Marvin’s Best Weekly Reads June 25th, 2023
“Our ambition should be to rule ourselves, the true kingdom for each one of us; and true progress is to know more, and be more, and to do more.” – Oscar Wilde
I love Sauna.
"Their results: Men who took saunas four to seven times a week had about a 65 percent lower risk of developing Alzheimer’s disease or other dementia over the next 20 years than men who did it once a week (after adjusting for other factors, like drinking and exercise)"
https://www.menshealth.com/health/a44079133/saunas-benefit-brain/
2. "Taiwan is best known for making cutting-edge semiconductors. But its companies also turn out other crucial components from printed circuit boards to advanced camera lenses, and they run huge device assembly operations in China.
This has created a triangle of critical interdependence between Taiwan, China and the U.S. that has deepened even as tensions between Beijing, Washington and Taipei have risen.
“People underestimate Taiwan’s position in the supply chain. It’s much more than just about semiconductors. We have a very complete supply chain from chips, components, PCBs [printed circuit boards], casings, lenses to assembly … anything you can think of,” a senior executive at Compal Electronics, a vital product assembler to Dell, HP and Apple said. “If there’s military friction happening to Taiwan, the entire global supply chain will collapse for sure.”
https://asia.nikkei.com/static/vdata/infographics/taiwan-economy/
3. I loved Marrakech and can't wait to go back. Here is a good list of places to check out.
4. "While the Western world has been at the forefront of supporting Ukraine, Russia is likewise receiving aid from antagonist countries that support the vision, which Russia exports. That vision is one of autocracy, where might-makes-right.
It’s a vision wherein the strong take what they want, and the weak must suffer and endure. It’s a return to a system and society-of-states that existed centuries ago, wherein wars were fought simply because a belligerent wanted more space.
These reactionary geopolitical actors are pumping money to Russia (often discounted buying oil from the sanctioned country), giving advanced weapons systems, and providing schematics and blueprints, like for the Iranian Shahed UAV.
China, Iran, and North Korea are all leading the effort to keep Russia equipped and supplied. It is likely that their intentions are similar to our own: to force the other side to spend blood and treasure for a war that it will ultimately lose and to gain insights into the technological innovations and developing practices of employment."
https://andrewglenn.substack.com/p/update-on-the-ukraine-russia-conflict
5. "There is a big difference between starting an offensive, and the main attack or main effort of the operation. The offensive has clearly started, but not I think the main attack.
When we see large, armored formations join the assault, then I think we’ll know the main attack has really begun. To date, I don’t think we’ve witnessed this concentration of several hundred tanks and infantry fighting vehicles (IFVs) in the attack."
https://cepa.org/article/think-ukraines-offensive-has-started-wait-for-the-heavy-brigades/
6. "Adventures today are not always grand journeys or great challenges. Often, they are intellectual adventures. And increasingly, many people are content to sit as NPCsletting the challenges pass them by, instead choosing to take the easy way out. Whether you're investing in startups, building companies, working on someone else's something, or seeking to change the world—there are plenty of people who would rather take the easy way out.
The debate of ideas has been largely displaced by the debate of identities. Whether you're conservative or liberal, religious or atheist, capitalist or socialist. We are, in most instances, arguing more about the identity of the person leading the argument, rather than the merits of the idea.
The path to progress more often is built on the value of the ideas themselves, and the execution of those ideas. I think that's why I experience so much cognitive dissonance when it comes to characters like Elon Musk. I can simultaneously think a lot of what he does is gross, while having immense respect for his ideas and execution. But a lot of people can't seem to divorce his character from his contributions."
https://investing1012dot0.substack.com/p/the-cowards-conviction
7. "After decades of disappointment, we’re dreaming about space once again. A more robust presence in space will have many implications for the rest of us back home, from the emergence of new industries (like manufacturing in microgravity) to the destruction of old terrestrial ones (like cable monopolies). Of course, the further out we go, the more problems we’ll need to contend with, from clearing up space debris to figuring out how to service existing spacecraft better.
