Marvin’s Best Weekly Reads January 24th, 2021

“Measure victories over years, not minutes.” — Chris Cantino

  1. Tencent is crushing it.

“It’s no secret that Tencent, the Chinese tech giant behind WeChat and a handful of blockbuster video games, is an aggressive investor. Even during 2020 when the pandemic slowed down economic activity in many parts of the world, Tencent was charging ahead with its investment ambitions.

During the year, the company participated in more than 170 funding rounds that amounted to a total of 249.5 million yuan ($38 million), according to the Chinese startup database ITJuzi. That made 2020 the most active year to date for Tencent’s investment team, which had been delivering superior results in the last decade.

By January 2020, more than 70 of Tencent’s 800 portfolio companies had gone public and more than 160 of them surpassed $100 million in valuation, Martin Lau, Tencent’s president, told a room of investees at the time. The achievement could well place Tencent side by side with some of the world’s top venture funds.”

2. Not sure what to think of this one.

“Fab’s rise and fall is a case study in the perils of over-funding. But it’s also a story about a serial entrepreneur who has refused to give up in the wake of failure.”

3. Travel Hacking at its best.

“Schlappig owes his small slice of fame to his blog “One Mile at a Time,” a diary of a young man living the life of the world’s most implausible airline ad. Posting as often as six times a day, he metes out meticulous counsel on the art of travel hacking — known in this world as the Hobby. It’s not simply how-to tips that draw his fans, it’s the vicarious thrill of Schlappig’s nonstop-luxury life…. But his fans aren’t just travel readers — they’re gamers, and Schlappig is teaching them how to win.

Immediately he became one of the Hobby’s biggest stars and, according to his friends, a millionaire. His revenue comes from three sources: impression-based ads on the blog; the PointsPros consultancy; & “affiliate marketing,” which means collecting a commission from credit-card companies each time a card sign-up originates from his blog.

Schlappig admits that affiliate marketing gives him a vested interest in the very companies that many Hobbyists game. A garden-variety Hobbyist owns at least a dozen credit cards; many have more than 40.”

4. Five flag strategy. This is an old article but still really relevant in this day and age.

World is definitely becoming less free so this is one way to diversify (and believe this is not always about lowering taxes).

5. So fascinating to watch someone actually try to implement the 5 Flag strategy. It’s complicated.

6. “In other words, smart money has been looking for an alternative to China for a while. And given that business supply lines are often already optimized to have a certain flow, it makes sense to look for neighboring countries.

That way, you can build factories in several nations, like Vietnam, Cambodia, Malaysia, etc., and pick up your shipments in the exact same spot you used to.

This is why frontier economies, and more specifically Asian frontier markets, are set to outperform just about any benchmark. At least over the long-term.”

“The frontier economies of Asia are in the perfect economic and demographic position to take advantage of this global shift in commerce. Every world power has a vested interest in the development of this area of the world.

Additionally, growth in developed countries, weak as it is, will be difficult to maintain.”

7. Well this is an extreme way to save money. A for effort.

8. Long one but interesting.

“The point of including this is to put us all in the mindset of…me, or anyone working in finance & tech, probably living in a mental future that far outpaces the physical present. The pandemic partially seemed like an opportunity to corroborate the promises we’d been hearing for years (or at least, I’d been hearing for 2 years, and started attending “Future of Retail”-themed conferences hosted by investment banks).

Target added 10 million digital customers in the first half of the year and Walmart doubled their eCommerce sales. Still, despite all of this, online sales were just 16.1% of the overall total at their peak in the second quarter of the year.

I also wonder whether this understanding is influenced by the fact that a lot of people who work in tech, finance, and media also happen to live in New York and California — where retail has arguably fared the worst.”

9. “The new economy needs to learn how to operate in an entirely virtual manner. This means the following items are needed: 1) warehouses, 2) virtual assistants, 3) delivery services, 4) smaller private schools dedicated to skills, 5) copywriting copywriting copywriting, 6) graphic design, 7) software updates — living breathing code, 8) digital training schools — think esports camps similar to a regular sports camp and 9) individualized video education and entertainment .”

“Many say that investing in drug companies or degenerative platforms like Only Fans is bad. The reality? This is likely where a lot of money will be made. A. Lot.”

“In the future, call it 2040 or so, the answer will be a bit different: small internet business and technology. Those two areas are the future and there is no reason to fight the trend. While you’ll always find exceptions to the rule, the trend is clear as day at this point.

The second major item here is that taxes and individual autonomy will increase.”

10. This has held up well I think.

“Frontier markets are a step below emerging markets in terms of development. However, they tend to avoid recession since they’re less exposed to the international market and its whims.”

11. Damn. This really hit me. I really miss seeing my parents in person. DAMN pandemic.

“look around you, all these people will be gone one day, especially the ones who spent their whole lives looking after you, yes you. Think about that once in a while. Spend your time, love, energy, and emotion accordingly. Know this: inside every 80 year old is an 18 year old wondering what the fuck just happened. We’ll all get there.”

