A Few Things: Finding Your Why, Fareed Zakaria on the Middle East, Iran's Role, Backlash on Climate Change, Material World, News and Charts You Missed, What's Next In AI and Crypto....
October 20, 2023
I am sharing this weekly email with you because I count you in the group of people I learn from and enjoy being around.
You can check out last week’s edition here: Views on Markets, Are Free Markets History?, Sam Harris Morality, Reframe Your Brain, End of Times, News You Might Have Missed, State of AI Report, LLMs for Dummies...
Believe it or not, that “♡ Like” button is a big deal.
Quotes I Am Thinking About:
"Every moment there are a million miracles happening around you:
a flower blossoming, a bird tweeting,
a bee humming, a raindrop falling,
a snowflake wafting along
the clear evening air.
There is magic everywhere.
If you learn how to live it,
life is nothing short of a daily miracle."
- Yoga teacher and spiritual leader Sadhguru on the miracles of daily life
“I always say that the best way to get what you want is to deserve what you want.”
- Charlie Munger (1998)
“Success is the sum of small efforts—repeated day in and day out.”
- Robert Collier
“It’s impossible to please everyone. The question is whether you’re disappointing the right people.”
- Adam Grant
“All of our miseries are nothing but attachment.”
“It is not a lack of love, but a lack of friendship, that makes unhappy marriages.”
- Friedrich Nietzsche
A. A Few Things Worth Checking Out:
1. This one made me cry so sharing a second time. Always eloquent Simon Sinek and Molly Bloom engage in a conversation discussing finding your WHY, Why Leaders Eat Last, Fear and Healing.
Lots of wisdom here and I just love how Simon communicates.
2. Scott Galloway spoke to Fareed Zakaria, he’s the host of Fareed Zakaria GPS on CNN and a columnist for The Washington Post. He breaks down the conflict in Israel, including the historical context that is needed to know and the implications that are to follow within the region and around the globe.
Timestamps 00:00 Intro 01:00 What happened in Israel and why now? 05:50 Is this a result of a more fractured Israeli government? 08:11 Has Hamas succeeded in putting a wedge between Saudi Arabia and Israel? 11:48 Will this war reverse the West's feelings towards Palestine? 15:09 What are the long-term solutions? 19:28 What does this war mean for geopolitical relationships? 22:37 What impact does this conflict have on the war in Ukraine? 25:44 Was going into Iraq one of the US's biggest geopolitical mistakes? 27:58 Is a relationship with MbS a positive for the West? 31:32 Are Saudi Arabia and India the swing states in whether the West prevails on global stage? 33:17 Where does America stand economically and politically? 36:20 Is Biden the only viable candidate for the Democrats in 2024? 38:13 Advice to younger parents? 39:48 Thoughts on CNN and where you may go from there?
3. In Episode 332 of Hidden Forces, Demetri Kofinas spoke with geopolitical analyst and forecaster Kamran Bokhari. Kamran is the Senior Director of the Eurasian Security & Prosperity Portfolio at the New Lines Institute for Strategy & Policy and has served at the U.S. State Department and as a Senior Consultant with the World Bank.
They discuss the escalating violence in Israel and Gaza Strip.
They review the role Iran may have played in helping plan the attacks, and whether or not we can expect Hezbollah to open a second front of attack in the north of Israel, as well as other potential pathways of escalation that could rope in the United States and turn this into a larger, regional conflict.
In the second hour (paid), they look at how the events transpiring in the Middle East fit into the fragmentation of the liberal rules-based international order and the emergence of a new multipolarity where nation states will seek to resolve long-standing border or ethnic disputes by force as everyone jostles to reposition themselves favorably ahead of the emergence of a new status quo.
If you have a short attention span, this is Kamran on BBC for 5 mins.
4. Last week’s Economist had a timely piece titled: The global backlash against climate policies has begun.
The big idea:
There is a growing global backlash against climate change policies, led by populist politicians and movements. They argue such policies are too costly, inconvenient, and being imposed by out-of-touch elites.
Public belief in climate change as a threat has increased, but willingness to pay higher taxes to address it remains low. There is a growing partisan divide, with conservatives far less likely to see climate change as a serious issue.
The pace of green innovation needs to accelerate to ease public grumbling. But if backlash slows climate action, that makes innovation harder due to higher interest rates and uncertainty.
