Marvin’s Best Weekly Reads June 23rd, 2024
“Learn to relax. Your body is precious, as it houses your mind and spirit. Inner peace begins with a relaxed body” –Norman Vincent Peale
"My recommendation is to use the naming convention Rule of 40 when discussing the traditional growth plus profitability score, and use the naming convention Rule of 50 when discussing growth plus profitability where growth is doubled to represent its greater weighting. Startups should use the Rule of 50, representing growth rate multiplied by two plus free cash flow margins when assessing their performance. Growth is more valuable than profitability."
https://davidcummings.org/2024/06/08/rule-of-50-weighted-2x-for-growth/
2. "I can't tell you what precious metals are going to do next week. I can't tell you what they are going to do next month. But twenty years ago, gold was $200/ounce and we had a fraction of the debt we do today. I would bet my last chip that in another 20 years, there are going to be far more US dollars chasing fewer goods and services and roughly the same ounces of gold. AI is not going to save us. We are a society of humans, and the social obligations to those humans - i.e. unfunded liabilities - reach numbers beyond reckoning. Even if we can build robots to nurse all the old people, the amount of raw materials required to do so are going to strain all industrial supply chains.
In the case of silver and platinum group metals - not only does all the above apply - but the supply demand fundamentals are excellent as well, as I have written about on several occasions. We use more silver in industrial (primarily electronic) applications than we pull out of the ground every year. If it weren't for melting grandma's silverware, we wouldn't be able to make all the solar panels and batteries that mainstream politicians across the world are demanding.
My advice is this - keep accumulating any long term, durable assets on weakness. The trajectory the economic ship is on isn't changing. We're headed straight for the rocks, and our life rafts are made of printed money. The promises we have made to society - i.e. all of the social obligations our budgets go towards - cannot be met through taxation or increased productivity.
All of those teachers and veterans and policemen who were told they could rely on the system in their old age will only realize with time that they were sold a lie - and when it truly hits them, they're going to be very pissed off. The long term trend that began in the 1970s and only briefly reversed will continue for as long as our current monetary trajectory does - that is, until it collapses."
https://calvinfroedge.com/reminder/?ref=calvins-thoughts-newsletter
3. "I hit my “number” almost a decade ago. I purposefully paused and spent a great deal of time and consciousness on erecting scaffolding to update/temper my instinct to acquire more wealth. I decided I would spend a great deal of money on experiences with my family or services that gave me more time to spend with them and my friends. I likely only have a third of my (chronological) life left, but I’m intent on living 4/3 of my life in that remaining time. Meaning, I want to have a series of experiences that make me feel closer to family and friends and squeeze as much juice from this 7 continent ellipsoid as possible.
After molesting the Earth for 30 years for business, it became obvious that staying in the most beautiful places, in the most iconic cities meant nothing when I was there alone. The previous sentence could also describe my thirties. It’s as if that decade never happened, as I was mostly alone.
Another observation I’ve made roaming Terra is that the U.S. is the best place to make money and Europe the best place to spend it — one of the reasons we moved to London. In addition, I have a self-imposed tax of 100%. Each year, I add up my spending and give that same amount, or more, away. The surprise, for me, around giving is how masculine it makes me feel. I feel my strength and skills are protecting and providing."
https://www.profgalloway.com/hoarders/
4. The title says it all. "The West is Under Constant Attack, it’s time to wake up"
https://www.youtube.com/watch?v=Wwi5PYN4KJY
5. "When we zoom out, this is how much of SaaS looks like today: a Malthusian bloodbath. At the beginning of the SaaS cycle, most markets were green-field opportunities, but today almost every SaaS category is saturated, every account requires a rip & replace, leading to longer and more competitive sales cycles, lower customer loyalties, leading to lower NRR, higher churn, and high vendor fatigue. These are the tell-tale signs of the tail end of an OPEX cycle — a cycle that doesn’t speak “I win because my innovation is better than yours”, but rather “I win because my $s are bigger than yours”.
