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A Few Things: Focus, How To Read A Book, Incels, Why The West Won, News You Might Have Missed, The Coming Wave of AI, The Future of Venture Capital...
September 10, 2023
Hi, I’m Ahmed Husain, feel free to connect here on LinkedIn or here on Twitter. Every week, I share my view on developments across markets, technology and being a better human. I advise and work with global family offices and investors looking to understand the world and find investment opportunities.
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Quotes I Am Thinking About:
“Search for the seed of good in every adversity.”
- Og Mandino
"Enough courage to get started + enough sense to focus on something you’re naturally suited for + enough persistence to stay in the game long enough to catch a few lucky breaks + a lot of hard work. There’s your recipe."
- James Clear
“The only true wisdom is in knowing you know nothing."
"The road to success is dotted with many tempting parking spaces."
- Will Rogers (American stage & film actor)
“The man who has begun to live more seriously within begins to live more simply without.”
- Ernest Hemingway
“The only way to make sense out of change is to plunge into it, move with it, and join the dance.”
- Alan Watts
A. A Few Things Worth Checking Out:
1. Neckar had a great piece titled Focus: The Last Superpower?
When Warren Buffett and Bill Gates first met over dinner, they were asked what factor had been most important in their success.
“And I said, ‘Focus,’” Buffett recounted. “And Bill said the same thing.”
Focus has an inner and an outer dimension: focusing on what is important is macro focus. Staying focused on the task is micro focus.
I watch this video about focus monthly:
Some ideas for focus:
Nootropics — a big word for supplements that support focus and cognitive function.
Rest. I’m a big believer in short naps.
Exercise, yoga, walks, and nature.
Setting timers and rewards. I limit myself to 120 mins to write this email weekly.
Sound and music
2. Author and bookstore owner Ryan Holiday is a voracious reader. He’s compiled a list of 38 rules to make book-reading more rewarding.
In every book you read, try to find your next one in its footnotes or bibliography. This is how you build a knowledge base in a subject — it’s how you trace a subject back to its core.
Don’t just read books, re-read books. There’s a great line the Stoics loved — that we never step in the same river twice. The books don’t change, but you do.
Ruin the ending. I almost always go straight to Wikipedia and figure out the plot — especially if I am reading something tough like Shakespeare or Aeschylus. Who cares about spoilers? Your aim as a reader is to understand WHY something happened, the what is secondary.
Incels is a slang term for a member of an online community of young men who consider themselves unable to attract women.
Key bits, emphasis mine:
Western security agencies are worrying about a new threat — from incels, male “involuntary celibates”. Incels made it into July’s update to the British government’s counterterror strategy. US and Canadian intelligence services were already fretting. Killer incels emerged as a phenomenon in 2014.
In China and India, abortion of girls and some female infanticide have created what Lindner calls “a staggering excess of 70 million men who will be unable to find a female partner”. In the US in 2019, 28 per cent of young men hadn’t had sex with a woman in a year, up from about 10 per cent a decade earlier, reports the General Social Survey run from the University of Chicago. In a national survey of Japanese aged 18-34 in 2016, 42 per cent of men reported being virgins.
Part of the problem could be dating websites. Rather than leading to sex, they may be replacing sex: users can get their kicks flirting online without ever meeting anyone in real life. Lindner identifies a bigger trigger for inceldom: female autonomy. Now that women can have good careers, are often happily single and less likely to be exclusively heterosexual, many don’t need men — certainly not low-status men. Lindner cites evidence that females are sexually pickier than males. In one study, “women rated 80 per cent of men’s attractiveness as below average”. Those women who want casual sex tend to seek it among the handsome, well-paid, well-educated “Chads”. One study found that a man in the top percentile of attractiveness receives 190 times more likes on dating apps than a man in the bottom 50 per cent.
The typical incel response isn’t murder but misery. In a poll on the incel.co forum, 68 per cent of respondents reported experiencing “long-lasting” depression. An exacerbating factor is that “many incels are thought to be on the autistic spectrum”, notes Sugiura. “It is unfair to suggest the whole incel community is centred towards violence and hatred,” she writes, “when it is mostly concentrated on self-loathing.”
My summary of it:
A. World Order: As the world gravitates towards a multipolar order, a tug-of-war between China and the US unfolds. The US bolsters its military presence in Europe, emphasizing a growing US-Russia antagonism. China’s influence is noticeable but remains tethered to economic concerns.
B. China's Economic Struggles: Post-COVID, China's economy shows signs of a balance sheet recession, reminiscent of post-Global Financial Crisis Europe and the US. The private sector, burdened with debt, is curbing domestic demand. While monetary measures, like rate cuts, have been implemented, they prove insufficient. Significant fiscal stimulus, akin to past infrastructure projects, is necessary to stabilize growth.
