Marvin’s Best Weekly Reads Aug 28th, 2022
Come what may, all bad fortune is to be conquered by endurance― Virgil
This is an important discussion. Taiwan will be a key flashpoint & the reality is both Taiwan & US are behind the ball here.
Especially Taiwan, They are under an existential threat from China, yet completely complacent. If they don't prepare, they are toast.
https://www.youtube.com/watch?v=7mYnoHTyuCw
2. James Bond is the man. Good to learn from the man (yes, I know he is not a real person but a character).
https://www.thegentlemansjournal.com/being-as-cool-as-james-bond
3. This is worth watching. Breakdown of present global economic order.
https://www.youtube.com/watch?v=kPZ2L6SGK1c
4. The De-globalization of the world but there will be lots of opportunity. At least half of the world will still thrive until the rest of the world comes back.
https://www.youtube.com/watch?v=tjYDcuOlK_M
5. I'm not Filipino but I'm looking forward to this movie.
https://www.gq.com/story/jo-koy-easter-sunday-interview
6. "Junger believed you needed more than action, you needed conviction. The will to kill and step over the corpse of your enemy, to head further into the battle. The men of his time didn’t lack men of action. Our time does. A great cowardice seizes good people from doing what’s right. This is where nature shines its ugly head. Just because you are on the side of “moral rightness” doesn’t mean you will prevail.
The west had its own hubris, made its own mistakes, and we must understand how those mistakes were made. Establish traditions to prevent those mistakes from happening again. We must be in the business of forming a new people. New barbarians who survive and thrive behind enemy lines. New barbarians who win the time comes will take power, who will have the Mandate of Heaven.
To do this, you must embrace and embody the virtues of nature. You must be strong, have DARING. Be driven by some powerful warrior religion. You must have Junger’s Will to kill and step over the bodies of your enemies deeper into the battle. Above all, be a man of action and conviction. This type of man will be foreign and deadly to the men of our time. They will be barbarians in every sense of the word."
https://resavager.substack.com/p/action-and-conviction-are-everything
7. Such a massive, insight dense interview. Big brain Balaji's view of the future (and present). The man is right more than wrong.
https://www.youtube.com/watch?v=0LOr2qBcpns&t=202s
8. This is a worthwhile conversation for macro investors. Dollar Milkshake theory.
https://www.youtube.com/watch?v=NnsqBbymayQ&t=0s
9. "Lots of down, flat and bridge rounds through the end of the year. So many startups raised because they could, at very high valuations based on competition or rev multiples. Right now cash is king and runways/burn are very important (in my professional VC voice).
Huge influx of experienced talent. As the FANG and other major public tech companies' stock falls, it will be very difficult to retain and hire new talent. A huge problem for late-stage, highly valued private tech startups as well — a major boon for early-stage that still has the BIG upside.
Just be cognizant that most of the funding news you’re reading now is generally delayed and not a good indicator of the current funding environment."
https://medium.com/@trace-cohen/the-current-state-of-2022-pre-seed-investing-862dc028d305
10. "He and Aronow were the creators of the Bored Ape Yacht Club, the internet’s hottest NFT project. Yuga Labs — the company through which they launched the Bored Ape Yacht Club in April 2021 — is currently valued at $4 billion.
The Bored Apes are a collection of 10,000 unique digital head-and-shoulders drawings of simians, each with a unique combination of traits, ranging from the common (“bored” mouth) to the ultra-rare (“solid gold” fur). Last October, a rare Ape sold at Sotheby’s for an eye-watering $3.4 million. That same month, Guy Oseary, a veteran talent manager who represents Madonna and U2, came on as a BAYC business partner.
Today, the Apes are everywhere in popular culture, from T-shirts sold at Old Navy to a VMA-nominated music video by Snoop Dogg and Eminem. Celebrities like Steph Curry, Justin Bieber, Gwyneth Paltrow, Post Malone, and Seth Green own them. Other high-profile holders include Jimmy Fallon and Paris Hilton, who in January engaged in an infamously cringe exchange about their Apes on The Tonight Show. (Solano and Aronow, who say they weren’t aware of the Fallon segment in advance, found it “very surreal.”)"
https://www.inputmag.com/features/bored-ape-yacht-club-greg-solano-wylie-aronow-profile
11. "The technology in Dune is made to enhance the man, not replace him.
