Marvin’s Best Weekly Reads August 13th, 2023
“Things work out best for those who make the best of how things work out.” —John Wooden
"The broader point here is - in the world of foundation models, market leadership that is based on technical leadership could be fragile. Be careful investing against that. It makes me wonder if OpenAI should be a short. The company that leads now may have too much stake in the status quo to see the next thing. Time will tell."
https://investinginai.substack.com/p/the-biggest-mistake-ai-investors
2. "Basically, this is the whole list. If people have jobs, inflation is low, and real incomes are rising, the economy is good. That doesn’t mean people necessarily realize it’s good — social strife, or partisan polarization, or lingering pessimism from past disasters may cause people to be pessimistic about the economy even in the face of great data, a phenomenon some refer to as a “vibecession”.
But while I acknowledge that people’s feelings are important and that there are other things that matter besides the economy, when I’m analyzing how well the macroeconomy is actually performing, I can’t go on vibes.
And when we look at the objective numbers, they are great. First of all, there’s the employment situation. Some indicators of employment, like labor-force participation, look bad because we’re in the middle of the great Baby Boom retirement. That’s why you generally shouldn’t use measures of the labor force that don’t adjust for age! When we do adjust for age, we find that the U.S. job market is now the best that it’s been in recorded history."
https://www.noahpinion.blog/p/if-this-is-a-bad-economy-please-tell
3. "In short, if you are financially set you never have to sell as you likely work. If you are still in wealth building mode you should risk manage by selling at least half of an asset that doubles in value.
If you recently sold a business and have no real income, we suggest working as a consultant/time for money exchange *temporarily* so you don’t go cash flow negative.
Do something. Anything."
https://bowtiedbull.io/p/july-portfolio-update-some-changes
4. "Thriving in a Disruptive Environment
So, what do we do? How do we thrive during this transition, despite the dangers? The best strategy is resilience. Resilience is a strategy that safeguards individuals, families, and communities against systemic disruptions and failures — from extended blackouts to food shortages to temporary social breakdowns.
The basic philosophy of resilience is;
Connect, but connect on your own terms.
In practice, this means:
-Connect to the system (grid, retail, etc.) to maximize opportunity, wealth, and convenience.
-Be prepared for disconnection so that when it suddenly happens, you aren’t negatively impacted. This is done by making preparations (backup generator, wood stove, garden, fruit trees, stocked pantry, etc.) and skills (how to grow food, generate power, capture water, repair cars/equipment, etc.).
-Use your preparation and skills as an asset if the disruption persists. Help others and provide shelter. Sell excess to the community. Form groups to teach and provide mutual support.
Now, let’s apply resilience to disruptive AI-fueled technological change (with some examples).
-Connect. Use beneficial AI services to improve your productivity, wealth, and happiness. Learn how to use it.
-Be prepared to disconnect from abusive or disruptive AI services."
https://johnrobb.substack.com/p/technological-resilience
5. Interesting implications for France & their geopolitical focus. ie. much more against Russia it seems either way.
https://www.youtube.com/watch?v=Y6Nu62pLodg
6. What a self inflicted disaster for the EU & especially Germany. Energy dependent on Russia from stupid idiotic virtue signaling energy policy. (ie. no Nuclear power). And as always the regular people pay.
"Moreover, the loss of even a small percentage of supply has the potential to raise prices across the continent, given the tightness of global gas markets. In Germany, for instance, the economy minister has hinted that the country will be forced to significantly wind down its industrial activities if the gas agreement isn’t extended at the end of the year. For a country — and indeed a continent — already struggling with creeping deindustrialisation, the consequences could be devastating.
This is especially worrying if we consider that, barring the same higher-than-average temperatures as last year, this winter Europe will have a natural gas deficit of at least 60 billion cubic meters. In other words, it’s not inconceivable that another gas crisis is around the corner — and it might be even worse than last year’s. As the Ukraine war drags on, even the few safeguards put in place are coming undone. Instead of being diluted by diplomacy, the repercussions of this conflict have merely evolved."
https://unherd.com/2023/07/the-ukraine-war-is-about-to-get-worse/
7. Love the title: Designing an Anti-Fragile career. Incredibly valuable. Worth watching.
https://www.youtube.com/watch?v=WAI2y1_QTTM
8. This is the challenge with being a pioneer and trying to scale like crazy. Lots to learn from the Mr Beast Burgers saga. Control and Quality matters.