C. US Economy & Federal Reserve's Stance: Contrasting China's situation, the US economy remains resilient, outperforming early 2023 expectations. Despite signals of rate hikes, the Fed's window to tighten further seems limited, especially with the impending elections. Political dynamics suggest that more rate hikes could be unfavorable.
D. Implications for Investors:
Emerging Markets: The global emphasis on infrastructure and green energy signifies the onset of a significant capex cycle, likely bullish for commodities and select emerging markets like Brazil, Indonesia, Vietnam, and Mexico. China's economic trajectory, however, casts a shadow on this potential boom.
US Tech Sector: The trend may be temporary unless narratives around AI capabilities keep the momentum.
Europe & Japan: While positioned well in sectors expected to prosper, their economies' ties to China's performance are undeniable.
The capex cycle's promise remains strong, with potential deviations along the way. However, China's decisions will play a pivotal role in determining global economic dynamics. As narratives shape investments, investors should be wary of oversimplifications and remain adaptable to the evolving geopolitical landscape.
B. Why The West Won:
Picture Ian Morris' book "Why the West Rules—For Now" as a time-traveling journey that decodes the DNA of global power.
Professor Ian Morris is a renowned historian and archaeologist with a distinguished career at Stanford University. A Cambridge alumnus, Morris is celebrated for his interdisciplinary approach to understanding human societies.
He uniquely combines archaeological data, historical records, and statistical analyses. A prolific author and speaker, Morris's insights into the patterns of human civilization are influential and widely recognized.
There are many books that try to explain the past and predict the future of countries and empires based on Geography: think Peter Zeihan’s Disunited Nations or Tim Marshall’s Prisoners of Geography.
Or based on Sociology: think Francis Fukuyama’s The End of History and the Last Man or Sam Huntington’s The Clash of Civilizations and the Remaking of World Order.
Or based on Biology: think Jared Diamond’s Guns, Germs and Steel or Yuval Hariri’s Sapiens.
Ian Morris tries to bring together geography, sociology and biology into one narrative.
Here is presenting his thesis in 5 minutes:
To begin, Morris introduces us to a unique tool, the "Social Development Index," almost like a stock market index for civilisations. It tracks the rise and fall of societies based on factors like technology, military strength, and governance.
The West had a head start, fueled by geography, the Industrial Revolution, and the Enlightenment. It's as if the West found a cheat code for rapid development. But now, the East has entered the same cheat code. The rest of the world is not just catching up; it's like a tech startup with tremendous growth potential, threatening the monopoly of an established conglomerate.
And here comes the twist—Morris talks about a "singularity,"(based on Ray Kurzweil’s work) a future where technological and social advancements could explode at an unprecedented pace.
What's the bottom line for investors?
Morris isn't just offering history lessons; he's giving you a crystal ball. His book is a wake-up call that tells you: diversify and be globally alert. Your investment strategy needs to be as dynamic and adaptable as the world's shifting power landscape.
Let’s jump into the three key parts of Morris’ thesis: geography, biology and sociology:
Geography plays a pivotal role as the initial factor that set the trajectories for Eastern and Western civilisations. According to Morris, geography was instrumental in determining access to natural resources, navigable rivers, fertile lands, and defensible positions, all of which contributed to the early growth and development of societies.
For instance, the availability of fertile lands in Mesopotamia and the Nile Valley allowed for the development of agriculture, which in turn led to the formation of some of the earliest complex societies in the West. Similarly, geography influenced the East, but the initial conditions led to a slightly later development of comparable societal structures.
Geography also affected trade routes, cultural exchange, and the spread of technology. These elements are key components of Morris' "Social Development Index," which he uses to track the progress of civilizations. In essence, geography set the stage upon which all subsequent social, political, and technological developments took place.
However, it's important to note that while geography set the initial conditions, Morris argues that it isn't the sole determinant of a civilization's fate. Over time, human agency, innovation, and other factors come into play, potentially reshuffling the deck in terms of global power dynamics.
So, for Morris, geography is like the opening act of a play, setting the scene and introducing the characters, but not dictating the entire storyline. It's the foundational element that helps us understand the starting positions of the East and the West in the long race of social development.
Biology plays a more nuanced role compared to geography. While the book does not heavily focus on biology, the implication is that biological factors like disease resistance, adaptability, and even cognitive development have had indirect but profound impacts on social development over time.
For example, the spread of diseases often followed trade routes and colonization paths, affecting the rise and fall of civilizations. The impact of diseases like smallpox in the Americas is a well-known example of how biological factors can drastically alter the course of history.
Additionally, human adaptability, a biological trait, allows societies to make the most of their geographical settings. The ability to adapt to diverse climates, altitudes, and landscapes has had a significant impact on a society's ability to grow and expand, whether it's the early Mesopotamians learning to irrigate arid lands or Pacific Islanders mastering navigation techniques to colonize distant lands.