This makes the men in Dune full of powerful vital force. There aren’t computers. Guns have been rendered obsolete by personal shields, forcing men to go back to using swords and knives again. You can’t survive in this world as a fatty. If you want glory, it must be won by the strength of your body and will.
That purpose being to make men who can survive and thrive in the time they’re in. It should be the means in which vital force is put back into the man.
Modernity has been a disaster for men. Violence is looked down upon. The skills and traditions men used to get to the top of the food chain have been lost. Mankind is a couple serious disasters from being knock back a couple cycles. Technology and progress have been put ahead of the excellence of man. They have become the new gods, the new faith, and it’s a faith that is misplaced. Technology is necessary, but don’t let it destroy what makes you great.
Technology is the realm of the regime. It’s used against us on a scale most don’t yet realize."
https://resavager.substack.com/p/the-vital-force-of-the-warrior-religion
12. This is pretty much one of the most insightful interviews and discussions I've heard with Balaji. It's a long one but it’s like all his interviews: very dense with insights. The man from the future.
https://www.youtube.com/watch?v=NlY8HICFiRs
13. "His axe firm in hand. He will fight the leviathan. He will not back down from the heroic struggle before our kind. His iron will won’t be dissuaded by the arguments of weak men who want only to crush his will to fight. Demoralization doesn’t work on him because he’s stayed true to the ancient rites.
The only way is the way Nature has deemed right and just. These pencil necked bookworms will talk about tolerance and progress, but the disciple of violence knows the truth. Force rules the world and only force can turn the wheel of mankind. The axe wielder is a breaker of wills and chains, for the free man is a warrior.
He exists on the frontier. In the threshold of civilization and barbarism. It is the frontier that gives him power. It is the frontier that powers his will to master, conquer, and destroy. Will you follow him?"
https://resavager.substack.com/p/the-axe-wielder-the-disciple-of-violence
14. One of the few great adventurer investors out there.
"From my value stock research around the globe, I found sub-Saharan Africa was the ONLY place you could then buy a large number of wonderful businesses at fair, or even cheap prices. The valuations nearly everywhere else in the world were distorted by ultra-low interest rates since the late 2000s. The air is coming out of those valuations a little bit now, but the relative values on the stocks we own at African Lions Fund are still far more attractive.
Even though the Fund is up over 40% since inception, earnings and dividend growth have largely kept pace with that for many stocks we own, and valuation multiples have not yet expanded across the board. It remains a fertile hunting ground."
https://ideabrunch.substack.com/p/idea-brunch-with-tim-staermose-of
15. "But here’s the thing: the less you’re personally invested in this system, the easier you’ll find it to endure any financial storm. Regardless of whether it originates from China or elsewhere.
In times of a downturn or crisis, cash, bonds, and stocks will usually be the first assets to feel the pinch. And while real estate remains generally more stable, even it isn’t immune to bubbles and busts. The 2008 housing crisis, and the weird state of the global property market right now are proof of this.
So for me, when times are turbulent, I always acquire more of the one stable asset that’s stood the test of time. The thing our civilisation always falls back on.
Gold and silver almost always endure financial flux better than other asset classes. At times when inflation has been above 3% (like right now), gold has returned an average of 15% per annum to those who hold it.
Of course, like with any asset class, it’s important not to place all your
bets on precious metals. But as a safeguard against some of the economic battles the world is currently taking part in, now might be the time for you to get your hands on some. Or, some more."
https://abundantia.substack.com/p/money-pox-has-returned
16. "Specialization can offer the perfect niche fit but also lead to a loss of individualism, limited experiences, a narrow mindset, and a misdirected focus on what really matters: doing the things you really love with simplicity and meaning towards personal growth, fulfillment, and extraordinary adventures. Just like kids do."
https://fewerbetterthings.substack.com/p/stuff-for-all-eventualities
17. Still very bullish on Mexico for the long run.
"Mexico has another huge advantage that its South American counterparts lack: close proximity to a major economic center. More than 75% of Mexico’s exports go to the U.S., its behemoth neighbor to the north. Just as Poland, Romania, and Turkey benefit from their proximity to Europe, Mexico is part of a continent-sized economic agglomeration. The economic integration of Mexico with the U.S. is helped by the existence of a free trade agreement, the USMCA (formerly NAFTA).