9. Always recommend listening to Codie. She is a fountain of business knowledge.
https://www.youtube.com/watch?v=ppyx_JvG6do
10. This is worth watching. Defense requires ammo.
This will help you understand what's happening with the weapons supply chain side in the USA.
https://www.youtube.com/watch?v=w6CusO9BntE
11. "This acquisition is a bet that the company can be run more efficiently. If we are in the nadir of multiple expansion & acquirors expect improved future results, the M&A market should re-invigorate."
https://tomtunguz.com/newr_acquisition/
12. "As with all wars, particularly ones of this scale and intensity, there remains an abundance of uncertainty. The degree to which both sides are having their combat power – intellectual, moral and physical – degraded in the Ukrainian 2023 offensives has some data (such as vehicle losses, ground taken or lost) but overall it is difficult to come to definitive conclusions at this point.
That said, the Ukrainians probably have the operational initiative at the moment and have secured the tactical initiative in some parts of the eastern and southern fronts. However, the Russian mini-offensive in northern Luhansk remains an operational risk for the Ukrainians. Even if the Russians do not gain significant territory, it offers the Russians the ability to draw in Ukrainian forces needed in the south, and for Putin to message his people about Russia being ‘successful’ on the battlefield.
But there remains a tough and long road ahead. As has been pointed out here and in multiple articles, the Ukrainians are seeking to advance against an enemy that has prepared well for a large-scale defensive campaign. Challenges in integrating larger scale combined arms operations have also been a challenge in some areas for the Ukrainians. And slow decision-making last year is now having an impact as well."
https://mickryan.substack.com/p/the-state-of-the-ukrainian-2023-campaign
13. "The big picture concept here (at least on this side) is that you want to maximize your potential and *limit regrets*. The chances that your potential is being maximized by taking a 45 minute commute each way to stare at a computer screen with florescent lights for 50 hours a week is unlikely. That looks a lot more like prison/hospital beds than anything else.
Before moving on from that point, we’re well aware you have to start somewhere. Unless you were born into some extremely lucky genetics (pro athlete, sudden pop singer, movie star etc.), you’re going to have a gutter feeling experience in your early 20s.
You’re energetic, full of hope and of course broke.
Assuming you agree with that general premise, the key is to balance out the risk spectrum over time. In your 20s you can be a bit of a penny pincher. No one expects a 21 year old dude lifting heavy weights to be popping bottles of Louis XIII or Dom Pérignon. The trick? You have to bet on yourself at some point."
https://bowtiedbull.io/p/why-fire-doesnt-work-and-who-this
14. The immense power of the big tech on geopolitics. Interview with Ian Bremmer. Interesting interview.
https://www.youtube.com/watch?v=nXJBccSwtB8
15. Good reasons to be bullish on Turkey. I am personally and will be a market that I will spend more time in.
https://timothyash.substack.com/p/turkey-reasons-for-optimism
16. Lots of great tips on hiring and team building. Real world meeting and discovering talent.
https://www.youtube.com/watch?v=XtP-csNuCYU
17. This is a good framework for angel or VC investing. I started off Average Joe type investing at 500 but with experience, do more Babe Ruth style investing now.
https://www.eu.vc/p/angel-investment-strategies-and-how
18. Zeihan was right. Mexico tops China as USA's top trade partner. This was always inevitable under NAFTA. De-globalization happening or de-globalization as we knew it that is.
https://finance.yahoo.com/news/myriad-concerns-americas-number-1-180000857.html
19. This is a great discussion on talent and career. Optionality is bad. Take more risks.
https://www.youtube.com/watch?v=t1gPHgCNe5o
20. Every action has an opposite or equal reaction.
“While the U.S. rules introduced last October slowed down China’s development of advanced chipmaking capabilities, they left largely untouched the country’s ability to use techniques older than 14-nanometers. That has led Chinese firms to construct new plants faster than anywhere else in the world. They are forecast to build 26 fabs through 2026 that use 200-millimeter and 300-mm wafers, according to the trade group SEMI. That compares with 16 fabs for the Americas.
When you think about electrification of mobility, think about the energy transition, the IoT in the industrial space, the roll-out of the telecommunication infrastructure, battery technology, that’s all — that’s the sweet spot of mid-critical and mature semiconductor,” Peter Wennink, chief executive officer of Dutch chipmaking equipment supplier ASML Holding NV, told analysts in mid-July. “And that’s where China without any exception is leading.”
https://time.com/6299563/the-u-s-and-europe-are-growing-alarmed-by-chinas-rush-into-legacy-chips/
21.Strongly recommend this episode of NIA. Good discussion on investing in India and bootstrap businesses. So many good nuggets on Service versus SaaS businesses.
https://www.youtube.com/watch?v=RZTu5ijn6yY&t=5s
22. "With this you can see that it is unlikely that the USA sees significant population growth over the next 10 years. Relative to other countries it will be fine (it’s not going to go negative). That said, you can figure out a pretty simple formula. You know the baby boomers have the money and the assets. You know their kids will have the money and the assets when they move onto the after life.
