More random notes from all the media I’ve consumed over the past week.
Here are notes from week 3, week 2, and week 1.
A few posts I published recently:
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Top thing I learned this week is a framework on asset classes from the “godfather of commodity investing”, Robert J Greer. He divides all assets into 3 buckets:
1. Store of Value
2. Commodity / Transformable
3. Capital producing
For example, gold is both a commodity asset (for certain industrial purposes, and jewelry) and a store of value. Real estate is a capital producing asset (eg, rent payments) and a store of value. Stocks are a capital producing asset. Cash is a store of value. Oil is a commodity and used to be a store of value. etc.
The reason this interests me is that there is talk now about ethereum’s potential as an asset class that belongs in all 3 buckets: ETH as a store of value, ETH as a commodity to rent blockspace on the ethereum blockchain, and ETH as a productive asset to stake and lend to generate a return.
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Onto the notes! There are a lot this week…
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Brian Greene tells the story of the multiverse, TED talk
- Hubble proved our universe was expanding
- Everyone thought the expansion was slowing down, but it is actually speeding up!
- What force causes this? GRAVITY. Gravity can push things apart too – repulsive gravity, Einstein explained it, now called “dark energy”
- String theory – approach to a unified theory of physics, little tiny vibrating filaments of energy, “cosmic symphony”
- To make string theory work, must allow for extra dimensions of space
- Many universes each with a different shape, amount of dark energy is different
- Why our universe has a specific amount of dark energy? Only one possible to allow our form of life
- Quantum fuel generates many big bangs, big cosmic bubble bath of universes
- Began 13.72B years ago
If you like TED talks, I watched a lot in the past and took notes on them here.
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Warren Buffett, speech at the University of George
As usual he drops wisdom bombs on the audience, I usually try to do other stuff when I listen to these kinds of materials but when Buffett’s talking it’s very hard to not pay attention.
- In people he looks for the 3 i’s: Intelligence, Initiative, Integrity
- “Work for someone or a company you admire”
- “Chains of habit are too light to be felt until they’re too heavy to be broken”
- Defining your circle of competence is most important
- Cars, TVs, airplanes — all transformative industries, but very difficult to make winning investments, there were 2K auto cos but only 3 alive today (!)
- Buying Berkshire was a mistake, terrible business but it was very cheap
- Feels like he’s an airline-holic, made big mistake investing in them and needs to be told not to
- Imagine a punch card limited to only 20 investments in your lifetime, you’d do better with this strict limit, because it would force you to think really hard and focus
- Generally feels it’s not good to dabble, either go big or don’t do it
- What do you look for in a partner? Is it beauty, brains, etc? “You look for low expectations” because you want it to last
- Discusses Bill Gates on philanthropy: he spends $1B a year, metric is lives saved, very rational and very informed (mentions Gates reads 15 books a month)
- Re: his foundation / trustees for his funds, he do not want eye dropper approach to philanthropy; use judgment to look at important problems that do not have an actual funding constituency
- When he was born, odds were 50:1 born in US, just luck
- Fed: “its brakes are better than its gas pedal”
- Volcker put on brakes, right thing to do, but enormously unpopular
- Sam Walton had disadvantage in buying, borrowing, and in real estate, but he still killed Sears
- “Take care of the customer and you’ll win”
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Joey Krug on the Bankless podcast
- Improvements in Augur v2: bet in DAI instead of ETH, integrate with 0x: p2p trading platform, faster frontend
- Fastest resolution will be like 30 minutes, but faster and it won’t have the same economic guarantees
- His biggest concern for Augur is ETH fees, and frontend is still a trading frontend instead of a betting frontend
- Volume in peer-2-contract model has exploded, p2p growth is slower
- When Augur v1 launched, did a few $m in volume but it was too slow, hard to use
- How to fix fees in Augur v3? He likes optimistic rollups, REP will use Matic Plasma sidechain
- AMPL – Evan, “Hayek money”, Pantera invested, feels weird / truly new, investing in a meme, premine (VCs, team, foundation that slowly gives supply away)
- More bullish on Ether, BTC dominance will continue to slide
- People who use Defi are crypto natives right now, those who stuck around after bear market
- One Pantera LP is an endowment and specifically wanted Defi exposure
- “Ether as proxy for Defi price appreciation”
- CFTC deemed Ether a commodity
- Joey: Institutions will buy some BTC, some ETH, and invest in a few funds – that’s steady state
- Best way to audit is be live for long time with a lot of money in it, like BTC and ETH – live bug bounty
- One attack vector is hacking price oracles, another is Solidity bugs–
Morgan Housel on The Reader’s Journey podcast
- Buffett – made 500 investments, but majority of returns come from 10 including a huge % from his recent Apple investment
- Buffett – 90% of net worth came after his 60th bday
- For Ben Graham, Geico’s been by far his biggest hit and he broke his rules to buy it
- Of all the products Amazon has released, AWS and Prime account for almost all their profits and growth
- Odds of making money in stocks after 5 years is only 60% — must think very long term!