In other words, Mexico is a technically sophisticated and highly diversified manufacturing nation that makes and exports large volumes of complex, high-value-added goods. That is almost always the description of a rich, industrialized country, or at least a fast-growing near-rich country like Malaysia or Poland. And yet Mexico is a middle-income country that’s growing more like a natural resource exporter."
https://noahpinion.substack.com/p/mexico-a-development-puzzle
18. The story of constant reinvention, we can learn from this.
"What Gelman does—be it the Six Bells or The Wing or a political campaign or a TV show—has never mattered as much in drawing people’s interest as the fact of Gelman doing it. She is an astute reader of rooms, a generationally gifted flack, a connector of people, willful enough in her control that before I had made a single call for this piece, I got a call from a mutual friend telling me that Gelman heard that I was writing a story about her. She is a storytelling capitalist and a builder of worlds who understands what her customers want before they know they want it—Don Draper if he’d put himself in the ads.
She is pretty and rich, unfailingly pulled together, and friends with everyone you hate-watch on the internet. She is not a household name, but if the name Audrey Gelman does ring a bell, you have an opinion about her. She is highly conductive, radiating heat in the current era of guilty pleasure. “I can’t explain it,” she tells me when I ask her why she thinks people have such a strong reaction to her. “I guess I am just not for everyone.”
https://www.vanityfair.com/style/2022/07/audrey-gelman-six-bells-interview
19. This is what makes investing in frontier markets so exciting....and difficult.
"More generally, the inefficiencies of frontier markets, the slow dissemination of information, the frequency of “price insensitive” sellers, and a whole host of other ingredients, make for a heady cocktail of potentially huge profits."
20. Great discussion with Tim Staermose: investing in frontier markets.
https://www.youtube.com/watch?v=x__5bHsR9jA
21. "Yes, the United States supports Taiwan because of democracy, freedom and human rights; the biggest reason why that support may one day entail aircraft carriers is because of chips and TSMC.
Time will tell if the CHIPS Act achieves its intended goals; the final version did, as I hoped, explicitly limit investment by recipients in China, which is already leading chip makers to rethink their investments. That this is warping the chip market is, in fact, the point: the structure of technology drives inexorably towards the most economically efficient outcomes, but the ultimate end state will increasingly be a matter of politics."
https://stratechery.com/2022/political-chips
22. Educational story on one of the worlds best but relatively unknown investors: Martin Ebner.
"When asked for his #1 factor for success, Ebner would point to his ability to spot structural changes and ride them for years.
What does he mean by that?
"Everyone is focussed on short-term cyclical trends. Everyone is an 'expert' in doing that. However, the much more demanding task is to recognise large-scale structural changes before they happen. If you focus on that, you'll have less competition."
23. "Roditi is a man to my heart's content when it comes to taking a global view and travelling in order to research opportunities.
"He studies the world, searching for investment opportunities. … He travels endlessly to places like Japan, Russia, and India, which are not exactly luxury locations. …. On one day in June 2003, when he came by our offices, he was long Japanese banks, Russian equities, Treasury bonds, the euro, and Korean equities. …
He is a very curious, inquisitive man. He operates almost like a secret agent. … He isn't just content with the usual fare of company meetings and government officials in Moscow and St. Petersburg. Instead, because Russia is so much about oil, last year he went on a gruelling trip for a week to Siberia, visiting the Russian oil companies. With the Japanese banks he employs a number of unconventional sources and I know he has long-time contacts with the senior management of two of them. He goes to Tokyo probably four or five times a year."" (Hedgehogging)
During his active years, Roditi reportedly visited over 100 companies each year."
24. I'm a proponent of remote work but there are challenges with it. There are some advantages of being in the office for sure.
“It’s very hard to feel necessary when you’re physically disconnected,” the Canadian writer said.
“As we face the battle that all organizations are facing now in getting people back into the office, it’s really hard to explain this core psychological truth, which is we want you to have a feeling of belonging and to feel necessary.”
https://nypost.com/2022/08/05/malcolm-gladwell-slams-working-from-home/amp/
25. "A GP fundamentally needs to do eight things:
-Source companies to invest in.
-Pick companies which outperform.
