Suppose you didn't know anything. How would you build a portfolio? If I was to say to you, here's four assets, I'm not gonna tell you anything about them, I'm not gonna tell you what they're expected returns are. I'm not going to tell you what their volatility is, what their risk is. I'm not going to tell you how they correlate with one another. How do you put together that portfolio?

The answer is you just say, well 25% in each one. So if you don't know anything, that's your starting point. So the cockroach portfolio kind of takes that approach to waiting. What are the asset classes? Well we don't want to take any bets on inflation versus deflation. So we have a blend of nominal and real assets. The normal assets of cash and government bonds are actually bonds, corporate credit as well. The real assets are gold and equities.

We also don't want to take a view on duration. So we've got zero duration, both the gold and the cash and we've got long duration, which are the bonds and the equities. And so we've got every single possible outcome covered with minimal information content. In other words, it's a know nothing portfolio.

What you find is when you run this portfolio, you rebalance each year, you have a higher Sharpe ratio than the 60/40, higher sharp ratio than an all equity portfolio. It's not done as well as equities during this bull market, but absolutely trounced equities and bonds in the 1970s. It's robust to different regimes and like the cockroach is not very clever, but it's incredibly robust. It's incredibly successful.

The two word description of US politics is "democracy, checks-and-balances", then the two word description of Chinese politics is "oligarchy, patrons-and-clients". If this seems exotic, it shouldn’t: it’s not much different from how the US fills unelected posts like "ambassador" and "White House staffer".

With the incredible economic rise of China over the past few decades, it’s easy to fall into the trap of thinking their leadership must be geniuses, or at least have managed something that merely democratic countries never could.

One alternative to that narrative … is that Deng Xiaoping was a genius, Jiang and Hu were pretty impressive too, and Xi hasn’t added anything to their work and may have subtracted from it. I find this pretty plausible.

Just because you can't study it, doesn't mean it's not the thing that's driving the system.

...if I want to understand any complex phenotype, like how do you get antibiotic resistance or how do you get smart people or how do you get a criminal justice system or how do you get a championship baseball team? The digital part of that information is a key part. But it ain't the only part. And oftentimes it isn't the most meaningful part.