With technology, problems often become the source of opportunity, and space is teeming with both."
https://every.to/p/the-satellite-renaissance
8. "Don’t want to build your new fab in America, where construction costs are sky-high, skilled labor is scarce, and the lawsuit-driven permitting system takes years to navigate? Just build it in low-cost Japan, with its efficient bureaucratically-administered regulation and low-ish salaries! This logic is obviously compelling for companies like Taiwan’s TSMC and America’s Micron, both of which are now building fabs in the Land of the Rising Sun.
Japan’s GDP growth in the first quarter was very robust, driven in part by high levels of private investment.
The weak yen should be a tailwind for these efforts. Despite the word “weak”, a cheap currency makes it very easy for foreign companies to invest in factories in your country, and to buy the products those factories produce."
https://www.noahpinion.blog/p/at-least-five-interesting-things-5f5
9. "Therefore, in the short term, Gerasimov is most likely to ‘hang tough’. That doesn’t mean there won’t be bitter fighting on the ground. Nor does it mean the pace of the vicious drone and missile assaults on Ukrainian cities and infrastructure is likely to slacken.
The track record of Gerasimov in this war makes for unimpressive reading. He was strategically impatient in launching the 2023 Russian offensive and has not yet delivered any results to Putin other than holding on to Russia’s currently occupied territory. This might be enough in the medium term, but it assumes he still possesses large tracts of Ukraine after their offensive. This will probably not be the case.
There is an old saying that “when your enemy is making mistakes, don’t get in their way”. For some time, Gerasimov has shown an aptitude for making strategic mistakes. The Ukrainians will be hoping he keeps this form in his command of the Russians defending occupied Ukraine in the months ahead."
https://mickryan.substack.com/p/what-now-gerasimov
10. Every American and their allies need to watch this (and read his books).
China is our biggest near and present threat and we need to act accordingly ie. no more half measures on the US side.
https://www.youtube.com/watch?v=6nlyLsw1qi0
11. "The best players of the game, by definition, survive. They prioritize playing another day over the chance to do a little better today. To do so, they study failure.
What would someone prevent from being a great investor with longevity? I can think of a few ways:
Classic ingredients for bad decisions: Ego, biases, and emotions.
Also, mistakes meeting overconfidence and concentration.
A failure to correct mistakes or adapt to change.
A lack of resilience in bear markets and drawdowns due to leverage or fragile capital structure.
Style drift into a game in which the investor has no edge.
Lastly, burnout.
A combination of these can derail even the most experienced operators."
https://neckar.substack.com/p/surviving-markets-why-great-investors
12. "Distressed countries are a different ball game. The legal framework for sovereign debt distress is complex, with no formal international bankruptcy process for nations.
The scale, complexity, power dynamics, and the very act of going up against the people who write the laws to receive what you are owed at the expense of the millions of people in that nation might rightfully scare some people away from getting involved at all.
Fear to some is opportunity for others. Despite getting burned along the way, hedge funds have continued to dive headfirst into sovereign distressed situations not knowing which end of the pool they’re on. Those that swim back up to the surface may have gone through months or years of legal battles, political maneuvering, and incurred significant expenses.
Investing in sovereign distressed debt requires a deep understanding of economics, politics, finance, law, and of course, distress. It can also require developing localized knowledge (have any friends in Zambia?), managing language barriers, and perhaps needing to get your hands dirty as you leave the protections of the U.S. legal system and wage fights in emerging markets.
If by chance you are located in a country facing financial distress, you have the lucrative opportunity of becoming a trusted advisor for hedge funds, private equity funds, and other investors looking for boots on the ground in your country.
Beyond investing, sovereign distress is a topic that affects the lives of millions of people all over the world. The financial and economic situations of a country have a deep impact on the lives of its citizens and their future prospects. Well-managed countries are able to invest in infrastructure, education, healthcare, and overall development of the basic things those of us in functional societies take for granted.