12. This is an old one but does it still seem even more relevant now. China’s dystopian future.

13. This is worth a read.

“A hard thing to wrap your head around in economics is the idea that two opposite things can be true at once.

Consumers are in the best shape they’ve been in, ever.

A huge portion of consumers think that’s bogus because they’re in the worst shape they’ve been in, ever.

Both are true.

Two different worlds.”

14. I’ve always been attracted to frontier investing. Never heard of Lundin but he is the Indiana Jones of investing.

“Lundin’s investment approach?

He focussed on buying the riskiest investments in the most exotic corners of the world, which allowed him to accumulate assets for the proverbial pennies on the dollar.”

“If he were still alive, Adolf Lundin may have reminded investors of his favourite motto: “When the going gets tough, the tough get going.” The founder of the Lundin group had a lifelong knack for topping up his holdings during tough times. Provided, of course, the data backed up his belief that a turnaround was going to come. E.g., his investments in Russia got absolutely clobbered during Russia’s 1998 debt default. Nine years later, Russia was back on top of things and the Lundin holdings had risen to be worth billions of dollars.”

15. “As often in these cases, the company came around for another round of speculation and hope. Few such companies truly die and vanish. Instead, they usually simply go dormant for a while before the next generation of hopeful entrepreneurs and investors have another go at it. Entrepreneurial dreams tend to have seven lives.”

16. Let’s hope so. I’m quite excited for this. New roaring 20s!

17. “A16Z is a media company that monetizes through VC.”

That observation becomes truer by the day.

While there’s a lot of loose talk on Twitter about cutting out the media and “going direct” — publishing your own story to the world without the press as an intermediary — Andreessen Horowitz is really doing it, consciously and methodically. The firm’s strategy has dramatic implications for the future of media and the venture capital industry.

This is the story of how Andreessen Horowitz disrupted the world of venture capital by cozying up to the media and then, how they purposefully threw that relationship away.”

18. This is pretty much the game in an extremely competitive Silicon Valley.

“At the time, it looked like Sequoia was doubling down on a losing investment. In retrospect, it was a genius move. Sequoia had the advantage of being an early investor in Chinese delivery company Meituan. The firm’s partners knew that if someone could make the food delivery model work in the United States, there was a lot of money to be made, so it invested when everyone else was getting nervous.

The round certainly established that Sequoia is not a cuddly investor. Here you have the company’s main partner investing on the cheap when a young founder wants to solidify his unicorn status.

Of course, it would have been better for Sequoia if DoorDash didn’t need the money at all. And this is an essential point: these costly fundraising rounds dilute early investors and the company’s founders.”

19. This is why I read so much Science Fiction.

“The cyberpunks anticipated the future of technology to an almost eerie degree. Other than the prediction of industrial technologies by the likes of H.G. Wells and Jules Verne, it’s hard to think of when sci-fi authors have been more on the money.”

“Cyberpunk is no longer sci-fi, it’s just the world we live in. Turn on the news, and there’s cyberpunk. Not even just the technology, but the social predictions too. People in San Francisco are living in shipping containers while billionaires are trying to colonize Mars with private space fleets. You can carry a sword and be a street samurai in the state of Texas. Online media megacorporations are able to shut down the President of the United States. As William Gibson wrote, the defining characteristic of living in The Future is that it’s not evenly distributed.”

20. Crypto is the future so this is worth paying attention to.

“According to Sonnenshein, the six themes that investors should look for in 2021 are:

-Decreased career risk associated with digital-asset investing

-Growing interest among financial advisers

-The growth of North American and clean-energy crypto mining

-Increased stablecoin integration

-Nation-state adoption of digital assets

-New regulatory developments”

21. Good for him. Also appreciate the honesty here for other founders. Not everyone has to take a startup from early stage to IPO.

“I stopped enjoying my role probably about two years ago… as we grew from a scrappy startup that was iterating and building stuff people really love, into a really important U.K. bank. I’m not saying that one is better than the other, just that the things I enjoy in life is working with small groups of passionate people to start and grow stuff from scratch, and create something customers love.

And I think that’s a really valuable skill but also taking on a bank that’s three, four, five million customers and turning it into a 10 or 20 million customer bank and getting to profitability and IPOing it, I think those are huge exciting challenges, just honestly not ones that I found that I was interested in or particularly good at”.

22. This is where the Silicon Valley hype and groupthink will be valuable.

Miami is literally becoming a new major tech center overnight due to an impressive biz friendly & Twitter saavy mayor, great weather (for now) & a critical mass of major tech players escaping from the lockdowns, high tax regimes and incompetent city governments in SF & NYC.

23. “Buying Bitcoin could be considered a form of gambling. Indeed, many middle-class hobbyist traders accrued life-changing amounts of wealth over the past year, usually by experimenting with risky software. For people like Paul and Saeed, who generally avoid experimental trades and lack alternative investment options, Bitcoin’s price appreciation is helping them get through a period of abysmal job markets and intermittent lockdowns.

