WAGER: If people believed that the probabilitiy of an earthquake in California was hight, they would NOT live in California. Yet, because the probability is non-zero and the consequences are severe, it makes sense to consider earthquake insurance, especially, if the market is providing it cheaply.

7.  Peter Dolan(from HMC?) 4 pronged principle in the life of a money manager

a.  Strive for excellence(arete)

b.  Hubris

c.  Recklesness(ate)

d.  Nemesis(retributive justice)

8.  The urgent/importance matrix – any ceo must need to pay attention to these(more in the book)

a.  1^st Quadrant: IMPORTANT AND URGENT

b.  2^nd Quadrant: Important NOT Urgent

c.  3^rd Quadrant: NOT Important NOT Urgent

d.  4^th Quadrant: Urgent NOT Important