A Few Things: What To Expect In 2024, The Top Risks, Galloway's Predictions, Michael Ovitz on Knowledge Is Power, The One Thing, Intriguing Science Breakthroughs of 2023, Charts & News You Missed...
January 11 2024
I am sharing this weekly email with you because I count you in the group of people I learn from and enjoy being around.
Here is last week’s discussion: Annual Reflection Framework, Biggest Science Breakthroughs, Being High Agency, What Are Family Offices Doing?, My Top Tech Recommendation, 3 Books in 3 Mins, News and Charts...
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Quotes I Am Thinking About:
"The best and most beautiful things in the world cannot be seen or even touched - they must be felt with the heart."
- Helen Keller
"Do all things with kindness. What you send out comes back around."
- Eleanor Roosevelt
"The journey of a thousand miles begins with a single step."
- Lao Tzu
"Doubt kills more dreams than failure ever will."
- Suzy Kassem
“The pessimist criticises, the optimist creates."
- James clear
A. A Few Things Worth Checking Out:
1. My favourite and most fun podcast of the last ten days was Bari Weiss’ Honestly podcast: What To Expect in 2024.
They had the great Tyler Cowen look into the economic crystal ball. Leandra Medine Cohen clued us in on fashion trends in 2024. Suzy Weiss talks through the cultural year ahead. Linguist John McWhorter looks at language. Doctor and longevity expert Peter Attia tells how to start the year healthy. Eagle-eyed political observers Nate Silver and Frank Luntz try to forecast the election. And historian Niall Ferguson tells us whether we’re right to be having nightmares about World War III.
Highly recommended. I actually listened to it with my kids. It’s that good.
Best part was probably the bit with John McWhorter diciphering millennial language. For example do you know what words like “rizz”, “cheugy”, “simpin" mean? I didn’t.
2. Marko Papic at ClockTower Group shared his 2024 market update.
He said, emphasis mine.
The year 2023 will be remembered as the Year of the Geopolitical Tourists. Many armchair forecasters bid up hysteria regarding the ongoing war in Ukraine and the October 7 terrorist attack in Israel. In the end, neither event had any impact on markets while tensions between the US and China decreased as Beijing sued for a (temporary, in our view) peace.
This will not be the case in 2024! In fact, we believe that geopolitics will dominate all markets this year, starting with the Fed’s reaction function. The Fed pivot in December, which took many investors by surprise, was a great example of that dynamic. Why pivot towards cuts so suddenly when the US third quarter GDP printed 4.9%? Why pivot towards cuts so suddenly with US unemployment at decade lows? Clearly some unobserved variable has caused the shift! In our view, that variable is the US election in 2024, which sees Donald Trump as a legitimate, anti-establishment, threat.
As such, the Fed has embarked on a precautionary easing cycle – cuts absent of a recession – which has universally been positive for the equity market. As the chart below illustrates, stocks love precautionary cuts. The year 1984 – another election year (!) – may be a particularly good comparable to 2024, given that CPI declined massively, forcing the Fed to cut.
3. The Eurasia Group shared their The Top Risks Report 2024, and Ian Bremmer was on the Prof G podcast discussing the report.
Key Ideas:
USA's Internal Conflict: Explores the deepening political divisions in the U.S., highlighting risks from a contentious presidential election, increasing societal polarization, and declining trust in democratic processes.
Middle East Tensions: Examines the potential for escalated conflict in the Middle East, particularly focusing on the Israel-Palestine situation and its implications for regional stability.
Ukraine's Partition: Discusses the ongoing Russia-Ukraine conflict, considering the possibility of Ukraine's de facto partition and its global geopolitical repercussions.
Ungoverned AI: Addresses the rapid advancements in artificial intelligence and the lack of sufficient governance, emphasizing risks related to misinformation and technological misuse.
Axis of Rogues: Analyzes the growing strategic and military collaboration between Russia, North Korea, and Iran, and its impact on global stability and international norms.
4. Prof. Scott Galloway shared his entertaining predictions for 2024.
The Key Ideas:
He predicts housing sales will boom with lower interest rates, Alphabet stock will outperform, and Biden will be reelected while Trump is sentenced.
He sees major entertainment industry consolidation coming, with streaming services outside of Netflix, Disney, and Warner Bros Discovery likely being acquired.
On the tech front, he believes the AI bubble will deflate some after massive recent investment and hype. He sees weight loss drugs like Ozempic having a bigger impact than AI on the real economy. India is poised to take over China's role as the major manufacturing economy.
Three Key Ideas:
Use momentum, speed, and scale to build a successful business. Ovitz emphasizes the importance of constant action, calling contacts, working tirelessly, and rapidly growing a business to gain an edge. He credits CAA's huge volume of calls, meetings, and quick expansion for its industry dominance.
Tell the truth, even when it's difficult. Ovitz made it a policy to be honest with clients, even giving blunt feedback about poor performances. While risky, this built immense trust and loyalty over time as clients appreciated the candid advice.
Develop mystique and positional power. Ovitz deliberately cultivated an air of mystery at CAA, avoiding the press and public events. Combined with his reputation and relationships, this gave him an aura of authority and influence, or "positional power."
6. David Epstein, author of books such as “Range” wrote a useful piece titled: Why You Should Plan To Get Less Done.
Key idea:
Daniel Kahneman led a team designing a high school curriculum on decision making. When asked to estimate how long the project would take, the team consensus was about 2 years. Kahneman then asked the expert Seymour, who estimated 7-10 years based on past experience. The team proceeded trusting their own estimate. It took 8 years to finish.