Countries where political leaders exploit the finances of a nation for their own gain should not be surprised to find themselves at the negotiating table once traditional lenders tap out. They will tap out, eventually."
https://bowtiedbull.substack.com/p/high-stakes-finance-sovereign-distress
13. Still a believer in the long run on the Creator Economy but it’s ugly at the moment & probably the near future.
“At this time, and for the foreseeable future, the middle class of the creator economy is not going to be able to flourish,” Shapiro said in an interview, who added that his company has enough money to last for nearly three years.
That’s bad news for the hundreds of startups that have formed over the past three years to supply creators with bespoke technology products, from accounting software to video-editing apps. Many of them are trying to find buyers, including Popshop Live, a live-shopping startup for businesses and creators that raised about $25 million from investors including Benchmark.
Some, like the parent company of Koji, are pivoting to products in entirely new markets outside the creator economy, while others are shutting down entirely.
Consolidation is a story as old as the tech industry, one that has played out in nearly every category that has caught fire with entrepreneurs and investors, from personal computers to security software—and now the startups selling services to individuals that have made careers from their online followings.
“There are three periods in any technology market: The first is havoc, where hundreds of little companies are all vying for market share, and then there is a period of consolidation because they can’t all survive,” said Sucharita Kodali, a principal analyst at research firm Forrester. “The weakest ones die and go away, and then there’s a reset at the end of it.”
https://www.theinformation.com/articles/a-reckoning-arrives-for-creator-economy-startups
14. "Nothing in either of these reports necessarily means a faster growing and higher productivity economy will also mean one with higher unemployment, although there may be more job changing, more dynamism. If so, as MGI notes, “workers will need support in learning new skills.”
But history suggests that general purpose technologies — and AI/machine learning/GenAI sure look like one — have a history of broadly improving human welfare even as they also unpredictably change what humans spend their days doing. Both of the recent periods of rapid productivity and economic growth, the 1960s and 1990s, were also ones of rapid job growth. There’s no reason yet to think another tech-driven boom will be any different."
https://fasterplease.substack.com/p/brace-yourself-the-ai-jobs-panic
15. Such a great discussion on what’s happening in cultural businesses. The overview of Messi going to Miami deal is excellent.
https://www.youtube.com/watch?v=PJknCqdRIpE
16. "China is a manufacturing country, manufacturing is around 30% of their Economy. They took the position of being the world’s assembly line but it came at a cost. What happens when people don’t want to do business with you?"
https://bowtiedhitman.substack.com/p/the-state-of-the-chinese-economy
17. "Sol was a poster child for the American dream. His immigrant parents were born in a small Russian village. Sol was the first in his family to graduate college. He earned a law degree. He became an exceptionally successful businessman and philanthropist, celebrated 70 years of marriage, was a good father who instilled high values in his sons, and he never walked away from responsibility. It doesn’t get much better than that."
18. "Rather, potential astronomical revenue growth fuels valuations by bringing software to new categories & by serving new unmet interest & voracious demand.
The businesses capturing that demand will command massive valuation premiums.
Even with an AI moniker adorning the pitch deck, a software company is a software company."
https://tomtunguz.com/the-ai-premium/
19. "In Harmon’s view, patience was often wishful thinking: the hope of future proficiency preventing you from really working today at what you want to improve."
https://www.scotthyoung.com/blog/2023/06/13/too-patient/
20. "The unfortunate reality is that, despite craving closure, many people don’t react well to critical feedback. I’ve seen everything from profanity-laden emails to lengthy twitter threads to outright screaming sessions in response to well-meaning, thoughtful feedback. While it might be easy to dismiss these as extreme outliers, they happen more often than you might think."
https://chrisneumann.com/blog/why-dont-vcs-give-feedback
21. "If they see banks continuing to lend and prices remaining elevated, they will hike rates harder and faster until the small distressed banks go to zero. They
have no other objective beyond getting inflation below 2%.
#2 Yellen is telling us 0% rates are likely over for a long time.
