Marvin’s Best Weekly Reads Oct 16th, 2022

“Belief creates the actual fact.” — William James

  1. This is great news for Ukraine! Kerch bridge is DONE & hence logistics for Russia to properly support their barbarian criminal army!

2. “But Ukraine has shown remarkable resilience in the face of a Russian attack that has deliberately targeted economic and infrastructure facilities throughout the country and not only near the front lines.

The Ipsos poll shows that the majority of employed Ukrainians in major unoccupied cities surveyed are still receiving their salaries on time and, for those that are delayed, the delays are usually less than two weeks. These data suggest that Ukrainians have managed to maintain a largely functional economic and financial system despite their pre-war challenges and the ravages of a brutal invasion.

Ukrainians have fought the Russian army and are driving it back with Western weapons and cash, but no Western soldiers. They are keeping their economy alive with Western money but their own expertise and ingenuity. Ukraine has shown in this terrible trial by fire its determination to make itself free and functional. That is an effort worth investing in.”

3. “What I find most remarkable about these texts isn’t Elon — he comes off mostly OK in my view. It’s the people around him. It appears our idolatry of innovators has seeped into the minds of the uber-wealthy, sickening them with an uncontrollable tendency to fellate the cool kid for a chance to sit at his table in the cafeteria. “I would jump on a grenade for you.” If anyone ever tells you this, and they’re not literally in battle with you, it means they are a fan … not a friend.

The undoing of many powerful people is that they enter a hermetically sealed bubble of fake friends. Enablers, not people concerned with their well-being.”

4. “Output: surfing, deep work, writing, giving talks, advice, organize…

Input: focused discovery, research, workouts, deep conversations, reading…

You feed your mind and body in the afternoon and evening, letting your mind process everything new while asleep during the night, and then create the following morning until noon. Once you get into this positive and productive loop, the quality of what you create increase and you hunger to learn grows.

Now, reality doesn’t always work on our schedule but small shifts in how we design our days can have a big impact over time. We need to shift away from the factory mentality where we show up for others at 9 am and check out at 5 pm to show up for ourselves in ways that builds long-term value on our own terms.”

5. This is worth listening to. Energy is key. And the US dollar will be around longer than people think.

6. Started reading this book “Chip Wars”. It’s excellent and this interview gives you a preview on the importance of semiconductor chips and geopolitics.

7. Q3 was slow for Venture Capital. Q4 is picking up but we only have 6 more weeks left in year for any startup trying to fundraise.

8. “Entrepreneurs would do well to seek new capital as an extension of the last round if the startup hasn’t made enough progress for an up round. When it hasn’t, and a down round is inevitable, it’s much more challenging, but all is not lost. Figure out the options, get capital in the business, and most importantly, get momentum back.”

9. This info should be taken as directional data in my opinion. But in general we are in downward trend and question whether Q4 will be substantially up.

“Venture funding for the third quarter of 2022 totaled $81 billion, down by $90 billion (53%) year over year and by $40 billion (33%) quarter over quarter, according to a Crunchbase News analysis. While funding for the most recent quarter will increase a little in the coming months as stealth fundings are announced, this is a huge drop in funding compared to prior quarters.”

10. “Humanity now fights a two-front war. A war against an invisible virus (I know your Commander in Chief might have told you COVID is over, but viruses don’t adhere to election cycles and their economic impacts linger long after the last rapid-test clinic has shuttered); and an undeclared World War between US / NATO and Eurasia / Russia / China. The current policies of the fiscal and monetary authorities are driven by their attempts to mitigate the economic effects of these two conflicts.

Given that all politicians — elected or not — are focused on short-term myopic policies, they typically default to printing money to solve nearly all issues.There are very few problems that an infusion of cash can’t fix, which often makes printing money the easiest and quickest solution; it can be done immediately, without much discussion or deliberation.

