w.200 | 'Goldilocks' Era, Hype, Pakistan, Venture Dollars, Relocation, Sam Zell
Happy 200th edition. It’s been almost four years of continuous weekly writing. Thanks, as always, for reading.
Good Reads: Sensible Investing
Song of the Week: Apocalypse
Good Reads: Sensible Investing
BlackRock’s Wei Li (Chief Investment Strategist) Says the ‘Goldilocks’ Era is Over for Markets.
A few of her notable thoughts:
On inflation - We have been of the view that, in the US context, 3% is the new 2%
Have a preference for developed markets over emerging markets
If you have a horizon of just two years, in two years’ time, I can say with a huge amount of confidence that we will have already put this “Are we going to have a recession or not?” debate behind us. Already a case can be made to be more optimistic than we currently are.
Income is finally back in fixed income. It may not be the most exciting thing to say you are embracing this, but why not? I want reliable, boring strategies.
The speed at which people are switching to these artificial-intelligence-enhanced kinds of tools has been incredible. What that means for productivity gains is a wild factor that we must consider. We talk about the labor shortage, but in the context of AI, how do we think about that?
Hype: The Enemy of Early Stage Returns. This isn’t a great article. It’s just a useful reminder. The practical takeaway is that if you invest in technology at the peak of its hype (AI today, clearly), you will probably have poor returns. The time to invest in AI was 3-4 years ago. I’m now old enough and have been in the game long enough to observe this psychological phenomenon multiple times. The craziest part is how few people seem to learn the lessons despite them being public and available to all.
A Dozen Things I’ve Learned from Sam Zell about Investing and Business in honor of a great real estate investor:
“The first thing you need to understand is how little you know.”
“When everyone is going right, look left.”
Listen, business is easy. If you’ve got a low downside and a big upside, you go do it. If you’ve got a big downside and a small upside, you run away. The only time you have any work to do is when you have a big downside and a big upside.”
“I pound on my people: taking risk is great. You’ve got to be paid to take the risk. The risk/return ratio is probably the most significant determinant of success as an investor.”
“You can have all of the assets in the world you want, but if you have no liquidity it doesn’t matter.”
“Arthur Miller did a huge disservice to entrepreneurship by writing Death of a Salesman. Salesmen are not scummy and dirty – people you would not want to ring your doorbell. In fact, all successful entrepreneurs are salesmen.”
Silicon Valley’s Civil War. Tech’s leadership is splitting into two elites—and the battle between them will shape America’s future. Article in Tablet Mag.
It’s interesting to see these narratives between politics, technology, and business develop and mature.
Andreessen joins a rising set of counter-elites who view unconstrained individual ambition as the key to human flourishing, admonishing the “smug complacency” that characterizes today’s elites, as Andreessen once put it, and lamenting the lack of vision across the public sector.
For the counter elite to live up to its loftiest visions of individualism, progress, and the unfettered pursuit of opportunity, they must be judged by what they build that is of lasting benefit—not just for themselves, but for the entire country.
Americans Have Never Been So Unwilling to Relocate for a New Job.
Why? The researchers give two reasons:
Diminishing job security has made the costs of moving house seem like less of a safe investment.
Workers want flexibility and want to work remotely.
And for those who can get over those two reasons, comparing the monthly mortgage on a new house versus one purchased in the prior five years has to be a bucket of cold water; plenty of Ph.D. theses on the long-term social consequences of ZIRP are forthcoming.
Song of the Week: Apocalypse
Video on YouTube.
I’ve been listening to the album straight this week, described by critics as an “ethereal, limerent and often dream-like musical style.” Limerence - great word.
“Apocalypse” by Cigarettes After Sex
You leapt from crumbling bridges watching cityscapes turn to dust Filming helicopters crashing in the ocean from way above Got the music in you baby, tell me why Got the music in you baby, tell me why You've been locked in here forever and you just can't say goodbye
Selfie of the Week
Decade friends. This week, I caught up with my long-time friend, Saba Gul. We met in Lahore (her hometown) in 2011. She was one of my close friends in a city that I lived in for most of the year and returned to frequently in the years after. A lot has changed between now in New York City and ten years ago at our friends’ wedding in Pakistan. She started several companies; the most recent is called HeyDays. I’ve been following her writing through a Pakistani feminist community she built called Kamli and an essay that opened with, ‘Bit by bit throughout my life, I was traumatized into my feminism.’
We are both left side parting our hair, though, so some things don’t change.
Recent events in Pakistan, which have not been covered in the United States media, were on our minds. It’s all quite complicated to understand unless you’ve been following closely and for a while. There is an uprising against the army, which has run the place for most of the country's history. Imran Khan, the former Prime Minister and a profoundly complicated character, is at the center of the unrest. Never a dull moment in Pakistan. Although things often feel apocalyptic, the country has an admirable resilience; I suspect its people will continue as usual.
Thanks for reading, friends. Please always be in touch.