This is what she is really trying to say. If there is no workaround to using the US dollar, the message for lower reserves suggests higher interest rates.
If you think people will try to use less dollars, then your goal is to increase the demand for those dollars. The only way to do that is by keeping interest rates at a competitive level."
https://bowtiedbull.substack.com/p/inflation-and-interest-rate-messaging
22. "Our greatest scarcity in the broader startup ecosystem is capable and motivated founders. In failing to normalize failure, care for those going through it, and train our best folks in new ways of working in greater connection and support, we set up our best people for failure.
There is another way."
https://www.mattmunson.me/the-values-we-ought-to-leave-behind/
23. "But the most successful people I know internalize the “based” way of viewing the world — that is they are pragmatic, realistic, and in some ways blunt — they aren’t “politically correct”. They don’t let external noise and the opinions of the masses dictate the way they analyze key issues and events or their opinions.
They understand human nature and that higher powers are always at work to consolidate more money and more control. They live positively with this in mind guiding their actions and decisions.
Keep it simple when it comes to finances and markets:
-Bitcoin? Based. It’s limited in supply, immutable, and non cancelable
-Working for yourself? Based. You are self reliant and independant
-Working a white collar job AND having a business? Super based.
-Gold/Silver in reserve for SHTF situations? Based.
-Owning real estate so you don’t rent endlessly? Based.
-Rejecting CBDCs and controlled money? Based.
-Investing regularly in quality stocks, bonds, and assets? Based.
-Not burning money on superficial items and excessive dopamine? Based.
-Paying for only fans? Not based."
https://arbitrageandy.substack.com/p/how-based-are-you
24. "Technology changes our lives, but typically not in the ways we anticipate. The future isn’t going to look like Terminator or The Jetsons. Real outcomes are never the extremes of the futurists. They are messy, multifaceted, and, by the time they work their way through the digestive tract of society, more boring than anticipated. And our efforts to get the best from technology and reduce its harms are not clean or simple.
We aren’t going to wish a regulatory body into existence, nor should we trust seemingly earnest tech leaders to get this one right. I believe that the threat of AI does not come from the AI itself, but that amoral tech executives and befuddled elected leaders are unable to create incentives and deterrents that further the well-being of society. We don’t need an AI pause, we need better business models … and more perp walks."
https://www.profgalloway.com/techno-narcissism/
25. "During the pandemic-fueled rush into private tech, VC funds grew extremely large. Firms like Coatue Management, which raised $16 billion for private investments between 2018 and 2021, sucked all the air out of the room. These funds made winning deals far more challenging for traditional, smaller venture firms, whose ability to generate consistent returns is better proven, according to investors.
For months, venture capitalists have been telling startup founders they shouldn’t be ashamed to raise down rounds at valuations that more accurately reflect their businesses. They should take their own medicine: Venture firms shouldn’t be ashamed to raise funds that more accurately represent the opportunities in front of them."
https://www.theinformation.com/articles/the-end-of-megafunds
26. "Ukraine is trying to do something that has not been successfully accomplished (perhaps ever) before. They are trying to execute a wide-scale offensive with the use of armored vehicles without air supremacy against an entrenched enemy which possesses a large supply of defensive weaponry. Many of the advantages Ukraine was able to use effectively in slowing any Russian advances to slower-than-snail pace over the last 6 months are now with the Russians.
The Ukrainians are having to contend with the fact that now they need to send forces forward, including tanks, APCs, and other vehicles, and they must operate in an environment in which they are threatened by a large number of different systems—such as the almost ubiquitous hand-held anti-vehicle missile."
https://phillipspobrien.substack.com/p/counteroffensive-update-one-week
27. I really like his books which have helped me personally.
"Holiday first made his name more than a decade ago as a marketing wunderkind and then mined that experience to produce the best-selling exposé Trust Me, I’m Lying: Confessions of a Media Manipulator. But he soon trained his focus on Stoicism, the ancient school of philosophy that has informed his other massively successful books, including 2014’s The Obstacle Is the Way: The Timeless Art of Turning Trials Into Triumph and 2016’s The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living. (He did not fully decamp from his perch as an observer and critic of the media. In 2018 he published Conspiracy: Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue.)