Biological factors also affect social structures, including kinship systems, social cohesion, and even the formation of early governments. These factors, while harder to quantify compared to geographical resources, are woven into the fabric of social development, influencing everything from technological innovation to military strategy.
While biology is not the central focus of Morris' theory, it serves as an underlying layer that interacts with geography, culture, and human agency to shape the course of civilizations. It's like the backdrop against which the drama of human history unfolds, influencing but not dictating the course of events.
Sociology is crucial for understanding the development and organisation of societies over time. Sociology helps explain how social structures, institutions, and norms evolve, and how they contribute to a civilization's overall 'score' on the Social Development Index that Morris devises. This index quantifies aspects of society such as technological prowess, military capability, and the complexity of social organization, providing a way to compare Eastern and Western civilizations over millennia.
Sociology allows Morris to delve into the nitty-gritty of how societies actually work. For example, why do some societies develop democratic institutions while others lean toward authoritarianism? How do cultural norms around work and family contribute to economic growth or stagnation? Why do some societies have more effective military structures, and how do these interact with other aspects of society like technology and economy?
The sociological lens also helps Morris explain transitions and tipping points in history. For example, how did the Enlightenment’s social and intellectual shifts contribute to the West's surge in development? Or how did Confucianism shape the social and ethical fabric of Chinese civilization, influencing its development trajectory?
Implications for Investors:
Broad Perspective: The vast sweep of history Morris covers underlines the importance for investors of taking a long-term, macro perspective. Understanding the broad trajectories of societies can help investors anticipate major shifts in global economic power.
Geography Matters: Investors might consider geographical advantages when evaluating the long-term potential of emerging markets. Countries or regions with geographical advantages could, in theory, have a leg up in the race of social and economic development.
Cultural Adaptability: Given that Morris believes societies will adapt culturally to advance their social development, investors might look for signs of cultural adaptability in markets. Societies that are more open to changing cultural norms for the sake of progress might be better bets for long-term growth.
Implications for Citizens:
Stay Adaptable: The notion that cultures which adapt and change to improve social development thrive suggests that citizens should remain adaptable, open to new ideas, and willing to evolve in the face of changing circumstances.
Understanding Global Shifts: Recognizing the significant role of geography in shaping societal destinies can help citizens better understand and anticipate global shifts in power and influence.
Appreciate the Long View: By understanding history's long arcs, citizens can gain a more nuanced perspective on current events, recognizing that today's dominant powers may not always remain so, and vice versa.
Here is Prof Ian Morris presenting his thesis:
C. Charts and News You Might Have Missed:
1. Taylor Swift’s ‘Cruel Summer’ surpassed 1 billion streams on Spotify just after she became the first female artist on the platform to reach 100 million monthly listeners, behind only The Weeknd.
Now coming to a movie theatre near you:
2. Diamond prices are in free fall in one key corner of the market. De Beers has been forced to cut prices aggressively for one of its benchmark products. One of the world’s most popular types of rough diamonds has fallen, as an increasing number of Americans choose engagement rings made from lab-grown stones instead.
Diamond demand across the board has weakened after the pandemic, as consumers splash out again on travel and experiences, while economic headwinds eat into some luxury spending. However, the kinds of stones that go into the cheaper 1- or 3-carat solitaire bridal rings popular in the US have experienced far sharper price drops than the rest of the market.
3. Nearly half of Americans age 18 to 29 are living with their parents.
4. Novo Nordisk (on the back of it’s GLP-1 drugs) is on it’s way to becoming the largest company by market cap in Europe and Prof Galloway discusses it as the most under reported story of the summer (starts 5 mins in).
D. The Technology Section:
1. Mustafa Suleyman, co-founder of DeepMind, and now the co-founder of Inflection AI and author of the just released book: The Coming Wave, was on Bloomberg TV discussing the pace of AI Innovation.
2. If you want to go deeper with Mustafa on all things AI, check out his conversation with Prof. Scott Galloway (action starts 20 mins in), where he discusses his new book, “The Coming Wave: Technology, Power, and the Twenty-first Century's Greatest Dilemma.”
Mustafa shares what to expect in the coming years and decades as AI gets smarter, why we’re not prepared for the coming wave of technology, and how Inflection AI wants to build the next version of a personal assistant.
3. Nicolai Tangen at the Norges Bank spoke with Sam Altman of OpenAI about how Sam envision’s a world where humans and AI coexist? How far into the future can he see, and when will AI completely change the way we live?
Deep conversation between two smart people.
Erik Torenberg at Village Global spoke to Sam Lessin at Slow Ventures about why the factory system of venture capital is over, why the next generation of great businesses are going to be like constellation software.
Thank you Jihan.