-Win access to those companies.
-Value a company well and enter at an appropriate valuation
-Construct a portfolio of these companies sized to maximise LP reward and minimise LP risk.
-King-make their portfolio companies.
-Raise capital for subsequent funds.
-Sell positions to Return capital to LPs*
It is a rare VC who can do all eight exceptionally - h/t Sequoia. Most funds can do two or three fairly well and the rest only averagely. If a fund is among the best in the world at even two of these, that fund will likely yield top-decile performance."
https://jordsnel.substack.com/p/unbundling-one
26. I think we are all for diversity and inclusion but the wokes have taken this too far. This will probably disappear in recession as we all go to survival mode anyways. Woke is a luxury belief.
"At this point, most people have internalized a sense the tech industry is run by crazy people. In fact, the industry is run by cowards terrified of a very small fraction of their employees — a legitimately crazy subset of political activists with many friends in the activist (establishment) press. For the last couple years, we’ve spent a great deal of time criticizing tech leadership for ceding authority to the deranged excesses of cultural authoritarians.
But there’s a larger story we haven’t yet explored: what about the greater majority of tech workers, terrified of being targeted by their most unhinged colleagues, who just want to do their jobs?"
https://www.piratewires.com/p/hostile-environment-techs-dei-disaster
27. "Quick Step by Step: Assuming that you expect food prices to go up, you want to reduce the amount of pain by either buying up front or *investing* in the area with the most pricing power.
1) Farms: this is not investable for the majority. Unless you’re Bill Gates or an actual farmer this is going to be quite difficult so your first option is to purchase non-perishables up-front. Something we have recommended for quite a long time. And. Continue to recommend since it’s a sunk cost.
2) Distribution: gets dicey here. There is no guarantee the distribution company can immediately pass along all costs - food price increase + gas increase.
3) Food Processing: slightly better than a distributor. Processing food can pass along the costs as there are *less* input costs with swinging variables. Exception would be European plants that are seeing triple digit electrical price increases
4) Packaging/Logistics: a bit of a mix between 2 and 3. Depends on the company and what their input costs are (likely “alpha here”) and
5) Wholesale/Restaurants/Retail Here it gets pretty clear. Since you’re selling to the end-consumer you can pass along the pricing. With a catch. The catch is that people will be forced to look for substitute goods and save money by getting closer to the source - wholesalers vs. small grocery stores.
In short, the easy way to hedge your personal expense is to buy bulk up front and freeze or by investing in farms/large wholesalers. If you want to beat the food industry performance wise you have to look at 2, 3 and 4 for companies that are misunderstood."
https://bowtiedbull.substack.com/p/downstream-effects-of-rising-food
28. "What we want to focus on today is the utterly evil plan to expand the IRS's power by hiring 87,000 new agents to zerg rush the American people and shake them down for every penny they can find. Not only does the bill include hiring a new fleet of demon agents, but it plans to increase the number of tax audits throughout the country by 1.2 MILLION. A detestable number of audits that will increase costs on small businesses and middle class Americans and waste hundreds of millions of hours of time that could be spent... being productive throughout the economy.
These poeple will be armed with weapons and a mandate from the thieves within the Federal Government to make the lives of ordinary Americans - who are simply trying to mind their business and enjoy their limited time on this planet - a living hell.
What you're witnessing, freaks, is one of the tell-tale signs of a dying empire. When bread, circuses and entitlement programs begin to falter under the weight of their own stupidity it's time to send out the tax collectors to squeeze the populace dry of every penny possible and any joy that may be left lingering in their lives. It's like Joe Manchin and demonic Chuck Schumer opened up a history book and decided to plagarize the 4th and 5th century Roman playbook."
https://tftc.io/martys-bent/issue-1247-an-irs-zerg-rush-could-be-on-the-way
29. "When you’re out in the desert, what matters become clear. Cell service is shit or non-existent. There’s nothing other than SURVIVAL and the thrill of ADVENTURE on your mind.
Out there in the desert is LIFE. You don’t realize how much you have to supplement or medicate just to get through the modern world.
The desert unleashes POWER you didn’t know you had in you.