- “Volatility is the fee you pay the market”
- Bernie Madoff was legit successful before his Ponzi – estimates of $50-100M, he had “no concept of enough”
- “Luck and risk are same thing”
- Munger: “the first rule of compounding is to never interrupt it unnecessarily”
- Housel – Fed’s explicit goal is to prop up asset prices
- In middle of pandemic / recession, retail sales are highest they’ve ever been
- Housel’s own investment strategy: DCA into Vanguard index funds, pay off mortgage
Hidden Forces podcast with 2 WSJ reporters about Mohammad Bin Salman (MBS) and Saudi Arabia
- WSJ culture is “no surprises” (for the subjects, give them a chance to react and comment)
- For MBS, there’s BK “Before Khashoggi” and AK “After Khashoggi”, he’s much more cautious and guarded now
- Khashoggi was lifelong royal servant instead of a journalist
- Even after Khashoggi fled Saudi, he still wanted to support the country and start a pro Saudi think tank
- But Saudi royals saw him as dissident organizer and foreign agent, a traitor
- Guests believe if MBS becomes king, he would be open to complete rapprochement with Israel – risky card he knows he can play
- They’re not sure what his vision is for role of religion in Saudi future, but has locked up most extreme Wahhabis
More Michael Saylor on Saifedean’s podcast
- “A bank is a fiat miner” – Saifedean
- Saylor says main reason to position bitcoin as SoV / asset like an Apple or Google stock or gold is bc it won’t threaten govts, but if you market as privacy and better currency then you’re inviting regulation or a ban
- “Destiny of money is to be encrypted” – Saylor
George Friedman, forecast for the 21st century, YT talk
- Views world as one of constraints and cause-effect (eg, Obama policies are a result of Bush policies are a result of Clinton policies)
- Thinks Turkey is great power, no European army can defeat it except the UK, it’s larger than Saudi Arabia and also the biggest Muslim economy
- Japan is a great power. Question isn’t if China can surpass US but surpass Japan (this talk was given in 2013)
- Bullish on Poland: bulwark against Russia, compares it to SKorea which grew rapidly under US sponsorship
- 20th century was one of ideology, but he believes geopolitical necessity now overwhelms ideology
- Climate change – mitigation is slowing population growth, doesn’t believe consumption cuts will work, must remove dependence on hydrocarbons
- Not a believer in nuclear power, it’s an economic problem because it takes 15-20 years for a plant to come online, impossible to project demand and market conditions
- Favors solar as better solution
- Doesn’t believe in Asia century, remember when we were afraid of Japan domination?
- Only US and UK built a nuclear weapon de novo, everyone else bot or stole
- Australia’s biggest risk is structure of its trade regime, doesn’t control waterways and is reliant on different international powers like US UK China
Matt Mezinskis on Peter McCormack’s What Bitcoin Did
- Money is by definition a monopolized industry, because it has special license from the government
- calls himself a “lazy anarchist”
- In 1930s US had 30% of worlds gold, after ww2 it had 70% because Europe was trying to hide gold away from Hitler; If gold was decentralized before ww2, not after
- When Hitler went to Austria, Czech Republic, first thing he did was take gold, that’s how he built up such a strong army
- Believes it’s important to let anyone validate bitcoin, keep it decentralized
- Central Banks create base money as a liability, usually matched with a treasury / bond
- Gold, silver, btc are natural assets – no debt, no counterparty risk
- Monetary base is 3.3T, debt is 22T
- Govt debt in 1970s was only $60-70B
- Current fiat regime could continue another 20 years! We left gold standard in 70s and it’s still alive today
- In general more currencies have become floating, and the top currencies represent growing share of int’l trade and finance; believes Chinese RMB is next one up to become a truly floating currency
- Global monetary base is ~$20T, bitcoin base still too small to matter ($150-200B)
Dave Asprey interviews Matthew Walker about sleep
- the more sleep the better, stats show some increase in mortality after 9 hours but MW believes this includes confounding data from sick people
- data shows modern societies are getting less and less sleep
- REM and deep sleep are not the same thing, REM more important, ideal is 25% of sleep time is REM
- humans have 2x more REM sleep than any other animal (mammal?)
