A Few Things: Warren Buffett, GS on Commodities, Wisdom of Intuition, Scaling AI, BTC for everyone, Extreme Ownership and Something Personal......
April 16 2022
I am sharing this weekly email with you because I count you in the group of people I learn from and enjoy being around.
“Wise men speak because they have something to say, fools because they have to say something.”
“Sometimes the most important things in a man's life are the one's he talks about the least.”
- Louis L'Amour
"Not till we are lost....do we begin to find ourselves"
- Henry David Thoreau
A. A Few Things Worth Checking Out:
1. Warren Buffett sat down for a new interview with Charlie Rose.
2. Odd Lots Podcast: Jeff Currie of Goldman Sachs on the ‘Volatility Trap’ Keeping Commodity Prices So High.
Currie estimates that we are just in the second inning of the Commodity bull market it. The issue that he characterises is a "volatility trap" that's keeping investment on the sidelines, despite surging prices of spot commodity prices. He explains how far commodity prices can go, what the challenges are to inducing further investment, and what policies could help bring things into balance.
These charts from the recent Zoltan Pozsar were useful in thinking about the interconnectivity of the system.
And an interesting one from Marko Papic:
3. Russell Napier was on the Hidden Forces podcast speculating on what the new order that is now being born will look like, how it will operate, and what its implications will be for economies, industries, portfolios, and the role of the dollar in the new, international monetary system.
The big idea I walked away from this is that: Debt expansion is now limited and will flow to where the authorities / governments want it to go. We have too much debt so it must be rationed. We will now live in a world where the government will decide for geopolitical reasons who will win, who will lose and where capital will flow. This is a world of suppression and repression of returns on capital.
The folks he think will suffer in this market are those that have been:
Doing financial engineering?
Companies that have just grown EPS by levering and buying back shares?
While those that will benefit are:
The industries DM governments will want to re-build / re-shore for geopolitical reasons
Will this US outperformance continue?
3. Iain McGilchrist, author of The Master and His Emissary and his new one: The Matter With Things, was on the Modern Wisdom podcast discussing The Wisdom of Intuition.
4. How Putin’s Oligarch’s bought London in the New Yorker, and if you want to go deeper here, it’s worth reading Oliver Bullough’s Butler to the World. London is likely the western city most impacted and influenced by Russian money.
5. There are no great recent history books that combine geopolitics, energy policy, finance and markets. This is what Prof. Helen Thompson’s new book titled: Disorder: Hard Times in the 21st century tries to do. It’s a heavy but good read that I just finished.
It recounts three histories - one about geopolitics, one about the world economy, and one about western democracies - and explains how in the years of political disorder prior to the pandemic the disruption in each became one big story.
It shows how much of this turbulence originated in problems generated by fossil-fuel energies, and it explains why as the green transition takes place the long-standing predicaments energy invariably shapes will remain in place.
For a quick flavour, you can hear her on the penultimate episode of the Talking Politics podcast discussing the book.
This book asks some big questions like what is Nationhood really about and when and how do democracies break down.
B. The Tech and Crypto Section
1. Often in the west, we don’t really see and understand where and how Bitcoin changes the lives of people in less fortunate circumstances. This 4 min video by the Human Rights Foundation titled: Check Your Privilege is something to think about:
Thanks to Yaser for sharing.
2. People have stopped talking about AI and ML in the ways they used to two years. Alex Wang, CEO and Founder of Scale AI was on Invest Like the Best to discuss the building blocks behind a successful artificial intelligence business, the significant role of AI in global security, and why data is supplanting code as a company's most valuable asset.
C. Extreme Ownership
A book I go back to sometimes is Extreme Ownership by Jocko Willink. Jocko served in Iraq as part of the US Navy SEAL’s.
His children’s book: Way of the Warrior Kid was one that both my daughters loved and applied in their life.
I re-read Extreme Ownership last week as a reminder of the lessons. It’s a book about life, leadership and leading. I learnt things I could apply both at home and in the office.
Here are the key things I walked away with:
Talking responsibility: Always take responsibility for what is happening around you. For example, if the team doesn't do it, it's not their fault, it's your fault. In your life where are you denying responsibility ?
Setting a Standard: If you see something broken and you didn't do anything about it, then you are setting a new lower standard. Is that what you want? Set the standard for your team and family.
Complexity and Communication: Execution is hard and execution is key. Start simple. Don't have complex plans. Execute simple plans and learn. Prioritise and execute.
Managing up: Leadership not just about communicating to your team but also to your leadership. Let them know what you see and what can be improved. If you don't like what you are hearing, it's your job to let management know better information.
Discipline equals freedom: Discipline to wake up early leads to more free time. Discipline to work out leads to everything feeling lighter. Discipline to plan ahead makes things flow easier. Discipline to have standard operating procedures reduces mistakes and allows room for creativity.
I first learnt about Jocko from a 2017 Tim Ferriss, so I’ll start you there.
A little personal news.
My wife’s book is coming out in a few months and we are very excited.
It’s called: The Halfways by Nilopar Uddin.
I’m still not sure how she’s managed to be a mother, hold down a full time job as a lawyer, write and get this book published in a few years….
You can learn more about it here.
I'm happy you're mentioning your wife's book. It looks beautiful and I pre-ordered it right away. It also strikes me as an ideal way to give back at least a tiny bit of the value I received from your newsletter. I encourage anyone reading this to consider doing the same ✨
Does anyone have thoughts on the best investment option available to individual investors to get the type of broad commodities exposure that Currie talks about (closest to the people actually taking delivery of this stuff...)? BCI from Aberdeen looks interesting, but curious if readers have other ideas. PS - I think this is low-key one of the best newsletters out right now