Marvin’s Best Weekly Reads June 26th, 2022
“To be without some of the things you want is an indispensable part of happiness.” —Bertrand Russell
"What’s most important to stress, however, in my opinion, is that when there is no Central Bank to backstop the market, the “bust” part of cycles always ends up happening, and as we’ve said, for a good reason. Additionally, in markets like crypto, we have daily prices for venture capital like projects, which is why cycles tend to be so brutal, both on the upside as well as the downside (can you imagine if start-ups were quoted in the stock market? How wild would their share price movements be? Well, that’s basically crypto)."
https://www.thelykeion.com/capitalism-at-work
2. "There’s a clear divide among the VC mindsets in different geographic regions. The book calls out the difference between the west coast and east coast VCs as the divide between believing in visions versus in the numbers. I’ve seen this myself as a general attitude for European VCs. If I could be so bold as to rank the willingness to believe in visions, it would look something like the following:
US VCs > European VCs
If I were to place Chinese VC on this spectrum, it would be between the two:
US VCs > Chinese VCs > European VCs"
https://lillianli.substack.com/p/the-power-law
3. I can't wait until this book comes out. This interview is a good preview.
https://www.youtube.com/watch?v=eqtf-3sRTzI
4. "This preoccupation with ownership—with users building their own experience, owning their own data and I.P.—is the defining feature of the discourse surrounding NFTs and Web3. Not long ago, I asked Finn Brunton, a technology historian and scholar of all things crypto, to explain why anyone would care about this stuff, what the phenomenon represented. “It is actually rather rare and special to feel that you own something digital these days,” he replied. “You may own your computer or phone, but it is rare to own anything on it: Your music and movies are streamed, and come and go; your digital life and social life and much of the content we consume and produce is all on other people’s platforms and making money for someone else.”
Everything we do online is already financialized, in other words, but the benefits accrue to other people—large tech companies, generally. Proponents envision a transition from this renter’s economy to an ownership economy, in which our data belongs to us, a primary resource that we’re finally free to control. “There is something weird and melancholy,” Brunton said, “about how little there is to NFTs beyond the act of ownership itself.”
The Yacht Club and its owners hoped to take the idea one step further, bringing their data to life and putting it to work."
https://www.gq.com/story/bored-ape-profile
5. More on the upcoming De-globalization and the ramifications of this.
https://www.youtube.com/watch?v=s-cQwRil1H0
6. Everythings a business in America it seems.
"With virtually no fee caps, experts are paid what the market demands for their services — and the market for their services is very robust.
In a high-profile case with millions of dollars at stake, it’s not uncommon to have 6-10+ expert witnesses between opposing sides.
The Depp-Heard trial featured nearly a dozen expert witnesses — psychologists, surgeons, entertainment and intellectual property lawyers, forensic accountants — that Lewis estimates collectively charged $1m+."
https://thehustle.co/the-lucrative-economics-of-expert-witnesses
7. Not a fan of Schwab, WEF or the Davos crowd. Corrupt arrogant scumbags.
"Do I believe the WEF is the cover for some grand Illuminati-like conspiracy, where the attendees are convening in secret to take over the world? No.
But at the same time, do I believe the Forum is also good for the state of our planet, or acting to benefit the average person? No, I don’t.
In my opinion, the WEF is an accelerator that will achieve not much more other than to help big business gain more control over global economic activities, eventually leading to an increased concentration of wealth and power. An assembly of elites promoting some frankly terrifying ideas of increased financial controls, including the implementation of a global digital identification system, as well as programmable Central Bank Digital Currencies.
It’s a club for the powerful, making decisions for the powerful, that will benefit the powerful. And it’s happening out in the open, right in front of our very eyes."
https://abundantia.substack.com/p/the-illuminated-ones
8. "The company, dual-headquartered in San Francisco and Dublin, processed $640 billion in payments last year across 50 countries. Its gross revenue, still mostly the 2% to 3% it collects on such volume, reached nearly $12 billion in 2021, according to sources with knowledge of its financials, up about 60% year over year.
Net revenue, which excludes the cut Stripe passes along to partners like Visa and Chase, reached nearly $2.5 billion. And, unusually for a unicorn that’s still growing fast, Stripe finished the year with hundreds of millions in profit on an Ebitda basis, two sources add.
“We’re not a glamorous business, just an infrastructure company that hopefully we’ll be able to compound for a long time,” says Patrick, his short cropped red hair sun-bleached after his rare week off. “The scope of the job doesn’t change that.”
