What I read this week: August 16th, 2026

1. Scott Bessent Interview with Japanese Reporters

Technically this is an interview, not what I read, but I'm taking creative liberties. This is a great interview and props to @FinanceLancelot for finding and posting it. Here are the spark notes but you should definitely watch this.

• The reason the US intervened is because excess volatility and yen strength could hurt the Asia region and entire global economy (0:39).
• Bessent believes Abenomics was a great success [1:45].
• Core inflation remains under control [4:50]
• The inflation uptick in Japan was driven by a weak yen and increased energy prices
• Concerned about perception that Japanese economy is overheating and the JGP is an anchor for global interest rate [6:07]

 

2. Why the ‘dirt cheap’ yen is proving hard to fix

• The yen looks undervalued as analysts based off models like interest-rate differentials and even the price of katsu curry to figure
• Analysts expect the yen to fall further amid worries over Japan’s enormous debt load and lingering doubts about its economy’s ability to accelerate out of its decades of low growth and inflation
• The yen has given up half of the gains made from currency intervention

 

3. Anatomy of Active Portfolios

I might do a separate post on this. There's so much misinformation on portfolio optimization, how a L/S fund works at a pod shop vs a discretionary L/S like Bill Ackman. Even if you don't use these models, this is a must read for everyone - it fundamentally changes how you think about risk, returns, and exposure.

 

4. Stock-Picking Funds Are Performing as Poorly as Ever

Nothing against the WSJ but I don't love their stuff. The subtitle and opening paragraph kinda conflict with the article title. In the past decade, 13% of funds historically beat their benchmark and currently 27% of funds beat their benchmark then aren't funds doing better than ever? The title says the opposite.

 

Regardless, they're only talking about active mutual funds? Other than corporates that force employees to buy mutual funds, who's buying those? Not a meaningful takeaway here.

 

5. AI Is Helping Patients Solve Medical Mysteries

Another WSJ article but this one was good. It has a few examples where patients are using LLMs to diagnose rare disease. There's confirmation bias at play here, but I like to see real world articles reinforcing AI. The AI bears are going to miss another decade of great returns.

 

6. U.S. Stocks Rise, S&P 500 Closes at Record High

The Producer Price Index was unchanged in July from June levels, which lowered the odds of a September rate hike in Fed funds futures markets.