Apr

8

I was thinking of designing a custom Consumer Price Index:

Oil
Copper
Wheat
Sugar

Anything important missing? or something that needs to be removed? My aim was to add something that is actually used everyday by ordinary people around the world.

Larry Williams asks:

Why? There are several very good ones already

https://doi.org/10.26509/frbc-ec-201002, Michael F. Bryan, and Brent H. Meyer

The Sticky Price Consumer Price Index (CPI) is calculated from a subset of goods and services included in the CPI that change price relatively infrequently. Because these goods and services change price relatively infrequently, they are thought to incorporate expectations about future inflation to a greater degree than prices that change on a more frequent basis. One possible explanation for sticky prices could be the costs firms incur when changing price.

Asindu Drileba responds:

Why a custom CPI? I honestly have no reason. It's more of a fishing expedition. The goal is to have a small list (under 10) of commodities and see if it produces some regularities.

It seems there are two kinds of commodities: Those that make people angry when the price goes up (life gets harder) like Oil, Sugar, Wheat. Those that make people happy (or indifferent), when the price goes up. Gold. I was thinking of making a small custom CPI based off 1). Which is why I excluded Gold. I was thinking of adding currencies to 1) like USD/EUR, USD/JPY & USD/CNY. Then maybe see what (this CPI) it may be good for.

Larry Williams contributes:

Add a booze stock.

Ed Kozun writes:

I agree in the past on the booze stock, but it sure seems like trends are changing and a lot of people are walking away from the sauce.

Larry Williams again:

Mary jane stock?

Zubin Al Genubi suggests:

Beer, wine, gas, hamburgers.

Ed Kozun ponders:

You’ve got my thinking about these indexes and what they are useful for and can you strip it down to essentials to think about pain points for “ordinary.”

1. any staple grain
2. residential energy per kWh.
3. cooking fuel(cost of making that grain into a meal)
4. Urban public transport ticket price.
5. Basic medicine. What cost does amoxicillin turn an infection into something that is not financially manageable.

Asindu Drileba continues:

Inflation usually doesn't affect wealthy people. (unless it's at levels of post WWI Germany, Mugabe's Zimbabwe & 1970s Cambodia). Petrol doubling in price may be annoying, but it won't change their behaviour.

As for the "others". Inflation causes 2 things. (these are untested suspicions)
Belt tightening. Spending on priorities first and less on luxuries. Will Live Nation stock be affected? Since less people go for concerts during periods of high inflation?
Will it still be worth it to buy the exact same iPhone as of last year that simply has a different name? Less visits to LVMH brands?

Red queen effects. People spending/borrowing more to stay in the same place. Payment processors collect more (since goods are the same, but transaction volume in $ goes up?)?

More leverage in markets (bigger "Open to High" & "Open to Low" ranges due to vol)? This may be more true in crypto where users are given up to 125x Leverage In some cases.

Apr

5

Video: Jennifer Shahade On The Hidden Cost of Thinking Too Far Ahead

Ordered the book written by a 2 times US female Chess player- it is about the dangers in thinking too far ahead (high IQ ppl like to do that and miss out the important turns when situations change…and keep getting too carried away). Good book for our special times IMO.

Thinking Sideways: How to Think Like a Chess Player and Win at Life

In Thinking Sideways, Shahade shows you don't have to be a great chess player to think more like a chess player. From building mind palaces to crafting decision trees, she reveals the most useful strategies from the ancient game that we can use in our daily lives. Drawing on examples from business, sports, and psychology, as well as her own experiences touring the world as a chess and poker player, Shahade transforms our understanding of what success looks like, and how to achieve it for ourselves.

Apr

3

In terms of trading, this makes me think of when rapid changes in market conditions push the trader's P&L into the red, and the trader gets tunnel vision and makes bad decisions.

Analysis of the helicopter crash by experienced pilot:

What REALLY Happened To Kobe Bryant's Helicopter?

The key issue is Continued VFR into IMC:

Continued VFR into IMC is when an aircraft operating under visual flight rules intentionally or unintentionally enters into instrument meteorological conditions. Flying an aircraft without visual reference to the ground can lead to a phenomenon known as spatial disorientation, which can cause the pilot to misperceive the angle, altitude, and speed at which the aircraft is traveling. This is considered a very serious safety hazard in general aviation. According to AOPA's Nall Report, approximately 4% of general aviation accidents are weather related, yet these accidents account for more than 25% of all fatalities.

Measures to reduce continued VFR into IMC accidents include improved preflight decision-making, enhanced weather awareness tools, simulator-based training and recurrent instrument practice for pilots who normally fly under VFR.

Nils Poertner responds:

Spot on. Good to slow down now anyway, walk slowly, speak softly, take good breaks. Have a dog and a cat nearby - they both remind me to not get too serious about things and slow down.

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