A. What happens in Monaco, doesn’t stay in Monaco….;-)
I was in Monaco for the annual club b conference (200 family offices), where Peter Fletcher (the organizer and previously CIO of the Parly Family Office) had me on a panel to discuss “What We Are Seeing From Family Offices”.
These are the three big ideas I discussed:
Given future returns will be markedly different from the past, how are family offices reacting: Future returns likely 9-10% in private markets and 5-6% for public equities, so seeing more barbelling of portfolios. More private markets and more cash. Greater exposure to PE and Venture and lower exposure to hedge funds and pubic equities.
How exactly is the move towards illiquid assets playing out: At this point, focusing on shortening the J-curve and lowering fees while they wait for a better cohort. What looks interesting to them in private markets is a mix of: uncorrelated assets (royalties, insurance, life settlements), growth equity & venture.
How are family offices changing: Biggest change are on the human side. Returns have underperformed the indices (hasn’t everyone though….) and expectations are high, so teams are being professionalized, standards raised, benchmarks set. At the same time influx of quality talent from PE firms and HFs, which costs more, which is leading to a desire to become regulated and raise 3rd party assets.
Ping me if you’d like to discuss in more detail.
B. I want to live forever…….
Many of you asked about what I’ve learnt from all my reading on longevity, and what we can do / take today to extend our healthy lifespan.
To be clear, there is nothing you can do today to live forever, but every extra year increases the probability that you will be alive when the real big breakthroughs will occur.
Here are the big ones to extend / maximize your life:
No. 1: SLEEP: Sleep is when the brain turns on a ‘washing machine’ type mechanism, where the fluid that bathes the brain is washed away and replaced. Sleep is also when short-term memory (things you learned that day) are converted into long-term crystallized memory. Poor sleep is one of the major risk factors for ALL age-related diseases, particularly Alzheimer’s and dementia!
Make sure you get eight hours ideally. If you have trouble sleeping, highly recommend you read Matthew Walker’s Book: Why We Sleep or check out podcast notes here.
No. 2: DIET: Sugar is the worst. Ideally NO sugar at all. Ideally NO “cheap” carbs like pasta, rice, bread. There is low micronutrient value to these ‘filler’ foods. Most people require some carbs, so focus on low-glycemic index carbs such as lentils/beans (well cooked, if you are not sensitive to plant lectins), tubers, vegetables, and oats. Minimize very sugary, high glycemic index fruits such as bananas or melons. If you must eat something sweet, eat it at the end of your meal, after a salad. The rate of absorption will be slower.
Best diet: High unsaturated fats, low glycemic index carbs, less than 20% calories from protein.
Definitely try intermittent fasting or calorie restriction of some kind.
No. 3: EXERCISE: Good mix of high intensity interval training (HIIT), weight training and stretching is best. Make time for 60-90 mins of physical activity daily - even a brisk walk helps.
No. 4: STATE OF MIND: Preserve and maintain a positive mindset, practice yoga, mindfulness, meditation. Have purpose and love in your life.
No. 5: SUPPLEMENTS: A handful key supplements do help, but focus on No. 1-4 before you take any supplements. I take Metformin, NR, Magnesium Citrate, Vitamin B12 and D. Note: Please consult your healthcare professional, I’m not a doctor and don’t intend to play one on the internet.
What about you ?
Key books to read on longevity and extending a healthy lifespan:
How Not To Die - Dr Michael Greger
Lifespan - David Sinclair
Juvenescence - Al Chalabi and Jim Mellon
Borrowed Time: The Science of How and Why We Age - Sue Armstrong
Regenesis - George Church
The Immortal Cell - Michael West
Transcend: 9 Steps to Living Well Forever - Ray Kurzweil and Terry Grossman
I just finished Roger McNamee’s book Zucked. Roger was one of the early investors in Facebook. He is the founding partner of the venture capital firm Elevation Partners. Prior to co-founding the firm, McNamee co-founded private equity firm Silver Lake Partners and headed the T. Rowe Price Science and Technology Fund.
Which is to say, he has street cred….
Here’s what’s interesting in his book (I’ll try summarize 350 pages….):
In his opinion, the activities of the big tech companies - notably Facebook, Amazon, Google - represent a danger to public health, democracy, personal privacy, competition and the structure of our economies.
According to him, using the work of Stanford behavioral scientist, B.J. Fogg, the big tech companies have moved from empowering users to treating us all as a source of fuel for their businesses. They seek to command our attention in order to manipulate our behavior. Habit becomes addiction. Notifications appeal to our need for rewards and social validation; we simply cannot ignore them.
Using the data we “give” them, they can create a perfect representation of our lives and sell this information without our knowledge or permission.
They play on our psychology / needs, especially our fight or flight impulse. They trigger this by creating fear or outrage - hate speech, conspiracy theories and disinformation. These are not accidental by-products of their business - they are its fundamental drivers.
What this means: the tech platforms grant disproportionate political voice to angry people….fear and hate get more attention, the algorithms optimize for that (I am simplifying). The impact of this on the world is that we get caught in our own filter bubbles that are addictive. Even if we hold-out personally and manage to avoid addiction, we are affected by the addiction in society - for example: on-line radicalization.
What can be done:
Use anti-trust law to break up the monopolies as we did in the past.
Place severe limits on the data economy, Roger would like an individual to have the choice to use their data to access a service.
End anonymity online. We need to find a way to authenticate online identities, to reduce the angry mob, but also reveal that the figures and reported incomes of the big tech companies are grossly inflated - because about one third of their ‘users’ are not real - think bots (if you remember from the last season of House of Cards).
A thoughtful book, with a lot of insight on the inner workings of the big tech companies, particularly Facebook.
D. A Few Things Worth Checking Out:
1. I’ve been reading Gregory Zuckerman’s “The Man Who Solved The Markets”, the story about Quant Investing and Renaissance Technologies, who have compounded at rates shown below. You can get the summary version at this WSJ article and this podcast he did on Masters of Business.
2. Daniel Ek, founder of Spotify was on the Invest Like the Best podcast to discuss the future of audio.
3. Ray Dalio was on the David Rubenstein show (thanks for the flag Victor).
E. Quotes I am thinking about:
"If you don't get what you want, it's a sign either that you did not seriously want it, or that you tried to bargain over the price."
- Writer Rudyard Kipling on the price of success
"We really like things that you don’t have to carry out to three decimal places, you know. If you have to carry it out to three decimal places, it’s not a good idea.... It’s like if somebody walked in the door here and they weighed somewhere between 300 and 350 pounds. I might not know how much they weigh, but I would know they were fat. That’s all I’m looking for, is something that’s financially fat."
- Warren Buffett
What have you found recently that is financially fat ?