Marvin’s Best Weekly Reads April 9th, 2023
“Life is what happens when you're busy making other plans.” -John Lennon
"The US dollar for all its problems is still the World’s Reserve Currency. The United States still owns SWIFT. And most of global trade is still denominated in USD. However, this does signal the beginnings of detrimental ambitions and actions.
While American Nationalists will say these are only small trades, or insignificant quantities; while true, they signal a shifting in the winds.
It is akin to the philosophical/economic idea known as the problem of pennies: A penny is in of itself worthless and useless by itself; but with enough of them they become a kings ransom.
These actions may seem small and trifle. But with enough of them they add up to something much larger. With so many of these deals being done so rapidly, it is clear the World believes that America is not only unstable, but can be challenged openly.
In fact America and the West keep tripping over their own feet when it comes to innovation and new technologies, a prime example being Crypto."
https://mercurial.substack.com/p/financial-fight
2. This is a good global macro take on what’s happening these days. USD is still fine as Global reserve currency unlike the nutty takes out there this week. BRICS are over-rated.
https://www.youtube.com/watch?v=PzsvdXbSqpA
3. "The more entrepreneurs spend time with other entrepreneurs, the greater the chance they find a match for a future startup. Entrepreneurs combining on new startups is a strong signal this works and an integral part of startup communities."
https://davidcummings.org/2023/04/01/entrepreneurs-combining-on-new-startups
4. This is gold. And something many growth stage startups are learning the hard way now.
"Either a high-velocity, low-ACV or high-ACV, low-velocity sales motion can work as long as all the pieces – including the type of customer, lead gen strategies, and sales processes – are aligned. Go-to-market strategies that take a long time to close small deals are prohibitive.
If you’re in the losing quadrant, you must determine whether tactical improvements (getting better at sales, changing pricing, or improving efficiency) can solve your problem or if your situation requires a pivot.
If things are trending in the right direction, keep going. If you’re in the losing quadrant and don’t see progress, it’s time for a deeper discussion about your product-market fit."
https://sacks.substack.com/p/the-difficulty-ratio
5. What a brave and honorable man. We need more people like this in the world these days. It was a different time back then It seems.
https://www.youtube.com/watch?v=uEIOv8mVeHQ
6. "Balaji’s specific bet might be more reasonable if the U.S. were an emerging market (EM) like Argentina. But because U.S. is a global reserve currency, it can get away with a lot of challenges that an EM cannot.
Central to Balaji’s view is that the U.S. will lose global reserve currency status and thus act like any other country facing a currency crisis. He believes that the money fleeing banks will go to BTC or RMB instead of staying within the country. He concedes that if you don’t believe this is possible, his case for massive inflation won’t make as much sense.
So the real question is how much longer can the U.S. be the global reserve currency (GRC), and what needs to be true for America to lose our GRC status. After all, dollars were one 40% of global GDP, now they’re closer to ~15-20%, so dropping even further is not crazy.
It’s possible everything depends on that. Because that’s what Balaji’s best predictive skill is — realizing when an assumption we took for granted has now changed, and extrapolating second-order effects out from that change. Let’s hope, as he does, that he isn’t right this time."
https://eriktorenberg.substack.com/p/examining-balajis-bet
7. "Picking the right company has always been critical, but it's more important now than ever before. Unlike in 2021 when the entire tech sector was thriving, the 2023 job market is split between companies that will never meet their inflated valuations and promising companies with discounted stock prices."
https://junglegym.substack.com/p/navigate-your-next-negotiation-carefully
8. What a cool story.
“I have a really wide variety of interests; it’s so odd,” she said with a laugh. “I love to learn. I’ve gotten into so many fun things in my life.”
Today, Schroeder sees the remnants of her patents everywhere. Department stores and toy shops selling brands like RoseArt and Crayola are lined with glow-in-the dark drawing tools and toys inspired by Schroeder’s original phosphorescent invention.
And to her, that’s all right. Natural, even, for the life cycle of inventions.
“It doesn’t have my name on it now,” Schroeder said. “It’s not about me. It’s about what’s out there now for people and knowing I’ve touched them.”
https://blog.hubspot.com/the-hustle/youngest-female-inventor
9. Important discussion on the future of war and lessons from the Russian invasion of Ukraine.
https://www.youtube.com/watch?v=tSKhQBcfGF0
10. This is a very complacent view in my opinion. Taiwan and USA needs to ramp up defenses ASAP.
"Milley said Taiwan needs air defense, anti-ship cruise missiles, and anti-ship mines. But he said the island itself, its population of 23 million—including 170,000 active duty military and 1-to-2 million reserves,—and China’s lack of experience make a takeover unlikely. “It favors the defense. It would be a very difficult island to capture,” he said.
“For the Chinese to conduct an amphibious and airborne operation to seize that island—to actually seize it?—That's a really difficult operation. But Xi put the challenge out there, and we'll see where it goes.”
https://www.defenseone.com/threats/2023/03/lower-rhetoric-china-says-milley/384693/
11. Interesting concept. New Fertile Crescent. It's a bit more of a mercenary view than I like but for the adventurer investor this seems promising.
https://mailchi.mp/be29f68a4286/investing-in-the-new-fertile-crescent?e=123a1c25c4
12. This is one situation where the USA is drastically under-reacting (versus over-reacting). The true threat of China, very scary stuff.
Worth watching: I learned alot and am even more worried now. Hope people pay attention here.
https://www.youtube.com/watch?v=Z5wpzKvPc3U
13. Libertarian stance by these folks which I dislike. But I do agree commodities & gold will be good investments.
The elites of West have screwed up due to complacency, arrogance, greed and incompetence allowed BRICS to rise & through bad moves in global monetary war.
https://www.youtube.com/watch?v=CHPNgl1tXKE
14. Lots of good nuggets here on the geopolitical scene from Zeihan.
https://www.youtube.com/watch?v=MiStIGhLJm8
15. Some good personal finance advice I wish I heeded earlier. Worth reading the whole thing twice.
"The second major conclusion is that lifestyle inflation is an absolute killer. You will be poor forever if you spend your annual raise on “new stuff” since your savings from the prior year will mean nothing.