Corey Hoffstein discusses violent reflexivity with Nathaniel Whittemore
- “Everyone being pushed up the risk curve”
- 20 years ago, a fund could hit target returns with just bonds; now it’s predominantly equities, junk bonds
- “Amplification of narrative” eg Fed statements, Internet memes
- General move from active funds to passive, from 10% to 50% of market now, especially index funds
- Passive is more momentum driven, moving from convergent to divergent trading
- Fewer and fewer investment managers acting at individual security level
- Process began in late 90s, accelerated in 2008, initially led by Fed policy changes
- “Tightly wound loop where everyone is levered”
Bond king Jeffrey Gundlach on Danielle DiMartino’s show, YouTube
- You can’t downgrade a country that can pay back debts in its own currency
- US has $150T of claims / liabilities
- You can make Social Security solvent immediately by just raising min age to, for example, 80 years old
- There could be confiscation and debasement both, you have to barbell (as an investment strategy)
- If Biden elected, potential tax cut is coming
The Economist podcast interviews Daniel Yergin
- Last 10 years, US shale production doubled and natural gas grew 50%, now US is biggest producer of both
- US energy industry is 12M jobs
- Post covid, 30-50% cuts in global oil production
- No longer just “OPEC”, now it’s “OPEC Plus”, which is mostly Russia-Saudi detente
- 20th century was petrostate, China leading way to 21c electrostate
- China now leading producer of renewable energy while also world’s biggest polluter eg, China accounts for 30% of world’s coal use
Cory Doctorow on Epicenter podcast
- “Rubber hose cryptanalysis”; if you can be tied and beat with a rubber hose, then you’re always vulnerable
- His thing is regulatory capture eg all top telecom execs rotating door with regulatory bodies and with competing firms
- We (US) killed our neutral tech assessment / regulatory body, Gingrich believed lobbyists were enough to educate members
- He’s not a fan of financial secrecy, major corrupting influence to democracy and human rights
- Believes PoW intensely energy inefficient
Some random little factoids I learned this week:
NINJA = acronym for someone with “No Income, No Job or Assets”
The Joe Rogan Experience podcast is named after Jimi Hendrix who named one of his albums The Jimi Hendrix experience.
A “baculum” is the penis bone, many mammals have it but humans do not.
Microsoft acquired DOS in 1981 for 75K (!)
Harberger taxes are a rent system where the renter values an item and pays a tax on the self-assessed value. At any point in time, a person can come and buy said item at the amount a renter has valued it.
Some powerful tweets and quotes I saw this week:
“Ultimately, man should not ask what the meaning of his life is, but rather must recognize that it is he who is asked.” – Viktor Frankl
“In the future, we will have more and more of whatever’s holding our attention right now.” – Octavia Butler
And a few final very interesting excerpts from articles I read:
From Slate
One prominent TikTok earworm even seems to originated in the depths of alt-TikTok: The sound known mostly as “Mi Pan Su Su Sum” was originally a Russian cereal commercial, sang acoustically by user @chernaya.princessa, seemingly sped up in a version uploaded by user @isterrrrika, which went viral, appearing in 5.7 million videos and counting. This song is both a prominent case of TikTok’s functionality obscuring the original creator and the absolute earwormiest of all of its viral earworms
Lots of powerful and counterintuitive insights about our environment
- In the United States since about 1800, the production of a good or service has required 1 percent less energy on average than it did the previous year. Nevertheless, embracing the full chain from the primary energy generator to the final user of light or heat, the ratio of theoretical minimum energy consumption to actual energy consumption for essentially the same mix of goods and services is still probably less than 5 percent. No limit to increasing efficiency is near.
- A shift away from eating meat to a vegetarian diet could roughly halve our need for land.
- In fact, careful records of human time budgets show that not only New Yorkers and Indians but also Californians, reputed nature enthusiasts, average only about one-and-a-half hours per day outside. Fewer than 5 percent of the population of industrialized nations work outdoors. In developing countries, the number is plummeting and should be below 20 percent globally by 2050.
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That’s it folks. All typos and misrepresentations are 100% mine!
If you want more, here are the last three random notes:
Til the next one!