Holiday is now the locus of a constellation of franchises that churns out books, podcasts, and newsletters and has attracted a large, devout audience, one that has ballooned further since the pandemic: in 2020 one of his four Instagram accounts, @dailystoic, doubled its followers to more than two million. The judgmental alabaster faces of the early Stoics peer out at us from every social media platform.
Holiday’s Stoicism revolves, in part, around the idea that we have tremendous agency in sculpting our reactions to the world around us. In The Obstacle Is the Way, which was famously popular among the New England Patriots ahead of their 2015 Super Bowl victory, he directs us to focus on the “poorly wrapped and initially repulsive present you’ve been handed in every seemingly disadvantageous situation.”
Reading his books, one feels that one has a greater capacity for rational action than when one’s index finger is quivering with the urge to press “send” on an ill-advised, passive-aggressive email.
(From The Daily Stoic: “Today, don’t try to impose your will on the world. Instead see yourself as fortunate to receive and respond to the will inthe world.”)
From Marcus Aurelius, Epictetus, Seneca the Younger, and beyond, Holiday draws all manner of wisdom, and he confidently pulls out threads of Stoicism from the works and lives of others.
By virtue of the daily format of some of his titles and the infrastructure around them—social media, podcasts, and YouTube channels—many of his fans engage with his content every day, as one might with a religious leader."
https://www.texasmonthly.com/arts-entertainment/ryan-holiday-stoic-king-bastrop-painted-porch/
28. A very sober conversation on the rise and fall of great powers. Dalio has a good take here.
https://www.youtube.com/watch?v=AEy3FgvWC0M&t=85s
29. Useful metric to track, which countries the wealthy are leaving and where they are going to. Good precursor of the future.
30. "Two generations later, Dr. Bronner’s has vastly outgrown its quirky, humble origins and become the top-selling natural soap brand in North America. The company now sells not only its liquid soap but highly successful lines of balms, toothpastes, coconut oil, and hand sanitizers, in addition to newly launched chocolates that were immediately hailed by gourmands as a premium product.
Today, the iconography of its labels—and Emanuel’s far-out messaging—is imprinted firmly in the psyche of the American consumer. And yet, even as so many Americans have come to possess a fondness for the soap, the raw numbers around the success of Dr. Bronner’s—over $170 million in revenue in 2022—are still kind of staggering. Especially staggering, maybe, to the customers who’ve been affectionately buying its signature minty formula since the days of the natural-product boom of the ’60s and ’70s. Emanuel’s grandsons David and Michael now preside over an empire in which a bottle of Dr. Bronner’s soap is sold every two seconds or so.
Growth is one thing, but Dr. Bronner’s has managed to become a major player in its market while painstakingly encoding its ethics into every step of the production process. In fact, it could be argued that Emanuel Bronner predicted the current era of ethically minded business, and certainly ethically minded marketing.
And now the humble soap brand finds itself at the vanguard of every philosophical and logistical question that American entrepreneurs are grappling with right now. All of its good deeds—from rigorously engineered fair trade supply chains to charitable donations and environmentally minded manufacturing—are thoroughly cataloged in the Dr. Bronner’s annual public accountability report card, the All-One! Report.
These ideals are built into the complex corporate architecture of Dr. Bronner’s—a certified Benefit Corporation as of 2015—and an agreement between David and Michael ensures that the business won’t be sold off to a global conglomerate anytime soon. It’s a fate that’s befallen so many household-name natural health and food brands, many of which began to flourish in the same era following the late-’60s counterculture revolution that Dr. Bronner’s did."
https://www.gq.com/story/dr-bronners-corporate-success
31. "Despite the challenges, we believe that now is as good a time as any to be building transformative solutions, with both consumers and businesses facing multiple pressures that can be solved through technology. High-quality startups with strong teams, positive unit economics (or a pathway to reaching them), a long runway of growth, and a data-driven approach to building their business will be able to raise.
