In certain circumstances, financial markets can affect the so-called fundamentals which they are supposed to reflect. When that happens, markets enter into a state of dynamic disequilibrium and behave quite differently from what would be considered normal by the theory of efficient markets. Such boom/bust sequences do not arise very often, but when they do, they can be very disruptive, exactly because they affect the fundamentals of the economy.

There is no point in being confident and having a small position.

I'll tell you what I'd do if it were up to me: I would establish a strictly controlled distribution network through which I would make most drugs, excluding the most dangerous ones like crack, legally available. Initially I would keep the prices low enough to destroy the drug trade. Once that objective was attained I would keep raising the prices, very much like the excise duty on cigarettes, but I would make an exception for registered addicts in order to discourage crime. I would use a portion of the income for prevention and treatment. And I would foster social opprobrium of drug use.

When you sell options, you get paid for assuming risk. That can be a profitable business, but it does not mix well with the risks inherent in a leveraged portfolio.

I called gold the ultimate bubble, which means it may go higher. But it’s certainly not safe and it’s not going to last forever.

My sense of insecurity keeps me alert, always ready to correct my errors.

An open society is a society which allows its members the greatest possible degree of freedom in pursuing their interests compatible with the interests of others.