The alternative — the long-term restructuring of our global economy — would entail immense pain for certain stakeholders, and would necessitate having an honest conversation about the true state of our civilisation. Both of those requirements are non-starters for our short-sighted political friends, so regardless of whether your government practises capitalism, communism, socialism, or fascism, they all inevitably turn to “printing money-ism” to paper over any and all problems.

America is self-sufficient in food, fuel, and people. China, Europe, Japan, and the UK are not so blessed. America can be an autarky if it pleases. As a result, the Fed has the luxury of being able to prioritise domestic political concerns regarding inflation over and above supplying the world (and most of its allies) with a constant flow of dollars.

A constant flow of dollars allows the rest of the world to print their currencies and still afford to buy energy in USD terms. It’s a relative game, and if the strongest player goes their own way, everyone else is left to suffer.”

11. Understand how the system works. One Backed by the US dollar.

12. Insanity. Shows how clueless the environmentalist movement is.

“In response to this unfolding ecological horror show, Greta Thunberg, Greenpeace, WWF, Extinction Rebellion, Rep. Alexandria Ocasio-Cortez (AOC), Sierra Club, and the Natural Resources Defense Council have mobilized millions of people to take to the streets across the Western world to demand the building, continued operation, and re-start of shuttered nuclear plants; the expedited building of liquefied natural gas (LNG) import and export terminals in Europe and North America; and expanded natural gas production in North America; and the beginning of fracking in Europe.

“The energy crisis and the climate crisis have the same solution!” shouted Thunberg to a cheering audience in Germany, many of whom had glued themselves to a nuclear plant at risk of premature closure. “We need to immediately expand the use of nuclear power and natural gas to prevent the burning of garbage, wood, and coal!”

In response, Germany and Belgium announced the continued operation of nuclear plants and the re-starting of closed ones, and President Joe Biden and Canadian Prime Minister Justin Trudeau announced the expedited production of natural gas and LNG.

I’m kidding, of course. No, what climate activists have actually done is the exact opposite.”

13. “The criticality of The English Project lays bare a rather self-evident truism: oil is inherently more valuable than coal. While Britain was awash in coal, it couldn’t power its airplanes with the stuff. Nor tanks, ships, or trucks. Coal has important but limited uses, whereas oil can be refined into gasoline, diesel, asphalt, greases, and all manner of useful petrochemicals. As the Roughnecks so ably demonstrated, the distinction can be the difference between victory and defeat.

The passage of time may have altered many things, but it has not disturbed that truism of inherent value. And yet, we observe today a most unusual development in relative prices across the energy markets…………the energy price of coal is now higher than that of oil!

We initially pondered whether this might be evidence that the paper price of oil is being manipulated downward by the Biden administration, something many of our contacts in the industry have been saying privately for weeks.”

14. Nigeria is an Interesting market to invest in.

“But, a few things were clear on my recent visit to Lagos. Demand for basic goods and services in Nigeria, such as foodstuffs, banking and payment solutions, as well as telecommunications, and building materials, are all growing gangbusters. That’s despite the country’s many macroeconomic and political challenges.

Sales at BUA Foods were up 72.8% in 2021 vs. 2020. At GT Bank they’re up 10.4% for the second quarter of 2022 vs. the corresponding quarter in 2021. MTN Communications has enjoyed five consecutive quarters of better than 20% growth, and Dangote Cement has seen six consecutive quarters of growth above 20% year on year. In four of those quarters, sales growth exceeded 30%.”

15. “So net net in all this, don’t panic. Cool heads in the WH. They are winning. But they are still willing to talk to Putin, and I think are sending exactly the right messages to Putin. He will use nukes if he thinks there are no escalation risks. The US just spelled out that they will escalate if Putin uses nukes. So I think this suggests less risk now of a mistake as Biden has been crystal clear with Putin as to the consequences if Putin goes down the nuke route.”