People don’t need to live in a dictatorship or a country suffering from high inflation to benefit from Bitcoin.”

24. Lots of nuggets of wisdom here for personal development.

“Early on when I would hit a plateau in personal development I would wrongly think I was “done.” That mentality meant when the next period of evolution came it was extra painful. Today I recognize the work is never done. That allows me to enjoy the periods of relative stability while also knowing I will be called to grow and change again. It might be going too far to say I’m looking forward to it, but I no longer fear it which is real progress.”

25. A long but really fascinating read. Taiwan as case study, German and USA as ones NOT to follow on how to manage a pandemic.

“In highly ideological or religious or culture war driven nations this is all but impossible because those forces blind leaders to parts of the population they think of as evil.

But if you can’t deal with reality as it actually is, rather than how you imagine it to be, you can’t deal with a pandemic.”

“Beyond big data and contact tracing, the Taiwan government understood incentives really well. You get paid to stay in quarantine but if you break quarantine you get fined 1000x what they paid you so it pays to stay inside until you’ve proven you’re not carrying the virus.

Don’t underestimate how hard it is to get incentives right.

Incentives are tricky. Pick the wrong incentives and people game the system.

You can’t fight human nature. If you try, it only backfires. If anything characterizes the Taiwanese approach it’s realistic approach to human nature balanced with sane policies that work.”

26. I’m pretty bullish on Poland and much of Central Eastern Europe in general.

27. Rise of the Emerging Markets…..been happening for a while now.

“Emerging markets have been growing at a rapid pace for years and it is because they are getting access to the same technology that the Western world has had for awhile. Additionally, they have a young population that is highly productive and continues to push these countries further and faster than the developed nations….

emerging markets are worth continuing to pay attention to over the coming years. Not only are they growing at a fast pace, but they dealt with the pandemic relatively well, and now we are going to see them start to benefit from decentralization, Bitcoin and cryptocurrencies, and the larger digitization trend that is already underway.”

28. “I think retirement is stupid. Men are objective-seeking missiles, and there are exceptions to this, but once men retire, that’s usually when they die. I never plan on retiring. I think it’s a mistake to look forward to retirement.

Instead, as you get older, focus more on aspects of the work you enjoy doing. That way, you can work because you want to work, and you can work the hours you choose instead of the hours you have to work.”

29. I like all these places. Taiwan, Georgia, Serbia, Ukraine, Portugal, Mexico & Hungary are tops for me.

“You can find the cheapest countries in the world. You can find the safest countries to live in. But if you want both, Eastern Europe (Georgia, Serbia, Belarus, Armenia) is a great place to start.

If you know what you’re doing in Asia, places like Taiwan and Malaysia are also very safe and reasonably affordable. There may be some purse snatching, but there isn’t a lot of violent crime.

Latin America may be a bit more dangerous but there are plenty of safe and cheap places if you buy in the right neighborhood.

The point is, you can have a lifestyle where you’re getting a lot of value from your money in a safe place.”

30. Go Taiwan. Arguably the safest place right now outside of New Zealand. BTW: I’m actually super bullish on the USA right now, so I’d consider splitting the year between Taiwan, somewhere in Europe and the USA.

31. Hmmm…….interesting thoughts here. Basically take ownership of your life.

32. This should make us all optimistic about the future.

“So the two reasons solar and batteries haven’t yet produced higher aggregate productivity growth are that they haven’t been installed in large volumes yet, and they haven’t gotten so cheap that they dramatically lower the price of energy yet. But current trends give us every reason to believe that both of these things will happen.

But in addition to measured productivity growth, green energy has another benefit: Sustainability. They help prevent catastrophic climate change, for one thing. And also, because the supply of sunlight is not limited, solar frees us from the need to constantly invent new and better extraction technologies just to hold energy costs constant.

Neither of these things adds to current productivity, but they both add to expected future productivity.”

33. Health and wellness has always been important. Even more so going into 2021 and the ongoing pandemic.

34. For Crypto but also relevant for Stocks and most other investments.

“If you’re in it for the long run, act like it.

Constantly checking prices is how you end up falling into FOMO (fear of missing out), making stupid decisions, believing shills, not sticking to your original strategy, etc.

Seeing your investments grow (or fall) so quickly can be very exciting. For this precise reason you should avoid it.

Remember that it is always best to make investing decisions with the least emotions involved.”

35. “Brown needs a different sort of fitness now, because his days are so intense. “Before, it was about being competitive athletically,” Brown explains. “Once I got into graduate school, I started to realize how important exercise was both for mental acuity and also mental endurance. I multitask all the time. I realized I have to work out to be as productive as I want to be.”

36. This makes you appreciate that your life can be very much worse. We should all be valuing the basics of living and freedom and making the best of things…..always.

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Ever curious: Tsundoku, Reader, Aspiring Shokunin, World traveller, Investor & Tech/Media exec interested in almost everything!

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