Radicals for Capitalism - Part III
The Identity of Capital Markets
On July 26, 2025, Forbes published a review written by John Tamny of my book, The Moneyball Method. It was also published on July 18, 2025, at RealClearMarkets.com. This brief essay will focus on a quote from their twenty-fifth paragraph:
Better to let the markets worry for you, rather than worry about what can’t be controlled. Which means there’s no certain, individual stock-picking style that’s necessarily going to work. That’s particularly true if you have a destination that you’re trying to reach.
Like the laws of nature, markets are indifferent to your health, prosperity and happiness, “Better to let the markets work for you” offers serenity. To be indifferent to “what can’t be controlled” takes wisdom. And to define and plan “a destination that you’re trying to reach” builds courage. Sound familiar?
Moreover, the subtitle to the first essay in this series was “Risk Capacity is an Asset.” As discussed, it must “anticipate outcomes at either extreme of the bell curve.” The second essay’s subtitle was “Independence is a Virtue” and in it the novelist and philosopher Ayn Rand was quoted: “Redeem your mind from the hockshops of authority.” To do that also takes wisdom and courage. But what do “hockshops of authority” and “outcomes at either end of the bell curve” have to do with each other? Everything.
It is the State’s regulatory hockshops that create all recession and inflation, but here I will focus on the market strategy hockshops that publish “forward-looking projections” for their capital market assumptions about future market performance.
With maximum brevity, those are the expected rate of return for the major stock, bond and alternative categories, their individual standard deviations (volatility risk), and their correlation coefficients (relative price movements) among each other. These projections are always limited to the near-term, the rate of return is always lower than the historical median return, and correlation might be ignored. In essence, they are predictions - and they are arbitrary.
But to objective investors, the quantitative metrics for each asset class are their defining attributes – and in combination, they are their identity! Furthermore, their most accurate definitions are the long-term historical data sets. And because the law of causality is “identity” in action, the long-term historical data is the most reliable way to anticipate capital market behavior.
This is particularly useful in the environment of uncertainty that defines markets. Hence, The Moneyball Method. To degrade them is to degrade capitalism. And to learn more about becoming a radical for capitalism, please click the link below:
https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/