Over the last 60 years, a lot of R&D has gone to bring the cost of compute down to near zero. This led to a personal device in every hand. We also have had the cost of distributing this compute down to near zero as well. That brought the marginal cost of software down to zero, which is basically the reason the internet exists. The next 30 years is going to bring the cost of intelligence down to zero. What would the world of software look like if everything ran on “insights” instead of “compute”? If you are a founder building in SaaS, this is what you should be gearing up for."
6. "She said the same mistake was made in 1938 when tensions in Abyssinia, Japan and Germany were treated as isolated events. The proximate causes of the current conflicts in Ukraine, the Middle East, the South China Sea and even Armenia might be different, but the bigger picture showed an interconnected battlefield in which post-cold war certainties had given way to “great-power competition” in which authoritarian leaders were testing the boundaries of their empires. The lesson – and necessity – was to resist and rearm. “The lesson from 1938 and 1939 is that if aggression pays off somewhere, it serves as an invitation to use it elsewhere,” Kallas said.
Snyder drove home his lesson from history: “If Ukrainians give up, or if we give up on Ukraine, then it’s different. It’s Russia making war in the future. It’s Russia making war with Ukrainian technology, Ukrainian soldiers from a different geographical position. At that point, we’re in 1939. We’re in 1938 now. In effect, what Ukrainians are letting us do is extend 1938.”
7. A great teardown of Boeing and the implications of its decline for America and the flying industry.
https://www.youtube.com/watch?v=Q1pmCK6CrK4
8. Balaji is always illuminating. Bit grim but agree that America is in a bad spot and run by idiot elites. Worth listening to.
https://www.youtube.com/watch?v=q7NBi6yLcJY&t=1s
9. "So in a world where ambition can be powerful, and we want to seek truth, and build the future, what can we say about a huge swath of the world that doesn't feel that same ambition? That same drive to accelerate? Because, whether you like it or not, you can't accelerate a society despite itself. Society crumbles or ascends based on its collective ability to believe in something.
The American Dream isn't a policy, or the result of a political party. It is a collective fever dream of people believing something hard enough to make it happen. But without that belief in a better life as the result of hard work, we can build all the rockets, robots, and AI we want. But society won't be lifted in spite of itself.
As we all seek to do work that is meaningful. To build companies that are meaningful. To hire people to build meaningful things. Whether we like it, or not, it will always come back to an individual equation. Each person is responsible for articulating how they will judge their own life. What will matter to them when all is said and done.And as long as we continue to cede that responsibility to other forces we will remain unfulfilled. But as soon as we reclaim that responsibility, even if we fail, we will know what satisfaction truly is."
https://investing1012dot0.substack.com/p/the-hardening-of-the-great-softening
10. People pleasing is a curse.
https://lifemathmoney.com/stop-trying-to-be-liked-by-everyone/
11. This is an instructive conversation on investing in consumer startups.
https://www.youtube.com/watch?v=HFWlrIb81Sw
12. "Handling a problem is hard. Avoiding it makes you feel like a coward. Accepting it feels like giving up. Fixing it feels like the world rests on your shoulders, making you resentful that everyone else is relaxing. But — you must allow yourself to park a problem and maybe revisit it later."
https://medium.com/thinking-about-startups/dont-grind-your-teeth-388fb90903eb
13. "To sum up, in the world today, we find on one side a rather liberal Euro-Atlantic and Indo-Pacific family, whose backbone remains the alliance of English-speaking maritime powers; and on the other, a rather authoritarian Eurasian family, dominated by the Sino-Russian axis of continental powers.
It bears underlining that these distinctions remain approximate. Just like during the Cold War, a country can be strategically in the Western camp and politically in the authoritarian one. In this sense, U.S. President Joe Biden’s “autocracies versus democracies” narrative is simplistic at best, as illustrated by the fact that among the countries invited to Biden’s Summit for Democracy were states not exactly known as paragons of democratic virtues—such as Angola, the Democratic Republic of Congo and Iraq—even as Hungary and Turkey, both treaty allies, were snubbed.
