Uranium, Vaccine Mandate, Matt Damon, Ray Dalio, Exponential, Cathie Woods and NFTs
September 12, 2021
Welcome to the +25 new subscribers since last Monday’s email! If you’re reading this but haven’t subscribed yet, do it!
Each week, I write an email that mixes technology, markets and worldly wisdom picked up from a +21 year finance career.
This week’s issue is action packed, so I’m sending it a little early.
Have a great week.
“If you think you can do a thing or think you can’t do a thing, you’re right.”
- Henry Ford
“Yesterday I was clever, so I wanted to change the world. Today I am wise, so I am changing myself.”
“Our greatest glory is not in never falling, but in rising every time we fall.”
A. A Few Things Worth Checking Out
1. We discussed Uranium last week. Things have moved quickly since then. Sprott upsized their trust by an incremental $1bn.
To get the latest check out the last 20 mins with Kuppy in Market Huddle and this video with Rick Rule.
2. Did you catch George Soros Op-Ed in the WSJ: BlackRock’s China Blunder.
Summary: Pouring billions into the country now is a bad investment and imperils U.S. national security.
Key paragraph for me:
Pouring billions of dollars into China now is a tragic mistake. It is likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the U.S. and other democracies. Mr. Xi faces an important hurdle in 2022. Many believe he intends to overstep the term limits established by Deng Xiaoping and make himself ruler for life. He is bound to have enemies, whom he must prevent from uniting against him. Thus, he needs to bring to heel any entity rich enough to exercise independent power.
3. We have been discussing the vaccine mandate and its impact on the labour force for the last month. Biden finally announced a nation wide mandate.
What impact will this really have?
Great piece by Peter Zeihan on the subject: The Way Out - and Forward
To be direct, this sort of mandate is how the United States beats COVID.
Why do I care? Why am I considering a health issue to be part of my geopolitical bailiwick?
First, demographics. The healthier the population, the more economically productive a population, the less dependent upon foreign factors a country is. COVID has already resulted in the single-greatest reversal in the average American’s lifespan since the country’s last major health crisis: the Spanish flu epidemic of 1918-1919.
Second, the world is in the midst of the greatest geopolitical transition of our lives, and arguably the largest one since the onset of the deepwater navigation era in the late 15th century. Globalization is in a state of collapse. Ten years from now, the countries that have proven able to secure their means of production, their manufacturing supply chains, their internal consumption, and their labor force from the vicissitudes of global disorder will be the ones who rule the future. America’s unvaccinated population is now the single biggest threat to each and every step of that process.
Mass vaccinations are how the United States retains its population and its position and its potential and its freedom for action - for decades to come.
4. As of Friday’s close the average stock in the S&P 500 was down 10% from their 52 week highs. For the Russel 2000, 55% are down at least 20% from 52 week highs.
Not exactly euphoria…
5. If you like some deep thinking about your life, you will love Chris Williamson (host of Modern Wisdom) and Jim O’Shaughnessy (father of Patrick) discuss Embracing Your Weirdness.
Some quotes I loved:
Embrace your weirdness, release the tiller, love yourself unconditionally, and life will take you to the right place
Many of the things you value about yourself, you didn’t choose. Take advantage of what you do have!
In business, if you do what everyone else is doing, you guarantee average results
6. Harvard University was in the press recently for divesting their Oil & Gas investments. That made me look at this piece looking at how the Ivy League University Endowments actually invest.
7. The startup that wants you to live forever: Altos Labs is pursuing biological reprogramming technology, a way to rejuvenate cells in the lab that some scientists think could be extended to revitalize entire animal bodies, ultimately prolonging human life. The new company, which has already raised at least $270 million from deep-pocketed investors, is recruiting a large cadre of university scientists with lavish salaries and the promise that they can pursue unfettered blue-sky research on how cells age and how to reverse that process. (MIT Technology Review)
8. I enjoyed this YouTube clip from GQ featuring Matt Damon who talks about his movie career and the characters that have shaped him. The list of characters that Damon has brought to life is actually remarkable and really does chart my interest in movies. Not that I'm some movie connoisseur, I just like what I like, but Will Hunting, Tom Ripley, Jason Bourne and Mark Watney are some of my favourite leads in some of my very favourite films.
