A Few Things: Signal vs Noise, The Best Career Decision, 10 Habits of Successful VC's, Dalio on Cycles of History, Understanding the Energy Crisis, How Not To Die, The Future of Facebook......
August 4 2022
Welcome to those of you who joined last week based on Ted Seides recommendation. Thank you Ted. It’s great to have all of you here.
To the rest of you, 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: How To Read, What We Got Wrong About E-commerce, Is This a Recession?, Niall Ferguson on The Politics of Catastrophe, Seize The Day....
Quotes of the week:
“In a bear market, this is what is most important: not making mistakes. The goal is to conserve capital. When a long bear market finally ends, those with cash will find bargains galore.”
- Maggie Mahar (“Bull!”)
“Decide whether or not the goal is worth the risks involved. If it is, stop worrying.”
- Amelia Earhart
“The secret of getting ahead is getting started.”
- Mark Twain
“The main thing is to keep the main thing the main thing.”
- Steven Covey
“Things that matter most must never be at the mercy of things that matter least.”
- Johann Wolfgang von Goethe
“If you are ever tempted to look for outside approval, realise that you have compromised your integrity. If you need a witness, be your own.”
- Epictetus
"Time will multiply whatever you feed it. Good habits make time your ally. Bad habits make time your enemy."
- James Clear
A. A Few Things Worth Checking Out.
1. We are inundated with information. It’s everywhere. One of the most important skills we need in the 21st century is Finding the Signal in the Noise.
Shane Parrish at Farnam Street covers 7 “Tricks” for Evaluating Information, and ends with: A large part of wisdom is knowing what to ignore. A large part of expertise is knowing where to place your attention.
2. This Is The Best Career Decision You Can Possibly Make according to Ryan Holiday. This is something I got wrong for a while.
3. Ten habits of some of venture capital’s most successful firms according to The Generalist. Great, simple short article with a lot of wisdom, probably the same things you would pick up from Sebastian Mallaby’s book.
4. Many of you have been reading Ray Dalio’s new book, I am probably not going to read it even though I enjoyed Principles.
But I found his conversation with Tony Robbins on “What cycles of history can teach us now” helpful. They cover a lot of ground on what to expect from here.
Bridgewater also had a research piece this week on: Transitioning to Stagflation.
It reminded me of the classic, which is a must read, and should be assigned reading in all schools:
5. Macro Voices Podcast had Adam Rozencwajg of Natural Resource Investment Firm Goehring and Rozencwajg on: Understanding the Global Energy Crisis [starting at the 17:09 mark]. They also produce great research that you should sign up to.
Bottom line: Very bullish commodities.
6. Probably the most important charts an investor needs to know:
7. A really great thread on life. Highly recommended.
8. On where we stand in markets, everything worth saying is better said by my friend Bobby Vedral, quoting him below:
I’m firmly in the Bull-Trap camp. Here is why: (1) Upside is capped: As equity markets rally, financial conditions ease, which triggers Fed hawkishness. Notice that US financial conditions are now EASIER than when the Fed started hiking in June. (2) Inflation: with CPI at 9.1% we might have seen ‘peak inflation’ but what matters for the ‘terminal Fed Funds’ is where inflation settles and becomes sticky. I believe higher inflation is structural (energy transition, demographics, resilience economics) and will settle in the 4-5% postcode for a while. Which means that Fed Funds at 2.5% are far from ‘neutral’. (3) Legacy: Powell’s Fed has first misjudged inflation and then has been slow to respond. So far, he is more Arthur Burns than Paul Volcker. Given that Powell identifies with the latter, the playbook is clear: positive real Fed Funds. We are at -6% now, so nowhere near what is required. (4) Selective hearing. Last week the market celebrated Powell supposed dovish pivot (hikes to slow) but ignored his many references to the June SEP (Summary of Economic Projections) which indicate higher Fed Funds in 2023, not cuts as the market is pricing in. The same is happening on the data front: the market celebrated weak GDP numbers (recession = rate cuts), but ignored worrying inflation/wage data the next day. (5) We have no idea how QT works. In September Fed balance sheet reduction will ramp up to $95bn/month (= 2x current pace). Can’t see QT being a tailwind for risky assets.
Bottom line: the Market is betting on a path of monetary policy that is inconsistent with a return to 2% inflation and is only making the Fed’s job harder. Good luck.
9. This was a fun trip down memory lane. These were the top earners on Wall Street 30 years ago. It’s amazing how many are still in the game. That’s Stamina.
10. I was on a boat with a great friend earlier this week in the South of France (Thank you Thomas), and it made me think of just how different the holiday culture is in Europe vs the US.
The Americans are missing something, but it’s cultural and hard to budge. It took me years to figure this out when I moved to Europe 11 years ago after 14 years in the US.
B. How Not To Die
I was re-reading one of my favourite longevity books. It’s a great discussion on all the things you can do around your diet to slow down aging.