Nevertheless, between these two families, a politico-military showdown is taking shape, a hybrid strategic conflict that will borrow from the nationalisms of the first part of the 20th century and the Cold War of the second. This war will sometimes be hot on the neo-empires’ marches, as it is today in the Western part of the Eurasian landmass; and sometimes cold, as it remains for the time being in East Asia. In short, it will be a “lukewarm war” peppered with regional crises and limited conflicts, but one that will probably remain contained, if only by the ultimate lifeline of nuclear deterrence.
This confrontation between two worlds could last several decades, punctuated by strategic shocks and realignments. In the search for analogies, the confrontation between Sparta and Athens might be as apt as the East-West conflict of the Cold War. If we are lucky, we will avoid that of the confrontation between Rome and Persia, which lasted several centuries."
14. This is as always a great discussion on what’s happening in the tech industry. So valuable.
https://www.youtube.com/watch?v=nrDudJtKpiE&t=5s
15. "The number of micro-funds that have been established in the United States has increased fourfold over the past decade, and this is a positive thing for startups and society as a whole. They offer advantages that traditional VC don’t, and are also strategically positioned to help startups grow and scale.
They are transforming early-stage venture capital, and attracting a new breed of LPs that are ready to cater to this new sector of VC. Hopefully, as more micro VC funds are created, we will see more diversity in the ideas and founders getting funded."
16. I love Jim Rogers who has been a model for me as a global investor.
https://www.youtube.com/watch?v=KGsvwK9Q2sc
17. "It’s important to remember how much bigger China is than the U.S. It has four times the population and twice the manufacturing capacity by value-added. Any protracted conflict between the two countries would see the U.S. badly outmatched, despite its modest remaining advantages in some areas of technology. In other words, U.S. national security relies crucially on alliances — in order to be able to stand up to a much bigger opponent, you need a gang.
While the U.S. is pretty good at military alliances, it’s not as good at economicalliances. To be fair, no one really is — economic relationships are much more multifaceted than defense cooperation, so there’s no standard template for exactly how they’re supposed to work. But there are a few areas where the U.S. could cooperate more closely with allies in the quest to build a multinational economy capable of matching China’s.
The most obvious area is export controls. The U.S. needs countries like the Netherlands, Japan, Germany, South Korea, and Taiwan to cooperate if it’s to have any chance of keeping cutting-edge chipmaking technology out of China’s hands. So far, the Biden administration has done a pretty good job of this.
Second, the U.S. should immediately pursue defense manufacturing collaborationamong all its allies. The U.S.’ withered defense-industrial base and lack of a commercial shipbuilding industry means will take time to fix; in the meantime, America should be relying heavily on partners like Japan and South Korea to make the military materiel needed to deter China."
https://www.noahpinion.blog/p/three-holes-in-the-us-economic-strategy
18. "Despite the Ministry's dominant legal status, the central bank held a huge advantage: control over a secret monetary mechanism—a wartime legacy. The US Occupation had placed central bank insiders in their positions, but these insiders misused their power to form a small elite within the bank.
This elite held significant control over companies, entire industries, and the economy, and had no qualms about wielding this power. They selected and trained their successors, known as 'Princes.' Operating behind the facade of traditional interest rate policies, these five Princes ruled post-war Japan unaccountably, with no oversight from the prime minister, the Ministry of Finance, or even their own governor."
https://dollarendgame.substack.com/p/the-shoguns
19. Fun conversation on building a massive media business.
https://www.youtube.com/watch?v=hhutjoWcywQ
20. This is such a great conversation on how to live a better life. Well worth listening to.
https://www.youtube.com/watch?v=gZ5K4iReUnE
21. "As we face a new era of geopolitical tensions and technological advancements, the lessons from the 1930s and 1940s are more relevant than ever. The parallels between the challenges of that era and those we face today underscore the need for a robust and resilient defense industrial base. By embracing government-industry collaboration, modern mass production techniques, significant infrastructure investments, skilled workforce development, technological innovation, efficient resource management, supply chain coordination, and flexibility and adaptability, we can ensure our national security and economic prosperity.
