Dear Friends,

Only one person inquired if I was ok this week, so I assume most of you made the transition to the new medium with little challenge.

Contents might feel a bit sparse below this week. I suspect this is true of your other favorite publications, too. Evidence of summer still being upon us, although the talk of getting ‘back to action’ in September has also begun.

Today's Contents:

Good Reads: Sensible Investing
Book Review: Talent by Tyler Cowen and Daniel Gross
Macroeconomics: Oil and Labor
Weekly Song: One of These Things First

Good Reads: Sensible Investing

Back to the trend line. The Covid Rotation turns, and e-commerce penetration is back to the trend line. But which trend line, and which penetration? Here by Benedict Evans.

Entrepreneurial passion diversity in new venture teams. Academic article here. TL/DR: You want the team to be equally (and intensely) passionate, but they can be diverse in the skill or area in which they demonstrate their passion (e.g., sales, product building).

Social capital: measurement and associations with economic mobility. Part 1 here and Part 2 here in Nature. TL/DR: The wealthier you are, the more likely your friend group comes from your college; the lower your income, the more likely your friend group comes from your neighborhood.

Book Review: Talent

By Tyler Cowen and Daniel Gross. Here.

Recommendation: Quick read and comprehensive but lacked insight.

I had high hopes for this book, and it was pretty generic. There are other blog posts and journal articles out there on the subject that might be more context-specific and directly helpful.

One takeaway is that IQ isn’t a huge factor in career success except for inventors/innovators or at the very high end of the achievement spectrum where it matters a lot. Which makes sense to me. Lower-end jobs are more about being conscientious and friendly.

The book lost some credibility with me after the authors accused Michael Jordan of being an insecure overachiever (at least as I read it) and bad team player after extolling the virtues of Elon Musk’s personality 30 pages prior. Wait. What are we talking about here? I thought we were talking about talent.

In a later chapter about “why talented women and minorities are still undervalued,” they attribute a ‘confidence gap’ that is often self-fulfilling that results from being underestimated. OK.

Macroeconomics: “If the Economy Is Shrinking, Why Is Everything Going Gangbusters?”

A couple of notes.

First, one reader emailed me to say I was too hard on Peter Zeihan. So, I thought I’d follow up here to note that my main gripe is the lack of source citations.

One of the original tenets of this newsletter was an emphasis on primary sources to get to a closer examination of reality. Rather than share opinion pieces that are a narrative interpretation of reality. I believe this is more and more important.

I was meeting a fellow VC last week who pulled out this post (snapshot below) from Zero Hedge about Fauci being booed at a Seattle Mariners game. My friend was in-person at the game. Everyone was cheering. There was no booing. Except for the guy holding the phone and filming the video.

The point is that in today's world, I think citing sources is incredibly important because so much of what gets clicks and distribution is a false narrative. Now, maybe that’s not true of Peter Zeihan’s collapse of globalization argument, but it got me thinking about looking for more evidence to confirm or deny the facts.

But, this section is about Macroeconomics. Let’s start by revealing the answer from Bloomberg. It’s about the Oil, stupid. The chart below shows the apparent correlation between S&P 500 ex-Energy and futures. This is confirmatory of the Zeihan argument.

From the same article is the chart below on the River Rhine. Now parts of it are no longer navigable from low water levels. Europe’s supply bottlenecks may continue to intensify. Central to the Zeihan argument is that the breakdown of globalization between the waterway routes becomes untenable. Usually the bigger issue is conflict but climate change can have quite an impact, too.

My macroeconomic interest is in understanding the dislocation in labor markets.

I’m working on a much better write-up of the findings and the data, but let me preview some of the thinking. Then if you would, so kindly, tell me what makes sense and what is totally wrong, that would be much appreciated. We’ll save that for next week.

Weekly Song: One of These Things First

Music video here.

The song is beautiful, but the story of Nick Drake is quite sad.

Nick Drake passed away at age 26 after releasing only two albums. Neither sold more than 5,000 copies on the initial release.

He had depression, particularly during the latter part of his life, a fact often reflected in his lyrics. “His reluctance to perform live, or be interviewed, contributed to his lack of commercial success. There is no known video footage of the adult Drake; he was only ever captured in still photographs and in home footage from his childhood.”

"One Of These Things First" by Nick Drake

I could have been a sailor, could have been a cook
A real live lover, could have been a book
I could have been a signpost, could have been a clock
As simple as a kettle, steady as a rock
I could be
Here and now
I would be, I should be
But how?
I could have been
One of these things first

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

As always,
Katelyn

Declarative Statements

One of These Things First