Life was cruel for a has-been Bollywood starlet. Her days were numbered. Add to the misery was marriage to a benami NRI businessman who was down to producing/directing trash short films. Now, meet a couple posing to be early-stage investors on a popular TV channel who are supposedly blessed with business acumen and foresight and are in tight with a few VCs. Together with the starlet, they plan a heist.
The FTX story has a bit of everything. Fraud, greed, lust, political connections, a relatively new concept in cryptocurrency, wealthy families, large financiers considered “masters of the universe” (we have them in India too!), suckers, Bahamas and multiple other locations of business subsidiaries. That’s not to mention the employees and average investors who’ve been caught up in the downfall. Also, the lawsuits and court drama which are no doubt to follow. Knowing America, books and movies on the subject will already be in the offing.
What comes to mind when you hear the words asset allocation? Equity, debt, cash, gold and real estate. Maybe art and commodities, if you are so inclined.
But there is much more to it. The money that we have is limited. Our time on this planet is limited. Our energy is limited. And how we efficiently allocate accordingly matters a great deal.
Let’s direct our attention to what Arunasset calls the “big-picture allocations”, that will ultimately define whether you find success in life, and not just the financial kind.
Yesterday, the Federal reserve announced another 0.75% point increase for the federal funds rate. This is the rate at which commercial banks borrow and lend their excess reserves to each other overnight. The increase in this rate is meant to help tame rising inflation; this increase however also has implications for the US federal governments borrowing costs and hence the nations fiscal picture.
There are measures of risk that have some degree of utility when it comes to framing investors’ expectations. But risk cannot be properly measured in a spreadsheet. When it comes to money and investing, we’re not always as rational as we think we are—which is why there’s a whole field of study that explains our sometimes strange behaviour.