The resurgence of isolationism, nationalism, and the formation of a modern “Axis of Autocracy” pose significant threats to liberal democracies worldwide. Just as the United States mobilized its industrial might to overcome the Axis powers in World War II, we must now leverage our technological capabilities and innovative spirit to meet these contemporary challenges."
https://andrewglenn.substack.com/p/rebuilding-americas-defense
22. The CCP is serious, we in the West are not.
https://cdrsalamander.substack.com/p/chinas-expanding-base-in-hainan
23. "If you understand how this whole game is played at this point you know the solution is pretty simple:
1) put all of your effort into building equity in something since you cannot fight inflation with wages,
2) build your future on the internet since that is where everyone will “hang out” in the future. In fact, many of you (including us) probably spend more time online than in the real world interacting with people.
3) learn to invest in a way that is going to grow *faster* than the general economy over the next 5-10 years,
4) have a 10-20 year view where population is actually lower in the western world - outside of immigration additions and
5) be ready for a populist movement - a real one - if tech can’t lower the cost of basic items fast enough.
This is more of a guessing game. If robots/AI etc can provide entertainment while people are not working, we’d bet that 60%+ of the population honestly wouldn’t mind. (#5 is more of a wait and see)."
https://bowtiedbull.io/p/inflation-steal-from-you-give-to
24. "The lessons from Ukraine is driving the need for new forms of successfully executing attacks - at all levels of military endeavour"
https://mickryan.substack.com/p/the-quest-for-a-new-offensive-doctrine
25. Incredible interview here with the founder of one of the most unique PE firms. Lots of personal development stuff in here that was very helpful.
https://www.youtube.com/watch?v=h19TEWB2lNg&t=1757s
26. This is gold for SaaS founders.
https://www.youtube.com/watch?v=CDlOq1iDNe4
27. Geopolitics and AI tech, this is an important discussion.
https://www.youtube.com/watch?v=sQmwOX7rUZ8
28. Fascinating discussion if you are interested in the sovereign individual concept and how to move your money around the world. That and how to think about commodities investing.
https://www.youtube.com/watch?v=Jd-vvrPW9YI
29. "So let’s take a closer look at the Russian threat which is still not to be underestimated, on the contrary. A win or even a stalemate with Russian dominance in Ukraine will embolden Putin and allow him to make his next move. That will mean a direct conflict with NATO which is what former CIA chief David Petraeus argued in an interview earlier this week. Quite prescient.
And support for Ukraine has not been up to the level that is required to ensure Putin is boxed in and so he effectively has the upper hand. I really enjoyed this short video from William Alberque, a former NATO security expert who explains how Putin has been winning and the West has been struggling to confront the threat. Now if you factor in how the EU election has created more divisions than unity, you will get the picture.
Both Petraeus and Alberque make the clear point that things do not look all that good if you are not committed to see the war in Ukraine through in a really decisive matter. The shifting political landscape is not helping in finding a unified voice to address the multiple threats that western democracies now face."
https://pieterdorsman.substack.com/p/europe-trembles
30. This is a very smart guy.
https://www.youtube.com/watch?v=jNbEr9F0wiE&t=2s
31. This is an interview everyone should watch. I needed this myself. Highly recommend it.
https://www.youtube.com/watch?v=bv4DlMnlQn4&t=2679s
32. This is a fun show. Worth watching to understand what’s happening globally.
https://www.youtube.com/watch?v=sAWlqIWn0Lg
33. "Of course, this being a Taiwan-focused blog we have to bring in a Taiwan angle. Are there any predictions of the chance of Chinese invasion of Taiwan out there? Yes, it is a question that is being continually tracked on the crowdsourced prediction site Metaculus.
According to the wisdom of the Metaculus crowd, the chances of an invasion by 2025 is just 1%, the chances of an invasion by 2030 is 21% and increases up to 31% by 2035. If you think differently, you can add your opinion to the mix.
In a way, those numbers are comforting. Compared to the breathless prediction of invasion, a third to a fifth chance sounds manageable."
https://taipology.substack.com/p/how-to-predict-the-future
34. "Compared to Snowflake, Databricks is growing nearly twice as quickly. Without additional data, it’s difficult to comment on the relative sales efficiency or profitability.
Databricks’ growth rate is yet another example of the rapid demand for AI infrastructure & the systems needed to power it."