The desert sun gives you power. It raises testosterone. Your will for adventure overrides your desire to ESCAPE the modern world through wasteful and addicting distractions. All the shit you think you needed to get through the day — caffeine, supplements, whatever — you realize you don’t really need them. Their crutches to get you through your shit life. You also get to feel the danger our ancestors on the frontier faced out in the arid desert. The desert can kill you if you’re not prepared."
https://resavager.substack.com/p/reflections-from-the-desert
30. Slava Ukraini.
"The time when incremental support was sufficient has passed. Ukraine’s needs are known. The United States needs to lead an allied surge to provide a massive U.S. and allied heavy weaponry support package to Kyiv while the Ukrainian military is able to further degrade the Russian forces. The $1 billion defense aid package reportedly being prepared is a welcome step, as would be the decision to give Ukraine American fighter jets, but these tranches of support must come more quickly and more often.
The sooner we can help Ukraine defeat the Russian military, the sooner the killing of innocent Ukrainians will come to an end. The sooner that happens, the safer other parts of Europe at risk of Russian aggression will be. And then, perhaps, Putin’s grip on power might be challenged, which would be a welcome relief for many Russians who have suffered under his increasingly fascist rule.
It is up to Ukrainians to decide when or if to negotiate with Russia, but it is in our interest to strengthen their hand as much as possible right now. We should prepare for the possibility of escalation by the Russian side, not be paralyzed by fear of it. Thanks to the heroism of the Ukrainians, we have an opportunity to deal the Putin regime a serious, maybe even fatal, blow. It will not last long."
https://www.thebulwark.com/with-enough-help-ukraine-can-win
31. "Conclusion on IRS: Unless you’re entirely W-2, better be prepared for more oversight and more documentation for all of your audits. No one is going to waste time auditing someone with a $100,000 W-2 and $100,000 brokerage account. That has never been the case.
The goal is to go after two sections: 1) the fake transactions that are really payments - Venmo, PayPal, CashApp etc and 2) small business owners. If you are a mega corporation congrats! All of your potential competitors now have new expense line items to deal with as they will be forced to pay for their audits."
https://bowtiedbull.substack.com/p/87000-irs-agents-inflation-reduction
32. Yes, it is time for the West (US, CA & Western Europe) to start taking the threat of China seriously.
"Arguably, if Russia were the only challenge, such talk might not be necessary. The Ukraine War is far from won, but one can imagine how we might muddle through without disrupting Americans’ everyday lives. But the reality that China won’t easily be contained in Asia—and that’s what Pelosi’s trip underscored for me—means that this kind of pose is irresponsible. Time to start planning for a world that takes an invasion of Taiwan as a given.
Since the end of the Cold War, we have had it easy. We have been coasting on glib assumptions. It’s time to get serious."
https://wisdomofcrowds.live/we-need-to-get-serious-about-tawain
33. Important and fascinating discussion on media and culture in America.
https://www.youtube.com/watch?v=gbOwzImwAYc
34. "doesn’t mean newsletters have gone away. At all. Just some of the hype surrounding them. And in its place, there’s a more realistic attitude about the format and the business you can build around it: Newsletters, it turns out, are just like blogs and podcasts — they’re super simple for anyone to create. But turning them into something beyond a hobby — let alone turning them into a full-time job — requires talent and sustained effort.
“I don’t think it’s an easy path to fame and riches,” says Judd Legum, who has been writing his Popular Information newsletter since 2018. “But that was a thing that I never believed.”
35. "The Anatomy of a Digital Vending Machine
I’ve effectively replicated this business model using the Internet. I will do a lot of up-front work to identify a market need, built out a digital product or service, create an automated sales funnel to acquire new customers and setup an automated checkout and delivery system. After the product or service launches, the business will effectively run itself since all of the customer touch points happen using software and automated processes."
https://www.mattpaulson.com/2014/10/i-build-digital-vending-machines-for-a-living
36. Really enjoyed this interview. This one was a specifically good interview with Balaji Srinavasan. Well worth the almost 2 hour discussion.
https://www.youtube.com/watch?v=NEoxETtJ67Q
37. "Each “war on…” is an Industrial Complex that begins in the same romantic wishful tones a young couple contemplates their future family. The conception is finely crafted, precision engineered, made in the workshops of think tanks, PR agents, lobbyists and bureaucrats-in-waiting."