5. Enjoyed this Todd Combs conversation. Todd is an Investment Manager at Berkshire Hathaway and CEO of GEICO.
Highlights from the conversation with Todd Combs, courtesy of Neckar.
1) Great investors are weird and love the process:
When Combs started his fund, he indulged his curiosity:
The first six months, it was just me. I printed off 24 securitization documents that are hundreds and hundreds of pages long. Countrywide, Washington Mutual. I literally had them all over my office, and I would sit there until late hours of the night, figuring out which tranche of these securitizations was going to get blown through. That's a weird individual that wants to go do something like that.
I always, always, always love the process. That's where my mind goes.
2) We are all wet cement:
Every single person underestimates how much their life is going to change going forward. Every single person at every age of your life. I would be doing it now, and you do it when you're 40, 50, 60, 70. You constantly think, oh, I recognize that there's been a lot of change. And I realize that I'm different than I was, but now I'm set. People don't realize that it's constantly wet cement. They think that the cement is dried, and it doesn't.
We are all constantly changing and evolving which makes setting goals so tricky. To Combs, “that's a freeing concept.” The world becomes your playground for exploration.
You just have to be open. You have to be open to experiences and curiosity.
3) To compete, you need to love the game. To decide whether to compete, you have to deeply know yourself and your own passions:
Whatever you want to do in life, you don't solve for money, you don't solve for prestige or adulation or anything like that.
In a highly competitive game, you’re not going to reach the top unless you love playing the game.
6. Kuppy and Louis-Vincent Gave share where they see opportunity in this uncertain macroclimate.
Harris “Kuppy” Kupperman, founder and CIO of Praetorian Capital, and Louis-Vincent Gave, CEO of Gavekal Research share their global economic outlook and why they think a boom is coming for emerging markets and uranium.
7. If you are Uranium curious, then listen to Why Institutional Investors Should Consider Uranium with Kieran Cavanna hosting Daren Heitman, and Chris Gillespie, from Azarias Capital Management.
B. Material World
I was at the Cliveden Literary festival a few weeks back and heard Ed Conway, author of Material World - Ed Conway discuss how humanity’s past and future is tied to resources. Bought the book on the spot and just finished it and recommend it highly.
It’s in a similar vein to Vaclav Smil’s “This is How the World Works”, which we discussed here in July 2022.
The book is divided into six chapters, each focusing on one of the six essential materials: sand, salt, iron, copper, oil and lithium. He takes the reader on a journey across the globe, visiting the places where these materials are extracted, processed and used. He also traces the historical and cultural significance of these materials, showing how they have shaped human civilization and culture throughout the ages.
In the first chapter, he explores the world of sand, which is the most abundant and versatile material on Earth. He explains how sand is used to make glass, concrete, silicon chips and many other products that we rely on every day. He also reveals the environmental and social impacts of sand mining, which is depleting the world’s beaches and rivers, and causing conflicts and violence in some regions.
In the second chapter, he examines the role of salt in human history and health. He describes how salt was once a precious commodity that was used as a currency, a preservative and a flavour enhancer. He also explains how salt is essential for life, as it regulates our blood pressure, hydration and nerve impulses. He also discusses the dangers of too much or too little salt in our diets, and how salt consumption affects our health and well-being.
In the third chapter, he investigates the importance of iron in human development and innovation. He shows how iron is the most widely used metal in the world, and how it has enabled the creation of tools, weapons, machines and structures that have transformed our society. He also explores the scientific and technological advances that have made iron stronger, lighter and more efficient, such as steelmaking, metallurgy and magnetism.
In the fourth chapter, he delves into the world of copper, which is one of the oldest and most versatile metals in human history. He illustrates how copper has been used for various purposes, such as art, jewellery, plumbing, wiring and electronics. He also explains how copper is essential for electricity generation and transmission, as it is one of the best conductors of electricity. He also examines the challenges and opportunities of copper mining and recycling, as well as the potential of new copper-based materials.
In the fifth chapter, he explores the impact of oil on human civilization and environment. He recounts how oil was discovered and exploited in different parts of the world, and how it has fuelled economic growth, industrialization and globalization. He also analyzes the environmental and geopolitical consequences of oil dependence, such as pollution, climate change, wars and conflicts. He also discusses the alternatives to oil, such as renewable energy sources and electric vehicles.
