A Few Things: Zeihan vs Bremmer, Amateurs vs Professionals, Papic vs Currie, The Global Balance Sheet, Tony Fadell on Building, What To Do In Crypto Bear Market.....
July 22 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.
“Literature is the art of discovering something extraordinary about ordinary people, and saying with ordinary words something extraordinary.”
- Boris Pasternak
“The truth is rarely pure and never simple.”
- Oscar Wilde
“Attitude is a choice. Happiness is a choice. Optimism is a choice. Kindness is a choice. Giving is a choice. Respect is a choice. Whatever choice you make makes you. Choose wisely.”
- Roy T. Bennett
A. A Few Things Worth Checking Out:
1. Peter Zeihan and Ian Bremmer spoke with Sam Harris on The End of Global Order. The core of the discussion was around Peter Zeihan’s book:
The big idea in the book is the twin forces of globalisation and demographics which had worked for us for the last hundred years are now reversing in a big way. The rest of the book goes into detail across Transport, Finance, Energy, Industrial Materials, Manufacturing and Agriculture, discussing how bad things are going to get for the world.
To overly simplify, Peter’s investment thesis can be narrowed down to: own US assets, sell European and Chinese assets.
In the podcast, Ian helps temper down Peter Zeihan’s exuberance. They both agreed on demographics being an issue for the world, but Ian Bremmer was more hopeful on China and de-globalisation. He also highlighted the futility, uncertainty of forecasting out more than a decade.
By the way, Ian also has a great new book. Thank you David G for sharing.
This podcast is probably the most interesting thing you will listen to this week. I am listening to it a 2nd time.
2. Great Farnam Street post on the The Difference Between Amateurs and Professionals.
Which one are you?
3. Morgan Housel had a super piece on Lifestyles. One person focused on what others thought about him, while the other focused on what he wanted. One ended up dead, while the other found a deep sense of happiness.
In life, we are always in a struggle between what the world wants from us and what we truly want.
4. Nassim Taleb had a simple but thoughtful set of tweets on just how hard Finance can be if we just fall for 1st order narratives. Never fall for the immediate and consensus narrative of the time.
5. The former head of the CIA and US Secretary of State, Mike Pompeo was on the Bari Weiss show early July. I got a lot of insights from this one, of course he’s not a big Biden fan!
6. CONTRARIAN IDEA OF THE WEEK: Marko Papic was on the Macro Trading Floor, discussing why it’s Game Over For the Bulls. Marko thinks Russia will stop in Donbas and Europe will look away. That will cause the risk premium to come out of oil, at the same time, demand will be weak globally, and the relationship between US and Europe will weaken.
So he’s long S&P and EUR vs USD, short Oil and European Nat Gas.
Marko was on Bloomberg TV on July 19th, if you want to watch him for 5 mins:
And no discussion on Commodities is complete without Jeff Currie of Goldman Sachs weighing in on Russian Gas.
7. We discussed the Epsilon Theory article last week on the Financialisation of the US Economy. My friend Vanja shared this great McKinsey piece on the global balance sheet. Some great insights on just how “rich” the world really is. How much wealth is there?
B. Build by Tony Fadell
Tony Fadell began his career in Silicon Valley at General Magic. He joined Apple in 2001, and went on to become the SVP of Apple’s iPod Division and led the team that created the first 18 generations of the iPod and the first three generations of the iPhone. Throughout his career, Tony has authored more than 300 patents. After leaving Apple, he was the founder and CEO of Nest, the company that pioneered the “Internet of Things” and created the Nest Learning Thermostat. Nest was acquired by Google in 2014 for $3.2 bln.
Earlier this year, he wrote the book: Build - An Unorthodox Guide to Making Things Worth Making.
It’s a great guide, starting from: Build Yourself, Build Your Career, Build Your Product…. I am about a third of the way in.
You can hear his energy coming through the pages.
Tony is a builder and operator.
Some ideas so far:
Seek great people. Seek to disrupt yourself. Seek growth. Seek to break your routines. Keep iterating to versions 6, 7 of you, rather than getting stuck on V1, V2…A way to do that is to continuously seek change. Keep being in beta.
Then pound down the doors of the place where you want to be. Seek great people.
If you don’t have butterflies in your stomach, you aren’t taking enough risk. Get over your skis.
Are you really thinking different or just copying. Are you really taking risk or just seeking approvals. Be where change is happening, on the frontiers and then bring it back to your team.
You should check him out on the Tim Ferriss show.
C. The Tech and Crypto Section:
1. A classic re-telling of what’s happening in Crypto, thank you Yaser for sharing.
2. Two great crypto podcasts on what to do in the bear market:
3. Harvard Business Review on What Skeptics Get Wrong About Crypto’s Volatility:
Universal access, immediate price discovery, and greater transparency also contribute to both the reality and the perception of scams and shady behavior in crypto. Like any technology that removes friction, the ease with which new projects can be launched has been a boon to con artists and fly-by-night operators, in the same way that the accessibility and efficiency of email led to a spike in supposed Nigerian princes looking for a place to park their money.
That’s not to say that the failure rate of crypto projects isn’t higher than new restaurants — new industries naturally have a lower success rate than established ones. But it is safe to assume that the rate in crypto is not as high as it seems. But total transparency makes crypto look worse than it is. Disingenuous entrepreneurs raising money from unsuspecting marks is an ancient practice in every industry. Thousands of new restaurants fail every year, and some of those failures inevitably turn out to be scams. But those investments aren’t debated on Twitter, and we can’t watch their shares collapse on a public website like FoodMarketCap.com. Crypto is unique in that even the scams are transparent, and in the long run, transparency is a powerful tool for countering shady behavior, in any industry.
The crypto industry has a lot of growing up to do, and the current downturn certainly offers some hard lessons. Understanding what volatility means in crypto markets — what signals it’s sending and responding to — in an integral step in this process. Investors and entrepreneurs are learning not only what is possible in this new ecosystem, but also what isn’t, and why some of the lessons learned by the sectors that crypto hopes to disrupt transcend technology. Money and hubris make for a bad mix, and nothing reinforces the importance of humility better than a crash. But the skeptics who constantly harp on the volatility would be well advised to not fall into a similar trap, conflating necessary growing pains with a fatal condition.
Have a great weekend.