9. "The most likely scenario I now foresee is that Ukraine will smartly retreat from the Donbas. They will walk, not run and force Russia to suffer extremely high costs for every inch of soil. They will counterattack from Kharkiv, and they will eventually cut the supply lines from Belgorod to the front. They will continue to degrade Russia’s offensive capabilities, and eventually, Russia’s offensive will stall, if not collapse.
Russia’s greatest weapon might be a world food crisis and inflation, but NATO is far from helpless to improve that situation. It can always give Ukraine the means to end Russia’s naval blockade of Ukraine’s remaining ports, like Odessa. The recent decision to transfer HIMARS to Ukraine suggests that NATO would trust Ukraine with long-range anti-ship systems.
There are no winners in this war (unless welcoming Finland and Sweden can count as a win for NATO) — everyone is suffering for it — but it seems increasingly likely that there will be a clear loser."
10. Very solid advice here for fundraising from VCs.
https://www.saastr.com/what-to-know-about-fundraising
11. The investing legend Druckenmiller.
https://www.youtube.com/watch?v=BtMNls7O3FY
12. "Despite our best efforts to express authentically held views in a civil manner and to back those views with data, we suspect it won’t be long. The creeping incrementalism of the do-gooders who have empowered themselves to adjudicate what information is suitable for public consumption will mean ever-more topics are considered off-limits.
Soon, critiquing society’s response to climate change will be labeled another form of climate denialism, and efforts to de-platform those expressing such views will accelerate. The intoxicating power to nullify people instead of hypotheses is irresistible, and Sagan’s dark predictions will prove true.
Bad dreams, indeed."
https://doomberg.substack.com/p/wide-awake
13. Lots here.
"effectively you can look at the five asset classes to decide what you should be buying: 1) real estate - from market cap it’s effectively the lowest risk if you’re buying a primary residence (forced to live somewhere), 2) bonds - unlikely applies to any of our readers as it slowly loses to inflation as these assets are handed down to the younger generation they likely buy stocks/crypto, 3) stocks - betting on long-term growth of the world economy which is rarely a bad bet, 4) Gold - unlikely becomes more popular but we’ll play along and say it maintains its market cap and 5) the highest risk with crypto where you’re betting money flows to the industry as it becomes more popular.
Flow of Funds: Before walking through these items, remember that increasing the money supply just sends the market cap up for all of these assets. If people keep the same amount of money involved in each asset class it means real estate goes up by the same *percentage* points relative to the other asset classes. The only way to get ahead in life is by finding the assets that take share - more flow of funds."
https://bowtiedbull.substack.com/p/asset-class-overview-internet-headwind
14. About time too. Nuclear power long overdue for comeback.
https://www.cnbc.com/2022/06/07/why-nuclear-energy-is-on-the-verge-of-a-renaissance.html
15. These Wagner Group folks are bad, dangerous people.
https://www.npr.org/2022/06/06/1102603897/wagner-group-mercenary-russia-ukraine-war
16. "Russian President Vladimir Putin is therefore trying to turn his invasion of Ukraine into a brutal contest of wills. He’s betting his army on breaking Ukrainians’ collective will to fight on in their country. His own won’t likely break.
Fortunately, Ukraine doesn’t need it to. If Ukrainians can weather the current Russian storm and then counterattack the exhausted Russian forces they still have every chance to free their people and all their land."
https://time.com/6184437/ukraine-russian-offensive
17. This is pretty valuable for SaaS founders. Agree with much of this. This guy has been around.
https://kellblog.com/2022/06/07/saastr-europa-slides-the-top-5-mistakes-in-scale-up
18. Woohoo Batch 24. Ham Serunjogi & Chipper Cash team crushing it.
19. Unstoppable networks. A very good breakdown and discussion of various businesses like Apple.
https://www.youtube.com/watch?v=pDObsgo2amc
20. "You're never tired when you are winning." This is a smart man: lots to learn here (don’t agree with his pro-Trump view though).
https://www.youtube.com/watch?v=cgk1WU38pTc
21. "Maybe we should think more about the why. We work for economic security and relevance — meaning, even. Just as we have incorrectly conflated masculinity and toxicity, work has errantly been positioned as the enemy. Something that depletes us, a necessary evil whose taskmasters (i.e., bosses) are inherently compromised people. Yes, sometimes.
