This entry — our first — provides a brief overview of what this Web site is about and hopes to become, and the blog it wraps around.

What we seek is simple enough to describe: a unifying theory of global-macro investment management; a system for managing an “any-asset-class, anywhere” approach that deprives itself of the consideration of no opportunity but, more — seeks to quantify expected alpha in terms of cyclical time and seasonality, asset class, asset size and style, derivative and anecdotal considerations — and geography; and, finally, a practical system for applying such a strategy to trading decisions.

Should be no problem (read: should be incomprehensibly difficult to achieve).

To elaborate, or maybe to simplify: We seek to develop a practical approach — grounded in macroeconomic theory, fundamental asset valuation, and quantitative research — for managing global assets throughout the course of the business cycle. (You can read a little about our starting philosophy here: business-cycle introduction.) To the extent that we succeed at all, our progress will be arduous, unsure, frustrating, and described here even as we go. Hopefully, our progress will involve our users. The end result, if we reach it, would be a practical strategy for generating differentiated, actionable asset-allocation decisions (or recommendations) with a global, multi-strategy mandate.

We don’t know if we’ll ever be “done,” if we’ll be able to relax and put the cork on the bottle — if we will succeed in developing the model (and refining the theory supporting it) to such an extent that no further development would be probative: a framework for achieving competitive, even superior, risk-adjusted returns globally and in different market conditions. And if we ever do succeed, we doubt we’ll know it with anything like certainty, because there is always another set of market conditions; another way of incorporating anecdotal evidence into one’s framework; another development in finance (behavioral, quantitative) that may be worthy of consideration; and on and on. There is always another kind of market.

Slow to Finish, Quick to Start

Here at the outset, we are undecided as to whether our primary form of interaction with users will be (i) the publication of essays and articles (see the Navigation bar at left for some initial examples), (ii) something more akin to frequent, casual commentary (this blog), or (iii) the operation and mediation of discussion forums, the sharing of files and statistical models, etc. The site will support all of these modes — we just don’t know in what mix. The concept of Weblogs is hogging the spotlight right now, but we have no plans to chatter in keystrokes all or even every day. And we don’t have “tick fever.”

Don’t Bore Me with Facts

Many blogs — be they dedicated to politics, state law, personal issues, or lawn care or, like this one, certain topics in finance — are rants, or sticks with which to beat the writer’s real or imagined enemies; or public diaries. Some are commercials. It is almost enough to turn one away from the form. There are serious blogs, too; though even the serious can have a hobby and we envision Stracia’s blog component as a hobby horse. (It is no accident that we are posting this initial commentary on a Saturday morning.)

Indeed, we launch this effort with some skepticism, if not disdain, for the medium itself. One could look at the blogging phenomenon as a recent example of, and a shift in, the kind of rent-seeking behavior that has characterized the Internet since there was first a Web-based distribution model to speak of. Then — in the mid-1990s — such behavior passed like a kidney stone from the core of the capital markets (venture-capital firms, institutional investors) to the periphery (mom-and-pop daytraders, Mr. and Mrs. America) to the very edge, where the greatest fool stood, pantless.

Rent-seeking — that is, the ability to profit from a business model or other systematic condition (whether real or artificial) without creating real, economic value, is with us online still. Bloggers, at least to some extent, appear to benefit more from the distribution model of the Web than as a result of economic-value creation. And that is fine, or not; in any case, it is a real phenomenon and also (like the behavior of the earlier, larger, more sophisticated players) a temporary one. As before, it is hard to know exactly what will blow the fuse on the lightbox of this smaller party; or maybe the blogging trend will just fade from the spotlight.

As for this blog, it, too, is temporary — we will keep it up until we’re bored or frustrated or just too busy to continue. There’s something to be said for knowing when you’re out of time. (If we ever introduce subscription-based services for private members, we will, of course, establish quality and going-concern parameters and practices.) In the meantime, we will try to make it serve its intended purpose of providing a forum for the discussion of global-macro investing, and having fun with it.

What to Leave Out, and What to Put In

To a large extent, we think that means not stretching ourselves too thin — an obvious danger when tackling a subject as vast and hairy as global-macro investing. Because despite our flagrant use of the royal “we,” there are really just enough of us to maintain this Web site, write the occasional entry, and clean up after our butler, Baines.

The “global” in global macro does not imply that we can, or should, be everywhere at once. Posts this week and next will discuss at greater length what Stracia is and, as importantly, what it is not: We are not interested in commenting on every price move in every asset category around the world as it happens. And we are not journalists: We are appear to develop an actionable asset-allocation framework, not to report events.

We will expand the site over time, adding not only essays and exhibits of topical or more enduring interest, but rolling out additional features to help our users navigate the world of global-macro investing. You are walking around our house as we renovate. So come in, and please excuse Baines’ mess. ♦