Date: March 5th, 2011
Cate: Systems

New beginnings

Due to a technical error, 8 months of blogging work has been lost.  Losses are best appreciated as opportunities to learn.  And so things begin anew.  Old posts under the “Designing better futures” project are here:  Financial specific posts on SeekingAlpha can be found here.Risk based systems thinking issues can be found on the Black Swan Group on Linkedin. Please note entry is restricted to risk professionals or educators and those managing +$100m in physical or fiscal assets.

Thinking in systems, the new title for this new blog, reflects work, I have been doing over the past 2 years, namely working on frameworks for applied systems thinking to complex financial and social problems.  Going forward I will be doing the following things.

  • Completing a book “The Long Game: thoughtful asset allocation” a methodology for allocating capital using multiple mental models a la Munger & Buffet.  The framework is based on systems thinking using, process, systems and evolution type metaphors of change and value creation.
  • Completion of a sketch based language for systems dynamics called graphorism. These allow for presenting complex concepts in simple graphical abstractions.  Think about competitive dynamics, margin growth, Gresham’s law, risk functions, critical instability, tightly coupled systems, normal accidents and other issues related to complex system dynamics.  The goal is that by creating a simplistic language for complexity dynamics it is easy to share and teach how complex systems work.  My own biases are of course financial applications and social domains, but the language and teaching method will lend itself to any form of complexity.  Like a handbook of Chinese radicals to discuss complex systems. It is more simple, fun and powerful than it sounds.
  • Getting back into capital management and allocation.  In 07-09, I beat the S&P 500 by 50% using the approaches mentioned above.  Since May 09 this performance has been bettered for friends and family  using a systems thinking approach to allocating capital and managing risk +%30 YoY.  These returns are likely unsustainable, but compelling.
  • Discussion and presentation of a new currency concept based on energy to improve stability and purchasing power

If there are any words of wisdom out there in regards to these projects, please share.  Blogging is digital narcissism, the only reason these thoughts are public is in the hopes of getting critical responses of the ideas put forth.

Welcome to thinking in systems.

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