Sturgeon Capital is actively investing in Central Asia, the Caucasus, Bangladesh and Pakistan and will continue to back founders building category-defining businesses in these difficult times."
https://sturgeoncapital.substack.com/p/how-startups-can-raise-money-in-emerging
32. Great discussion this week. All in Podcast is at its best when they talk about tech and business.
https://www.youtube.com/watch?v=5cQXjboJwg0
33. Solid tips for B2C companies (applies to some B2B too)
"Setting up the basics of a monetization system makes a world of difference as your company grows. The cohorts that sign up and don’t monetize are likely gone forever, so it really, really pays to set up a strong foundation.
If you can get to a place where a strong checkout page, pricing structure, paywall, payment processing and churn appeasements, then you’ll be better than 90% of early-stage companies."
34. "The San Francisco city government might take some of the blame here, as they did encourage tech companies to come to the city (especially under the previous mayor, Ed Lee). If you build offices without building houses, rents will go up — that’s about as close to an economic law of the Universe as you’ll ever find. But the city’s actions were understandable given its perverse incentives — because of California’s notorious Proposition 13, cities like SF can’t tax property as much as they should, and thus they have to attract and tax businesses in order to fund public services.
In other words, the affordability crisis in SF is the result of the collision of economic forces with political ones. A nationwide industrial shift, local clustering effect, and perverse California tax law drove up housing demand, while local NIMBYs and urban fragmentation made it impossible to increase supply to compensate. SF’s middle and working classes were driven out and homelessness went way up, which probably increased crime as well.
That collision of economic forces with political dysfunction, not any deliberate action by “tech bros”, is the cause of SF’s long-term woes.
But the old SF can never return. No number of mean tweets will drive the tech industry from its most important cluster; brute economics overrides cultural unfriendliness every time. The only way out is through — to build denser housing, to build more transit, and to do whatever it takes to make regular people feel safe walking the streets.
That is what needs to happen in order to make SF a place where both the rich and the middle and working class can live, once again. If we refuse to build, and instead content ourselves with bitter nostalgia and finger-pointing, then SF will remain a dysfunctional, chaotic playground for the rich."
https://www.noahpinion.blog/p/did-tech-bros-ruin-san-francisco
35. "And now that the TradFi Devil is causing trouble for some of Satoshi’s faithful, the market is freaking out regarding the potential removal of the US retail investor from the crypto capital markets. I believe this concern is misplaced, and if you are prompted to sell alongside US-domiciled institutions that feel they have to sell or discontinue crypto services to US persons, you will be just another sucker who bought the top and sold the bottom.
Because across the world in Asia, China and Japan’s silent currency war for export competitiveness is going to drive an insane amount of credit issuance by the second largest economy globally. This credit issuance — aka money printing — will ultimately weaken the yuan and prompt some of China’s mass affluent to shift their capital elsewhere. And given the sheer number of individuals that make up the Chinese mass affluent, when they want to “get out”, all manner of hard assets get pushed higher."
https://cryptohayes.substack.com/p/fungible
36. "A lot of companies from around the world are investing in Mexico which makes their short to mid term grown almost inevitable, I would buy that stock. What going to hold them up is mostly the security issue, because the transportation part can be solved by just throwing money at it. We don’t live in the 1600s, violence and business do not mix, big business requires stability and I’m afraid the security issue always makes that a huge grey area. How are companies going to feel when truck loads of semi conductors keep getting stolen and sold to China on the black market?
I’m afraid this might force companies to not continue investing too heavily. Why get your cargo stolen when you can go to another country and have that not happen? So what I see happening is more of a diversification away from China than outright replacement. Places like Vietnam are getting some of the shine too."
https://bowtiedhitman.substack.com/p/mexico-will-be-bigger-than-china