However, for most young people, I believe there are few things that can solve more problems (loneliness, stress, depression) than work. Good work. And the path to good work usually involves shitty work."
https://www.profgalloway.com/notes-on-work
22. "The public markets are struggling, and the impact of that stock market slowdown has begun to trickle into the private sector, as well. That doesn’t bode well for pre-seed biotech startups like those at the Alliance’s showcase, who now must navigate a tepid market without necessarily having clinical data—biotech’s main proof of concept."
https://dot.la/biotech-funding-2657479400/phoenix-motorcars-raises-just-10-of-planned-150m-ipo
23. Must read for emerging VC fund managers starting off or in the middle of the fundraising process.
https://threadreaderapp.com/thread/1534182362098987011.html
24. "ESG is the new watch word for Western business. Doing the right thing, or showing you are doing the right thing is a marketing tool that business now flaunts. What bigger/better ESG story than helping Ukraine’s recovery from genocide and helping Western liberal market democracy succeed with economic development in Ukraine?
Important herein to recognise that Putin has already, thru his attack on Ukraine and various other malign actions against the West, shown he wants to attack and undermine our very system of government, and the rule of law upon which Western business has prospered."
https://timothyash.substack.com/p/ukraine-how-to-pay-for-the-war
25. "We have though learned from the period before February 24 that appeasement of Putin does not work. And experience after February 24 suggests that the only thing Putin actually respects is hard power. In the conduct of this war Ukraine and it’s allies have continuously crossed Putin’s red lines - in the supply of armaments, SWIFT sanctions, CBR asset freezes, NATO enlargement to Finland and Sweden, use of WMD - and Putin has always blinked.
He has proven to be a poor poker player and even worse tactician/strategist. He now has a losing hand and let’s just he realises sooner rather than later and folds."
https://timothyash.substack.com/p/time-for-a-mea-culpa-from-mearsheimer
26. "Right now, the greatest obstacle to the West providing all-out military and economic support to Ukraine is our inability to imagine a new power configuration in Eastern Europe — one that would rest on the NATO’s Baltic-to-Black Sea intermarium corridor of countries closely aligned with the U.S. And as Finland and Sweden gear up to enter NATO, Europe is on the cusp of a potentially transformative geopolitical reconfiguration, much like at the end of World War I.
The defense of Ukraine is not only about national sovereignty and territorial integrity — historically, the two foundational principles of democratic governance — but ultimately about pushing Russia out of Europe, thereby ending three centuries of its imperial drive. The independence of Ukraine, and by extension of Belarus — for, once Ukraine has defended its sovereignty and territorial integrity, Minsk wouldn’t remain in Moscow’s orbit for long — would end Russia’s claim to being a key “Eurasian power in Europe.”
https://www.politico.eu/article/ukraine-could-be-an-inflection-point-eu-us-west-war-russia
27. A sobering conversation. 2022 & 2023 is gonna be rough.
https://www.youtube.com/watch?v=Y33G8hVxJq4
28. Still early days but it's a challenging time for Axie Infinity.
"That Axie was widely viewed primarily as a way to make money has proven a major problem for its virtual economy. The game is designed to offer ways to both earn and spend SLP within the game. Any tokens spent within the game just disappear. But play-to-earners instead cash out all SLP by selling them on crypto markets, meaning the total number of tokens increases over time. The additional supply depresses prices, in a crypto version of hyperinflation. Players are constantly hounding Sky Mavis to tweak how the game works in ways that would reduce the amount of SLP in circulation.
Even before the broader collapse of crypto, Sky Mavis struggled to address the issues with Axie’s internal economy. A financial system consisting of people all hoping to put in $1 and take out $2 can last only as long as someone else shows up believing others will come in after them with more fistfuls of cash. Once Axie began looking less profitable, its ability to draw new players decreased, making it even less profitable and setting off a vicious cycle. “Axie has just been this fascinating tale of people learning hard lessons of economics and monetary policy in microcosm,” says Doucet."
29. Druckenmiller is an investing legend. So much to learn here from the best macro global investor in the last few decades.
https://www.youtube.com/watch?v=-7sWLIybWnQ
30. This is an interesting macro outlook described here to understand what’s happening.
https://www.youtube.com/watch?v=b5q1l3aJ-_s
31. "Is there a kind of money that is both programmable and outside money? If we were to consolidate all balance sheets in order to treat the economy as a single aggregate entity, all forms of credit would appear as both assets and liabilities, and hence would cancel. Is there a form of outside money — money that exists outside the matrix of economic relationships — while being programmable?