Aging and Longevity is something I have been geeking out on for a while and both Dr. Michael’s book and David Sinclair’s book is one of the best. Another good one on the core science is Juvenescence by Jim Mellon.
One amazing statistic on longevity by the way: our bodies are in a state of continuous regeneration. On an annual basis, 95-98% of our bodies are completely new.
One of the great charts from David Sinclair’s book:
What it shows is that (emphasis mine):
United States spends hundreds of billions of dollars each year fighting cardiovascular disease. But if we could stop all cardiovascular disease - every single case, all at once - we wouldn’t add many years to the average lifespan; the gain would be just 1.5 years. The same is true for cancer; stopping all forms of that scourge would give us just 2.1 more years of life on average, because all other causes of death still increase exponentially. We’re still aging, after all.
Aging in it’s final stages is like a fast sprint over an ever-higher and ever-closer set of hurdles. One of the hurdles will eventually send you for a tumble. Take away one hurdle, and the path forward is really no less precarious. That’s why the current solutions, which are focused on curing individual diseases, are both very expensive and very ineffective when it comes to making big advance in prolonging our healthspans. What we need are medicines that knock down all the hurdles.
David’s thesis combines the latest in genetics and epigenetic work with Claude Shannon’s original Information Theory (that the internet is built on top of) to arrive at the Information Theory of Aging.
Two key terms to know about aging:
Horvath clock - your body’s epigenetic clock
Yamanaka factors - ability to take our cells to their original pluripotent stem cell state.
Great 18-min talk by David Sinclair to get the gist of his book:
One of the best resources I found was a podcast with Peter Attia and David Sinclair - it’s a bit heavy on the science.
Here are the big ones to extend / maximise your life based on my readings:
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 crystallised 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. Minimise 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 have tried Metformin, NR/NAD+, Magnesium Citrate, Vitamin B12 and D. But at the moment I’m only taking Magensium, Turmeric and Collagen.
Dr. David Sinclair was on the Knowledge Project podcast discussing “Reversing the Aging Process” earlier this year.
He went in-depth on the process of aging and the techniques you can incorporate into your life that help you live a longer, healthier life, including optimising your diet, the benefits of exercise, the role of a positive attitude, the importance of sleep, the three supplements he takes every day, why it’s never too late to slow the process of aging.
Disclaimer: I am not a doctor and don’t intend to play one on the internet. This is purely for informational purposes and am not recommending any supplements or products. Please do your own research and consult a professional.
C. The Tech and Crypto Section:
1. Great piece on Meta / FB according to Ed Zitron.
Key section below (emphasis is mine):
Meta’s platforms have become so utterly disconnected from the reasons that they were originally successful that I am not confident that their management will be able to stop the bleed. I’m not suggesting they will die, but Facebook’s (and to a lesser extent Instagram’s) dominance is going to dwindle dramatically. This is in large part due to Meta’s inability to understand actual human beings - while TikTok’s algorithm is malevolent in a way I can’t put my finger on, it feels like it shows you things you want to see - is their downfall, which is why they are seemingly in a constant state of damage control trying to make their users feel less angry rather than happy.
Despite Meta’s massive war chest and hordes of tech talent, they are bereft of vision or meaningful creative force. They do not seek ways to make users do the things they love more - they look for ways to manipulate them into ways that make Meta money, offering nothing in exchange other than the vague suggestion that leaving this platform would upset their friends, or abandon their fans. Meta is a knock-off company incapable or unwilling to double down on the things that people like because the numbers don’t immediately jump upwards.
Meta is an ugly, boring company, selling people products they at best sort-of-kind-of-want in a way that they hate. If Zuckerberg had any sense, he would step down and hand the reins over to somebody younger, hungrier and more creative. He’d shut down Reality Labs and admit the Meta thing was a huge, stupid mistake, perhaps spinning out Oculus again. Whatever nebulous growth metrics suggest this company is a suggest fail to evaluate exactly how lifeless it is and how far it has strayed from making products that people actually enjoy.
2. Invest Like the Best had a great crypto episode on Searching for White Space with Alok Vasudev. Alok is an early-stage investor who has been in the crypto space for a very long time. Before co-founding Standard Crypto, he was an investor at Benchmark and S28 Capital.
If you are new to crypto, this is a good one, since they cover:
How he would address crypto skeptics broadly given today’s market.
Why the US doesn’t digitize the dollar and how being a government entity would impede some of their capabilities.
The notion of productive speculation and what it means.
Thoughts on the world of art, IP, NFTs, and its changing landscape.
What he’s most bullish and bearish on right now
3. The downside of crypto: Play-to-Earn games like Axie Infinity was meant to rescue the Philippines, it seems to have done something totally different.
P.S. If you enjoyed this, please hit the like button.
Hey Ahmed... hope all well mate. Enjoyed this piece.... I liked the summary on the bull trap case. Im holding a similar view....lets see! Keep up the excellent sharing that you do!