Anti-Hero

w.170 | SVB earnings, China, EdTech, demographics, Rishi (please!)

Dear Friends,

Happy Diwali to all those celebrating. As a sign of the times, that list will include New York City public schools, who will recognize the holiday starting in 2023. Go light a candle!

I’m focusing on the content rather than the introduction this week. Let’s get to it.

Today's Contents:

• Good Reads: Sensible Investing

• Tweets I Liked

• Song of the Week: Anti-Hero

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Good Reads: Sensible Investing

Silicon Valley Bank Has Had a Rough Year. Q3 2022 IR presentation here. This is a good raw data source of the state of startups, venture capital, and private investing since SVB is one of the largest players in the early-stage technology banking space. The chart below shows that private fundraising is down, but cash burn is still high, resulting in net outflows during the last two quarters. Yikes.

The Evolution of EdTech: Activity in Private and Public Markets a data report by Dealroom and Brighteye Ventures.

• It’s always incredible to me to see how small the value is of the education market.

• The ENTIRE public value of EdTech companies is $10B less than Uber today ($55B).

• Private EdTech companies will need to reflect some market downs. When will this happen?

• Chart crimes were committed here. Two years of stated totals, two years of stated breakouts. What is today? Spell it out.

We Will See the Return of Capital Investment on a Massive Scale. Russell Napier warns of a 20-year phase of structurally elevated inflation and financial repression.

This was a well-shared post. My view is that it seems in line with what Ray Dalio has been warning for years: “Engineering a higher nominal GDP growth through a higher structural level of inflation is a proven way to get rid of high levels of debt.”

This is the thrust of his prediction, which is also my biggest personal investing fear because it’s so hard to navigate: I think we’ll see consumer price inflation settling into a range between 4 and 6%. Without the energy shock, we would probably be there now. Why 4 to 6%? Because it has to be a level that the government can get away with. Financial repression means stealing money from savers and old people slowly.

I have a hard time following all the actions in Europe and Japan per this point: “Certainly to the ECB and definitely to the Bank of England and the Bank of Japan. These countries are already well on their path to financial repression. It will happen in the US, too, but we have a lag there – which is why the dollar is rising so sharply.”

What’s going on with China?

At a dinner this week during a lull, my friend asked, “When do you think China will take Taiwan?” And I hadn’t considered it too hard before. I got deja vu from the time nine months ago when a friend asked for probabilities for a Ukraine invasion, and it happened three weeks later. So, I don’t know anything, but I am collecting data points. Then again…

China’s GDP blackout isn’t fooling anyone. The key chart below:

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Tweets I Liked

We’ve talked about demographics being destiny. This chart was pretty stark.

Edouard Mathieu @redouad

Based on current fertility rates and age structures, here are the largest declines in population expected by the UN from 2022 to 2100: 🇰🇷 South Korea –53% 🇺🇦 Ukraine –49% 🇨🇳 China –46% 🇨🇺 Cuba –42% 🇵🇱 Poland –42% 🇯🇵 Japan –41% 🇬🇷 Greece –39% 🇮🇹 Italy –38% 🇹🇭 Thailand –38%

Rishi Sunak is running for Prime Minister on a delivery platform. Notable.

Rishi Sunak @RishiSunak

The United Kingdom is a great country but we face a profound economic crisis. That’s why I am standing to be Leader of the Conservative Party and your next Prime Minister. I want to fix our economy, unite our Party and deliver for our country.

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Selfie and Song of the Week: Anti-Hero

Music video here.

Never before has the Song of the Week been a new release. Mostly it’s because the lyrics of modern hits are gibberish. But there’s a first time for everything, and T-Swift is exceptional. I wouldn’t have expected that our crew would play the entire album this Saturday and dub it “great.” So, here we are.

Friend: “Well, her album didn’t get great reviews in the New York Times.”

Me: “Well, I don’t read the New York Times. And what was it that they had to say recently about your business?”

Him: (Smiles).

Me: “Exactly. I’d want to be in the anti-New York Times club with Taylor Swift all day, every day.”

Also, I liked this take. Maybe because I like the concept of the anti-hero, particularly for women where modern heroism will most often look to contemporary eyes as a traditional anti-hero.

Steph Smith @stephsmithio

Perhaps the best example of FU money

“Anti Hero” by Taylor Swift

I have this thing where I get older, but just never wiser
Midnights become my afternoons
When my depression works the graveyard shift, all of the people
I've ghosted stand there in the room

It's me, hi
I'm the problem, it's me
At teatime, everybody agrees
I'll stare directly at the sun, but never in the mirror
It must be exhausting always rooting for the anti-hero

Selfie of the week

This is intended to have more BeReal than Insta’ vibes: I was at an offsite in Sonoma County.

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Thanks for reading, friends. Please always be in touch.

As always,
Katelyn