Put some math behind it. If you’re earning $100,000 and saving $20,000. That’s 20% and you’re doing just fine.
You go and get a raise to $150,000. And. You continue to save $20,000. That is 13.3% and now you’re saving *LESS* than you were last year on a percentage basis.
In short, you got a raise but you’ve made it harder to keep up with your lifestyle to the tune of ~8 years"
"You can either start building an income now to offset your living expenses or play the 1/100 odds you move up quickly in the corporate game to a 1% income for 10+ years."
https://bowtiedbull.substack.com/p/personal-finance-planning-and-avoiding
16. "This significant uplift in mobility and survivability support to the Ukrainian army tells us that not only have battlefield conditions changed since the beginning of the war, but that the coming offensives by the Ukrainians will look different to those that have been conducted north of Kyiv, in Kharkiv and in Kherson in 2022.
While these previous Ukrainian offensives may offer some insights into the fight ahead, there are many reasons to expect that the coming months may see an evolved approach by the Ukrainians.
The Ukrainian Offensive Will Be Different
The first reason for this is that the Ukrainians are facing a different Russian Army now than compared to 2022. Not only does it have a different commander in General Gerasimov, but there is a different balance of professional and mobilised troops.
While much ink has been spilled about how mobilised troops are better at defensive than offensive operations, the reality is that the coordination of a scheme of defence over several hundred kilometres of front line is still a complex and fraught undertaking. It is certainly a more substantial undertaking than just plopping troops in trenches with anti tank weapons!"
https://mickryan.substack.com/p/the-coming-fight-will-be-different
17. "The answer is that AI is going to spawn future professions and skillsets specifically related to the field of “prompt engineering”. In many ways, prompt engineering will become the only profession as AI proliferates.
Think of prompt engineering as the ability to understand real world problems and then properly frame and convey the problems to an AI to help solve (ex: using ChatGPT to research and then draft an essay on a topic for a target audience or Copilot to help write lines of code for an app your building).
In the near future (I’m talking very near), your ability to understand how to use AI tools and apply that knowledge specifically to your job/industry will add significant value your employer or client.
Prompt engineering will be a clear value driving differentiator between those that have the skill and those that do not."
https://www.thesovereignindividualweekly.com/p/job-future
18. "Make no mistake: these are historically unprecedented quit-rates from Japan’s best & brightest. And, in my view, when the next generation elite begin to move, something very fundamental is changing.
Unfortunately it is, to my knowledge, not possible to ascertain where the quitters go due to personal privacy protection rules. However, anecdotal evidence suggests that a fair number do not move on to large prestigious companies but actually join start-ups."
https://japanoptimist.substack.com/p/japan-reality-check-6-elite-on-the
19. Good news: Russia has coalesced most of Europe against them. Deservedly so.
https://www.youtube.com/watch?v=qEe6yySL6ps
20. Mimetic desire drives everything. This is a great discussion.
https://www.youtube.com/watch?v=vpA5k1c4Ey4
21. I enjoy these little geopolitical snapshots from Zeihan.
https://www.youtube.com/watch?v=leyoYtunqPQ
22. Good advice for aspiring VCs.
"To be clear, venture is one of the best jobs in the world, and it’s an extremely privileged opportunity that I’m grateful for each day. But you require both luck and a very long-term mindset to do it well. Most other financial services businesses (hedge funds, traditional private equity, etc.) are far more lucrative if money is your sole goal.
If you want to build something special, expect to do it for over 20 years"
https://writing.erictarczynski.com/p/five-lessons-building-venture-fund
23. "This financial crisis will end the short-term boom-bust cycle and, more importantly, end the long-term boom-bust cycle with catastrophic consequences. This is the event you should be preparing for.
Here’s why I think this.
First, right now, banks can park their cash at the Federal Reserve risk-free at nearly a 5% yield, which reduces the incentive for them to approve loans heading into a period of financial uncertainty.
The net result is that we’re likely to see credit rationing as banks improve their reserve ratios by pulling back on loans. This will decrease economic activity.
Second, this is accelerating the end of the short-term boom-bust cycle as credit availability dries up and commercial banks are less willing to provide loans.
Credit and loan deterioration are early warning indicators of a recession."
https://grayzoneresearch.substack.com/p/tremors-before-an-earthquake-on-the
24. "Every meeting that I had with a VC informed not only my perspective of that individual, but of the firm they worked for. It informed the likelihood that I re-engaged with their firm for subsequent rounds. It informed what I told other founders when they asked about my experiences fundraising.
A decade later, those experiences — both good and bad — informed how I chose to enter the world of venture capital.
Most significantly, they informed the way that I try to show up for the founders each and every day."
https://chrisneumann.com/blog/founders-never-forget
25. "But important context herein is that key Western IMF shareholders see the absolute strategic necessity for Ukraine to be financed through this war and the early part of reconstruction assuming a base case of the war petering out in the first half of 2024. So with that context the IMF team were tasked with coming up with numbers which seemed coherent under a certain set of assumptions. They have.
The macro forecasts are fingers in the air but that’s fine as those same key Western shareholders have provided the IMF with sufficient financing assurances that they will continue to write cheques for Ukraine to enable it to win this war almost whatever the macro outturn ends up as being."
https://timothyash.substack.com/p/ukraine-gets-a-new-imf-programme
26. I love these discussions on global macro economics and the VC side. It’s really good this week.