Austrian Investing I: The Eagle and the Swan
Exploiting the Distortion with Misesian Tools
Having followed the vast, varied, and often ancient lineage of the roundabout strategy to its central economic role in the orthodoxy of the Austrian School, we are now prepared to apply the principles of the roundabout—wuwei, shi, umweg—to capitalistic investing. We have reached the end, of sorts, a practical and tangible conclusion of following our well-developed roundabout path in the effective deployment of capital. We have indeed turned a corner in The Dao of Capital, as we begin here a new discussion of an approach I call Austrian Investing.
My intention in this chapter, far more important than any action step and exceedingly more useful, is to affirm a way of thinking as introduced in the preceding chapters; to plainly recognize when distortion exists, and to assess one’s attitude—and appetite—when it comes to that distortion. We ask ourselves: How are we exposed to malinvestment? Are we, for instance, investing in what is most manipulated by, whose profitability is most dependent upon, artificially low interest rates? Beyond avoiding it, can we perhaps even benefit from it?
If this book achieves nothing else, it would more than hit its mark if readers came away with greater awareness of such distortions in the economy and the markets, which magnify the human tendency toward the direct reward of li, and acquired a deeper appreciation for the arduous path of shi. The thought ...