Kahneman realised the team fell prey to the "planning fallacy" - focusing on the best-case scenario when estimating productivity. Epstein experienced this when writing a book, making overly ambitious daily to-do lists that became overwhelming.
The solution was putting only 1-2 key items on each day's list to focus on the most important tasks. This avoided the planning fallacy's unrealistic expectations.
Resolve to resolve to do less - set fewer, more achievable goals.
A great book on this idea that I highly recommend is: The One Thing by Gary Keller.
7. The Economist had a useful piece titled: How to get rich in the 21st century. The race to become the next economic superpower….
5 Key Ideas:
Many developing countries like India, Indonesia, and Saudi Arabia have extremely ambitious economic growth targets for 2050, aiming to reach high-income status through manufacturing and industrialization. However, these targets will be very difficult to achieve.
Countries are pursuing three main strategies to get rich - leapfrogging to high-tech manufacturing, exploiting natural resources needed for the green transition, and reinventing themselves as trade and business hubs. But all three are risky gambles.
The state is now taking a much more active role in directing economic development compared to previous decades. This interventionist approach is inspired by China and South Korea's model.
The stakes are high - if these big bets fail, countries could face financial crises and lose their chance to develop. Time is limited for oil producers like Saudi Arabia.
The path to prosperity is harder now: Manufacturing no longer offers the same productivity boosts. Countries are relying more on lower productivity sectors like minerals and tourism instead of industrialization.
8. If you are trying to figure out what’s happening in the Middle East and how to interpret the news, the most useful conversation I’ve heard is Kamran Bokhari on The Hidden Forces podcast: Is The Middle East Headed For Another Major War?
Kamran is the Senior Director of the Eurasian Security & Prosperity Portfolio at the New Lines Institute for Strategy & Policy. He has served at the U.S. State Department and as a Senior Consultant with the World Bank.
Key Ideas:
Complex and evolving role of Iran in the Middle East, which combines elements of being a traditional nation-state and a revolutionary movement. Iran's regional ambitions are rooted in a desire to reclaim its historical imperial power and assert Persian nationalism, regardless of ideological shifts.
The Obama administration sought to engage Iran as a potential partner in regional affairs, though it faced challenges and achieved limited progress. Iran continues to exert influence through proxies like Hezbollah that align with its revolutionary goals. However, its behavior is still shaped by realpolitik national interests.
Looking ahead, Iran is unlikely to abandon its desire to be a major regional stakeholder, even if its regime or ideology changes. This will perpetuate tensions with Saudi Arabia and other actors. Saudi Arabia aligns with the pro-Western camp, while Iran sees itself as a great power that can challenge the US and shape regional security.
The Middle East remains plagued by volatility and power struggles between multiple players with competing interests. The US struggles to effectively balance these tensions.
There are concerns the situation could escalate given the divisions in the Sunni Arab world and Iran's ability to exploit power vacuums. Comprehensive long-term strategies beyond short-term solutions are needed to address the complex dynamics.
B. The Science and Technology Section
1. Bloomberg Opinion had an optimistic article titled: The 10 Most Intriguing Science Breakthroughs of 2023.
Several major scientific breakthroughs occurred in 2023, including new obesity drugs that provided insights into the hormonal causes of weight gain, clearer understanding of climate tipping points showing we still have time to act, and repeat nuclear fusion experiments bringing us closer to harnessing this clean energy source.
Other major 2023 discoveries included human footprints in New Mexico dating back 21,000-23,000 years, requiring a rethinking of when humans first reached the Americas; the James Webb Space Telescope capturing images from the first billion years after the Big Bang; and the detection of gravitational waves from supermassive black holes and cosmic strings.
Medical advances in 2023 included the first FDA-approved CRISPR treatment for sickle cell disease, two gene therapies that cure the disease, and machine learning able to decode thoughts of severely paralyzed patients. AI like ChatGPT also showed an ability to excel in medical licensing exams.
Studies on rats showed they can plan ahead, toppling the idea that only humans can think about the past and future. Discoveries in recent years reveal the intelligence of animals has been greatly underestimated.
Despite tragedies dominating the news, astonishing scientific breakthroughs quietly occurred in 2023 that could change our understanding of the universe, climate, history and medicine.
More undiscovered truths likely surround us.
2. The research team at Messari shared their Crypto Theses for 2024. It is always a great read.
C. News and Charts You Might Have Missed:
1. The book that most changed my life by changing what I focused on.
2. Last year, China led India (#2) and the US (#3) in app installs, while Bangladesh emerged as the fastest-growing market. To subgenres for apps included things like utilities, productivity apps, shopping, entertainment and photo and video.
3. Last year was the hottest year in 173 years of recorded measurements, according to scientists. The rise in global average temperatures in 2023 was just shy of the 1.5 degrees Celsius limit set in the 2015 Paris Climate Agreement. The heat was driven by both climate change and the naturally occurring El Niño phenomenon.
4. SEC approves first spot bitcoin ETFs in boost to crypto advocates.
5. What’s your favourite bread?
Believe it or not, that “♡ Like” button is a big deal – it serves as a proxy to new visitors of this publication’s value. If you got value out of reading, please let others know!
I don't see Wonder Bread on the list?
Paratha at number 29?....pffft please