In the sixth chapter, he looks at lithium, which is one of the most sought-after materials in the modern world. He describes how lithium is used to make batteries that power our smartphones, laptops, electric cars and other devices. He also reveals the challenges and opportunities of lithium extraction and production, as well as the social and environmental impacts of lithium mining in countries like Bolivia, Chile and Argentina.
The book concludes with a reflection on the future of these six materials, and how they will shape our society in the coming years.
He argues that we need to be more aware of our material consumption and its consequences, and that we need to find more sustainable ways of using these resources. He also suggests that we need to embrace innovation and creativity to discover new materials that can improve our lives.
What makes the book particularly fascinating is that it reveals the hidden marvels of the material world and creates a compelling narrative combining history, science, culture and politics to tell the story of human civilisation through six essential substances.
You will never look at materials in the same way ever again after reading it.
To get a summary of Ed’s work you can listen to him on Bloomberg UK’s Merryn Talks Money podcast titled: The Inconvenient Truth About Reaching Net Zero.
They also did a short 5-part BBC Radio series you can listen to.
Here he is at the Cliveden Festival alongside Jonathan Maxwell, who’s book The Edge I am starting soon.
C. Charts and News You Might Have Missed:
My favourite 3:
2. SEC announced it was adopting new, long-anticipated rules intended to add transparency to the world of short selling.
Due to its mechanics, short selling performed on a large scale can artificially lower share prices. Insufficient public disclosure around large short positions thus creates a blind spot that could harm investors. The new rules adopted by the SEC will require institutional money managers, including hedge funds, to report large short positions to the SEC once a month.
The SEC will then publish an aggregated snapshot of the data, giving investors a monthly view of which companies are being shorted (but not by whom). Meanwhile, the rule also will collect data about the terms at which short sellers borrow shares in order to execute short trades. The goal is to provide transparency on pricing in the securities lending industry.
3. Stanford’s $40.9 billion investment fund returned 4.4% during the 12 months ending June 30, say reports. The fund, which includes Stanford’s endowment of more than $36 billion, outpaced returns of less than 2% at Yale and the University of Pennsylvania during same period. MIT meanwhile posted a loss.
4. The number of job listings looking for generative AI skills has boomed by more than 1,800% in 2023. The debut of OpenAI's ChatGPT sparked a rush to hire employees with AI talents.
5. It’s become increasingly evident that 2 parallel AI universes are forming between the US and China. While the US has spawned notable players like OpenAI and Anthropic, China has its own emerging candidates. One of these foundation model developers, Zhipu AI, announced that it has raised 2.5 billion yuan ($340 million) in total financing to date this year.
D. The Technology Section:
1. Raoul Pal of Real Vision & Jordi Visser of Weiss Adviser Talk AI, Crypto, the Economy, Elon’s Mars Plans….
Worth a listen, they cover:
Why exponential growth themes have killed Raoul’s interest in oil and currency markets [12:41]
What is the relationship between abundance and scarcity, and how does it affect the concept of a recession? [26:20]
What is the role of AI in the future of business start-ups and its relation to decentralization? [47:17]
Why are Jordi and Raoul so bullish on crypto heading into 2024? [51:33]
2. The demand for AI inferencing is set to far surpass the market for systems to train large language models (LLMs). Inferencing refers to asking trained AI models questions and getting newly generated responses. As LLMs like ChatGPT proliferate, the computational load from widespread inferencing will eclipse model training needs.
Inferencing has a massive energy footprint, so solutions optimized for efficient edge computing will emerge as winners. Specialized inferencing accelerators located closer to devices, rather than in centralized data centers, are key to reducing latency and costs.
Companies providing hardware and software tools purpose-built for efficient, low-latency inferencing are poised for significant growth. Leading candidates include Nvidia for its specialized AI chips, AMD for its GPUs and CPUs optimized for inference, Marvell for its networking chips enabling edge inferencing, and Arm for its processor IP used in many AI chips.
The shift from AI training to inference represents a major disruptive trend. Firms facilitating more economical and distributed inferencing will benefit most as demand for generative AI skyrockets globally.
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Have a great weekend.