Raising Successful People, How To Fail, Housing Best Asset Class and The Coming Energy Crisis

August 6, 2020

“The four most beautiful words in our common language: I told you so.”

- Gore Vidal

“The key is not to predict the future but to prepare for it.”

- Pericles

“Failure is the condiment that gives success its flavour.”

- Truman Capote


A. The T.R.I.C.K to Raising Successful People

It’s summer and if you have kids, you are probably spending even more time with them than during the last few months.

I was surprised when I saw these charts from an Economist article, on just how much more time we are spending with our kids than our parents did.

In most countries, you & I are spending twice as much time with our children on a daily basis than our parents did with us.

Now we all love our children and want to spend time with them and help them.

But why could this be a problem?

I was reading “How to Raise Successful People by Esther Wojcicki, who was also on the Farnam Street Knowledge Project podcast.

Esther is also the founder of the esteemed Palo Alto High School Media Arts program as well as Global Moonshots in Education. Her teaching methods have inspired countless leaders in education and business, three of which are her own daughters — Janet, a renowned anthropologist, Susan, the CEO of YouTube, and Anne, founder of the genomics company, 23andMe.

Her belief is that is we might be making the next generation too dependent on us. I’ll be honest I struggle with this too.

By constantly checking on them, micro-managing them and making sure they don’t make mistakes maybe we are creating young adults who can’t think for themselves.

In fact University of California, Berkeley offers a course on Adulting.

Esther recommends the acronym T.R.I.C.K to raise Successful People.

Trust

Setting routines with children, and then empowering them to make decisions within those routines.

As a basic example, maybe your kids are very young -- like, too young to dress themselves. 

Wojcicki suggests breaking the routine of "getting dressed" into two smaller routines:

  • choosing the clothes (where you can choose to trust your kids' judgment regarding what they want to wear), and

  • actually getting dressed, where they might need more help.

You might not be able to trust a very young child with handling the whole task, but you can trust him or her with part of it. So, strive to find those parts.

Respect

Respect is basically understanding the ideas of another person and listening. So a parent can listen, and solicit their children’s opinions.

Independence

Independence is related to trust when we talk about parenting. Wojcicki describes it as parents setting structural guidelines and then empowering kids to make their own independent choices.

As an example, maybe you put a limit on screen time, but you empower your kids to make independent choices on how to use that time.

"You, the parent, prescribe the structure," she said. "But within that structure, there's tons of opportunities for making decisions, and you give them that opportunity.

Collaboration

This is about getting your kids' ideas and buy-in before setting the structures and routines--so that you can then trust them to do things independnently within them.

"Then you write down their ideas. Maybe they can't even read, but they can see you're writing it down," she suggested. "Then we talk about these things, and you try to include some of their ideas, with some of your ideas. The idea that you're really pushing is: 'We come up with this, collaboratively.'"

Kindness

The last value might be the most relevant right now. Kindness can be the antidote to fear.

"The number one thing that a kid needs, to be able to learn effectively, it's kindness," Wojcicki said. "And so, what you want is providing an atmosphere where, if you make a mistake, you're treated with kindness. It's not like the mistake doesn't go unnoticed, it's just that you're not traumatized."

So treat your kids, and yourself, with kindness. Make mistakes, try to correct them, and move on.


B. How To Fail

Read Elizabeth Day’s "How To Fail: Everything I've Learned From Things Going Wrong". 

I've failed many times. 

Here are some ideas I picked up from the book:

In order to succeed at a grand scale, you have to be willing to fail on an equally grand scale too. The regular failures are part of and necessary for your massive success. 

On tests; "The secret to succeeding at tests is not, actually to get a fantastic mark. Succeeding at a test means not defining yourself according to the outcome." Don't be defined by the ticks in the margins, most of life is random and serendipitous. 

In relationships, spend time understanding yourself as much as the other person. Own your vulnerabilities and express your emotions in a way that is true, calm & powerful.

At work, if you treat yourself as high value, it turns out other people are more likely to do as well. Because when you play big, it's difficult to feel small. 

On friendships; Friendships cannot be measured by doing anything specific; it's simply about sharing what life throws at you. It's about allowing your friend to feel truly understood and loved. 


C. A Few Things Worth Checking Out

1. Interesting article on Why Housing Could Be One of the Best-Performing Asset Classes of the 2020s”

2. Useful white paper by the team at ARK Invest on Software-as-a-Service: Could 2020-2030 be the Golden Age?

3. The team at Goehring & Rozencwajg (dedicated Natural Resources investors) put out their Q2 commentary: On The Verge Of An Energy Crisis. They believe we could have a 4mm/bl a day Oil deficit in Q4 2020, which could quickly run through all the inventories and push Oil back to $75/barrel. Definitely not a consensus view….

4. A bunch of amazing things are happening in the Semiconductor market. While the last ten years in tech have been all about software & the internet, that progress has been built on top of a hardware & semiconductor market that has delivered on Moore’s Law.

This is a good explainer on How a Handful of Chip Companies Came to Control the Fate of the World (and accompanying podcast).

A learnt a bunch from this video, including how the growth of AI /ML means the demand on semiconductors and memory will be inflecting up 4-6x, after a decade where the semi industry went through massive consolidating due to the demand shocks from the growth of cloud computing and virtualisation.

5. Seth Klarman runs the $29bn hedge fund Baupost.

They released their Q2 letter and I found the section below interesting around what will change post COVID:

“So, we wonder, since life has been anything but normal over the last four-and-a-half months, what aspects of our daily experience might undergo lasting change as a result of the COVID-19 pandemic and society’s response to it, and what might quickly return to normal.

We view this as an interesting exercise in trying to look ahead, although we harbor no illusions that the future will prove amenable to accurate prediction. Here is our list, ranked according to our level of conviction that the suggested changes will occur. A few of these ideas are clearly more conjecture than evidence-based at this time:

1. Acceleration of the digitalization of the U.S. and global economies

2. New ways of working, learning, and providing healthcare

3. Partial reversal of globalization and the development of an American industrial policy

4. Reckoning with the life and death implications of inequality

5. Real Estate becomes more challenged as an asset class with deteriorating fundamentals forretail, hotel, and possibly office properties

6. COVID-19 forces humanity to reorganize its priorities and better prepare for risk

7. “The Fauci Effect” – renewed confidence in experts, science, and truth, and a desire toserve society

8. Declining dominance of capital over labor”


Reminder to myself on how lucky I am.

Our worst days are better than the best days of the majority of this planet.

This is a picture of a school in Afghanistan, neighbouring country to where I was born and lived for the first 11 years of my life.

Thank you for your friendship.