Damon is a smart, likable guy and the way he describes how each film and character came to be makes you like him even more. It also makes me want to watch the Bourne movies all over again, so there's this weekend's filmic entertainment sorted.
9. Adam Grant’s latest TED Talk was on how to stop languishing and start finding flow.
10. How to use your Gmail like a pro.
B. What I Learnt from Ray Dalio’s Principles
A tweet storm on what I got from Dalio’s book Principles.
Had the pleasure to see & hear Azeem Azhar present his book Exponential last week, so I spent the weekend soaking in the big ideas.
Azeem is the creator of the Exponential View and I recommend you sign up for his weekly right now.
Here’s an overview of his great book in 20 tweets.
D. The Tech and Crypto Section:
1. The NFT Investor’s Guide. A great and fair discussion on why NFTs matter.
NFTs are expensive JPEGs (and PNGs, and GIFs). They’re also real. NFTs will be critical fabric for the next evolution of the web. Investors that ignore them will miss out on an emerging market that is far less efficient in pricing value than the stock market.
This bright future doesn’t mean NFTs can’t be in a local bubble. Adhering to the principles above, there are few NFTs that offer objectively good future returns based on the first category of future distributions. There are probably some good long-term investments in the utility space. The cultural relevance space will probably see the greatest upheaval. Many popular current projects will disappear from relevance.
The reason to jump into NFTs now, despite whatever dangers may exist, is because of scarcity. Unlike stocks, NFT projects have strict limitations of how many exist. Even if more are created in the future, they’re not the same as the earlier versions, and we can verify that on the blockchain. The best NFT projects may not see tremendous turnover, even in a bear market. It’s those projects that are likely to be the FAANG stocks of the NFT space.
2. Cathie Wood of Ark Invest, the investment management firm specializes in disruptive sectors. Yassine Elmandjra is an analyst at Ark, and Chris Burniske is the former blockchain lead at Ark and is now a partner at Placeholder VC. They were on the Bankless podcast to discuss their very simple thesis.
Invest in the future
They believe that as a society, we are entering a new age of exponential and unprecedented growth, afforded by compounding technological advancements and a turning point of innovation.
In this podcast they discuss Wright’s Law, managing haters, Ark’s thoughts on the triple point asset, and DeFi.
3. Great Profit Maximalist podcast on Navigating the Most Interesting Trades in Crypto.
My takeaways were around: a) always think about the big money and their constraints and incentives, where will big money flow and why b) watch the narrative changes - one of the big ones this year has been around L1 chains and NFTs c) many things are just being valued as a % of BTC and ETH. We don’t have right metrics to value some of these businesses, since so much of their value is ahead of them.
4. Great piece on why NFTs could be the future in many ways by Pomp.
The key point for me:
So what exactly is driving all this interest in non-fungible digital files? The short answer is that NFTs live at the intersection of a few different tailwinds.The positive perspective is that digital natives would rather own digital goods than physical goods, which means that we are watching the digitization of the collectibles industry. These digital natives want to use the NFTs as a way to play games, transact with each other, and generally recreate the collectibles industry.
Another perspective is that we are watching the real time creation of a new status game. Each individual that would normally drop $50,000 to $1,000,000to purchase a car, watch, house, boat, etc is now realising that you can spend the same money on a digital good and flex in front of more people on the internet. Only so many friends can check out your house and be impressed.But millions of people a month will see your Twitter avatar.
The less exciting perspective is that monetary and fiscal policy has created a manipulated financial environment. This means that many of the traditional assets, like bonds, now produce a negative real rate of return, which forces investors to push further and further out on the risk curve. The only way to drive returns and capture yield is to start doing things that you previously thought were insane. Ya know, like buying JPEG images on the internet for millions of dollars.
In reality, the truth is probably a combination of all of these perspectives. As with most things in life, there is no black and white answers. That is likely a good thing. You can’t argue with the attention and sales volume of the industry, so rather than sitting around complaining about it, you have to decide if you want to participate.