At this point we know which trends matter: boomers and their children. This made it pretty easy to predict the growth of pets and plants. Now? The boomer generation is getting older and the millennial generation is starting to barely taste that sweet sweet inheritance (top end of range of millennials)
Boomer Opportunities: Complaints = opportunities. Boomers will be suffering from boredom. This is particularly true in their retirement years and of course healthcare is of utmost importance. Since we’re wagering that medical is only a select few reading here, there is another obvious one which is boredom. Read that again. They are bored. The solution here? Easy, Pickleball clubs.
The tricky part here is that this will be a decade long trend and likely die off (more on that in part 2). It is the subject of how profitable it will be and also an explanation of why it won’t last (hint: ESPN Pickleball will be a flop long-term)
Millennials: This is by far the most insecure group out of all the age brackets. The vast majority are significantly less successful than their parents. In fact, it is so bad that you’re seeing a lot of these desperate men attempt to gold dig older women just to get money. Quite insane.
Things that will sell to this generation are vanity items. Botox, lip fillers, lambo trucks, Gucci backpacks, Rolexes etc. If it doesn’t improve vanity, it won’t work since this is the generation that grew up with Instagram drilled into their brains (social signaling).
Short Conclusion:
Since the money is with boomers and their kids, we recommend choosing one of those niches. Since there is a metric ton of complaints related to getting into Wall St. or High tech we’re going to walk through the Pickleball numbers. You’re going to have a lightbulb go off and someone will end up doing it. The vast majority will ignore it but it’ll be one of the highest cash flow machines for about a decade."
https://bowtiedbull.io/p/demographics-markets-to-target-and
23. For anyone who cares about their career and aligning it with your life force & mission. Learned the term "Hearts on fire."
https://www.youtube.com/watch?v=aIWDvuJhVm8
24. David Perell's media empire is super impressive. Much to learn here.
Big fan and former student at Write of Passage. I do recommend it.
https://www.youtube.com/watch?v=pkl_WkE8F_0&t=40s
25. Lots of good ideas for when investing in frontier markets. Pitfalls and upsides discussed. Uzbekistan is super interesting.
https://www.youtube.com/watch?v=yDYMucuZN_Y
26. A trip down memory lane. History does not repeat itself but it does rhyme. Lessons from the dot.com bust. It sucked.
"There are a lot of parallels between the dot com era and the now.
Economies run in cycles. They expand and contract, and then repeat. We just lived through an exceptional tech boom and we’re in a contraction phase, with higher interest rates, lower valuations, and many “over their skis” from prior investments. The repercussions have not yet worked their way through the VC ecosystem and will continue in the coming years. But the promise of AI and the leverage technology provides will likely help avoid the prolonged downturn of the 2000s.
A downturn is a proven time for companies and teams to get stronger, and a proven time to found and build a new company."
27. "The third is the most probable path to Ukrainian success. It will be slower and more gradual than the other two—and slower than Ukraine’s Western backers desire and expect. It depends on the West providing Ukraine with a constant flow of equipment likely over many months so that Ukraine can maintain its pressure until the Russian forces offer the kinds of frontline cracks the Ukrainians can exploit. It is not primarily a matter of attrition.
The slow pace of the pressure campaign Ukraine had been using before July 26 is designed to minimize Ukrainian losses. It is not primarily oriented towards attriting Russians either, but rather towards steadily forcing the Russians out of their prepared defensive positions in ways that the Ukrainians can take advantage of to make operationally significant advances. It is still maneuver warfare rather than attritional warfare, just at a slower pace. It therefore requires patience, but it can succeed.
This situation is not a stalemate, however, and won’t become a stalemate if the current Ukrainian push falls short of expectations or bogs down again after initial successes. Stalemate occurs when neither side can materially change the situation and there is no meaningful prospect that either side will be able to do so in the future. The Ukrainians have not yet demonstrated that they can make rapid and dramatic penetrations at this time, but neither have the Russians shown that they can sustain their current defensive approach against a protracted and probably increasingly effective Ukrainian pressure campaign.
The Ukrainians still have the initiative in the theater overall and especially in the south. They choose when, where, and how they will attack. The Russians must defend everywhere and always. The theater geometry may come to play a critical role here as well—the Russians have to win every time; the Ukrainians only have to win once."
https://time.com/6300772/ukraine-counteroffensive-can-still-succeed/
28. This assessment of the Saudi & US relationship is pretty good. I think it will get better in the future in my opinion.
https://www.youtube.com/watch?v=STmadSVyWnU
29. Unheralded success story in the media world, niche B2B: Industry Dive.