Once you frame the question in this way, the answer is obvious. Only crypto is money because crypto is both an asset that is not a liability and a programmable construct. Programmable gold."
https://brunomacaes.substack.com/p/only-crypto-is-money-the-new-monetary
32. Lessons from Hedge Fund King Dalio.
"[If I were] to pick countries [for foreign investments], there are three questions I’d ask:
Is the country earning more than it’s spending?
Does it have internal order where people are working well with each other to be productive?
Is it at risk of being drawn into an international war?
"It made me ask myself, “How do you know you’re right?” And I developed a principle: Pain + Reflection = Progress."
https://thehustle.co/a-chat-with-ray-dalio
33. I am a fan of Serbia, Slovenia and Croatia!
"The tiny Swiss town of Zug is the perhaps unlikely home to Europe’s “crypto valley”: almost 1,000 crypto startups are based in Switzerland, and half of them are in Zug.
But it might now have a contender for the crypto crown.
Crypto startups in Slovenia, Croatia and Serbia are attracting investment from some of the world’s most sophisticated investors, like Andreessen Horowitz, Tiger and Accel."
https://sifted.eu/articles/crypto-startups-europe-balkans
34. This is a great intro to Zeihan's new book. It's grim but important reading on the future economy and geopolitics.
https://www.youtube.com/watch?v=xRliA6bfhLg
35. I think the opprobrium that many people hold Saudi Arabia in is off. The place is changing for the better from what I've seen being there.
"These are the games that Biden is playing. They are the same ones that every president before him since 1945 has played. No matter what he says about the Saudi regime now, it’s clear whose interests will always come out on top. At least the Biden administration is finally abandoning the pretense that things will be any different. This is a time of crisis and we need the Saudi oil. The only question is what we will pay for it."
https://www.discourseblog.com/p/the-kingdom-always-wins
36. This is really damn good. All founders should read this.
https://chrisneumann.com/blog/you-keep-using-that-word
37. This is an important but disturbing discussion on the future of geopolitics. De-globalization.
https://www.youtube.com/watch?v=aK5kQ3mZddg
38. "Well, first of all, don’t assume that the price of some asset class going down means that money is “flowing” somewhere else in the economy. That just isn’t how it works.
And sometimes people will assure you that drops in asset markets don’t mean anything because no actual wealth was destroyed. But paper wealth is as “real” as wealth gets, and people whose assets get market down may cut back on spending, which affects the real economy.
Second, take wealth numbers with a grain of salt. Yes, the rich people are all actually rich, but the net worth numbers you read in the Forbes 400 or on Wikipedia are more like indicators than exact measures of how much stuff someone could buy."
https://noahpinion.substack.com/p/where-does-the-wealth-go-when-asset
39. For military history buffs. The Great Captain.
https://mobile.twitter.com/LandsknechtPike/status/1538098976691572738
40. "Still, San Francisco is a place that has a knack for rebuilding, whether after literal earthquakes or in the wake of the busts that followed gold rushes going back to the 19th century. It has an extraordinary capacity to attract fortune seekers and visionaries from afar.
That’s the case with the growing cohort of frisky Gen Z startup founders who are showing up now in San Francisco, Cotopaxi backpacks and business plans in tow. For them, San Francisco’s brand as the center of the tech universe remains intact. They are more than happy to link arms with the members of San Francisco’s old guard who still believe in it, and together prove that the city can still mint tech blockbusters."
https://www.theinformation.com/articles/san-francisco-is-back-sort-of-maybe
41. "The old broken business models in the financial markets are giving way to new ones just like the EP-3 improved into a P-8. This matters from a security perspective which is why the defense establishment is going to be getting even more involved in the tech sector. Why?
Because strong tech and strong economies are the keys to military superiority these days. The two go together. They always have. So, every time we have an incident in the skies you can be sure there will be more direct or indirect support for the tech sector on the ground. This recovery will be like the last - a terrifying nosedive followed by a newfound understanding of what is possible."
https://drpippa.substack.com/p/nosedives-and-recoveries
42. This dude is F--ing hero!
43. "What if we could have all the great taste of cooperation without the calories of trust? That’s the promise of crypto. Whatever you need validated, you put it on the immutable blockchain, and you have ground truth.
But beware of tech bros preaching decentralization. Technology has been promising to eliminate the middleman for decades, only to present new middlemen — in this case, new actors asking you to transfer trust and wealth from one institution to theirs. Crypto enthusiasts spent 14 years and tens of billions of venture capital dollars trying to create a trustless financial system with no middlemen. Status? See above: Celsius."