https://www.adamtownsend.me/how-to-win-the-war-on
38. "Fashion may seem ridiculous, ethereal, and unreliable to many in the markets. After all, most of the people on trading floors or in asset management are hard-nosed quantitative rationalists who don’t care much about fashion. But, fashion is art and artists detect trends before everybody else."
https://drpippa.substack.com/p/fashion-signals
39. Very important discussion. Fossils fuels have a place as transition to cleaner fuels. Nuclear is key as well.
We are much further away from Wind & Solar being reliable energy sources than people think and the environmental & academy demagogues claim.
https://www.youtube.com/watch?v=of9GGzeBth0
40. “The UAE is a big hole in the bucket,” Karen Greenaway, a former FBI agent, explained. “The movement of money — and we can’t see it — allows Russia to continue to run its economy and its war economy.”
"The Emirates is a global financial center that is built on freewheeling regulations. “Dubai basically started out as a pirate cove,” Sarah Chayes, author of the book Thieves of State: Why Corruption Threatens Global Security, said. Several dozen financial free zones and free trade zones provide havens for foreign money to avoid taxes, and the country’s loose regulations make it a particularly fruitful place for expats and foreign companies. There is no income tax; value-added tax was only introduced in 2018; and its first corporate tax regime is set for 2023.
Dubai has become home to illicit finance and other valuables like gold, art, and, more recently, crypto. Chayes recalled seeing what appeared to be heavy suitcases full of cash arriving in the UAE’s airport from Afghanistan when she was working as an adviser to the Pentagon, and later learned that millions in cash was coming into the UAE from Afghanistan per year.
It’s a center for American and international companies, often their base and port of call for Middle East business. There’s also the golden visa program, where luxury property buyers can get extended Emirati residence permits (which are short of impossible for international laborers to receive)."
41. "Every manager in the market today was emerging at one point, and behemoths like a16z just formed thirteen years ago.
Getting into a fund with a firm early in life is often critical to reserve a seat at the table in later funds. Firms such as Forerunner Ventures, Craft Ventures, IA Ventures, Ribbit Capital, Initialized Capital, and Felicis Ventures are some of the most sought-after funds in the world today and are incredibly access constrained given the breakout performance they've experienced.
While it's clear that emerging managers provide an enormous opportunity for outsized returns, a higher probability of co-invest, and the chance to get on the ground floor, many LPs struggle with this part of the market, given the hundreds of new managers that have formed each year over the last half-decade. Emerging Managers have a higher degree of performance volatility, so discovering and picking the right firms is paramount in achieving the outsized performance that is possible.
Picking is also tricky as many emerging managers have limited or no identifiable track records."
https://ventureunlocked.substack.com/p/why-emerging-managers-are-a-critical
42. "I guess remembering back to Erdogan over the past 20 years, it’s all about the now, and he always assumes that something will break to his advantage in the future. Do everything to stay in power now, and let’s worry about next year, next year. That’s terrible for business, longer term growth, etc, but it has kept him in power for 20 years.
Maybe all this will catch up with him in 2023. I seem to think the catch up will be either he loses the election, or the mother of all systemic crises will happen in Turkey post election, assuming an Erdogan win.
Bottom line, current policy settings are just not sustainable - the question for us all has been the time frame of sustainability, is it 1 month or 1 year? But it is certainly not 2-3 years, that’s for sure."
https://timothyash.substack.com/p/expectation-around-turkey
43. "For Ukraine to win this war, its not all going to be about guns, but about keeping the economy, its banks and financial system working. So far the Ukrainians have done a remarkable job in incredibly difficult circumstances, but the West is at risks of failing them unless it fast tracks disbursements to help fund the Ukrainian state. And now."
https://timothyash.substack.com/p/the-west-is-short-changing-ukraine
44. "Cheryl says she’s always looking for headliner-potential in any artist she signs. Strategies may differ artist to artist, but the goal is always the same: build longevity.
That comes from the small venue performances. It also comes from giving artists resources to amplify their live performances — adding performance coaches or production people to the team. Cheryl wants her artists to eventually sell their own shows, not just open for others or rely on festivals.
“If you’ve reached a point when you can only play festivals, you’ve hit a ceiling.”
https://trapital.co/2022/08/12/post-malones-agent-breaks-down-strategy-behind-his-success