16. “While it seems a bit scattered there is a ton of stuff in here:

1) META going to shut down offices/leases — expect other firms to do the same,

2) META can’t even convert on Android/Windows despite having the data — not good for general economy,

3) real influencers will be revealed and the days of getting a $25K check for fake page views are dead,

4) the valuable brands/influencers will gain significant market share, 5) if you want to go far you need to build a real lasting group/community. Please don’t bother disagreeing since there are *ZERO* Fortune 500 companies with only one person running the firm and

6) Twitter will be the first test run of trying to change/improve social media operations.”

17. The fascinating story of Costco’s 4.99 usd Rotisserie Chicken.

18. This is horrifying and why it cannot be allowed to happen.

“What are the implications of a Chinese Communist Party victory for the future of American-style democracy? What would that mean for humankind?

Today it seems unthinkable, but it may be coming: totalitarianism expressed through a state-run, artificial intelligence system that knows billions of people better than they know themselves. What would that even look like? To avoid the numbness that comes with abstract, hypothetical thinking, open up your mind and make it a personal vision. Imagine you are part of the next generation. It’s you that’s being born into a future where China’s government has AI supremacy and global domination.”

19. 2015 called & want their business model back. Accelerator programs are irrelevant.

20. “In Europe, only 8 percent of investors have worked in a fast-growing tech company.” Hinrikus explains. “We are decades behind the US. Founders have a brain configured for what life for entrepreneurs is like. There are too many investors asking why legal costs are higher this quarter than last quarter. That [sort of thing] doesn’t make or break a company — but ex-founders can zoom in on the things that matter.”

21. Hope more Russians come to this conclusion soon.

22. “Putin has nothing to say about the future. He seems to have no idea of what Russia itself might be, as a state or a society, beyond the conflicts that his own mysticism is supposed to sanctify. His references to the past as it wasn’t leave open the question of what “Russia” is or might become.

Catherine, at least, had an idea behind her imperialism: that the Russian Empire was joining general European practices and becoming a European empire, complete with a handy link to the ancient Greeks.

Putin, who presents his wars for Crimea and for Ukraine as part of a larger death struggle with the West, does not even have that. His imperialism is for its own sake, or perhaps just for his own sake. His profound mischaracterizations of the past, leading as they do to absolutely nothing, are the slippery edge of an abyss, into which contemporary Russia itself is falling.”

23. “The survival of your people in the true struggle depends on your ability to excel in war. The Ancient Greeks loathed War. They also had to endure great and terrible hardships in their lives because of the consequences of war. Despite this, they were good enough at war that we still admire them today. We have given the Spartans immortal fame for their stand at Thermopylae. The Spartans themselves believed they were descended from the demigod Herakles who himself is a hero who’s passed through the ages. And we remember them precisely because of War.

The right nature is the one that honors War as Father. Not only because it ensures the survival of our people, but it’s in our blood. We were selected for our ability to wage war. The ultimate trade for the ultimate practitioner. There is a reason mankind has become the ultimate disciples of War. His bloodied sword guides us toward some greater purpose.

Where the Ancient Greeks despised War, the Romans revered him. They did not have the kind of flash and finesse of the Greeks at the time. They were a manly and warlike people facing threats on their borders. They saw the world through War. This is the better attitude to take and the reason why the Roman Empire lasted so long.”

24. “Big picture is Tech and Mortgage *Brokers* went bust first. This hasn’t caused layoffs yet in the rest of the industries (payments, Wall Street, Accounting and even Law since they usually help set up firms) are all going to see cuts. Sure there will be pockets of good but the big trend is going to be downsizing, more automation and a big waiting game. Eventually the sellers of homes will be forced to blink so at this point we’re about 10% of the way into a buyers market (using that chart above it means don’t bother yet).

Bonus — Pivot and Deflation: Is there potential for deflation in a year or so. The answer is actually YES. The problem is that people are assuming this happens a lot sooner than expected. For deflation in pricing you need to have unemployment go up. The reasoning is simple. As long as people are getting paid, they will still be able to cover all their stuff: mortgage payment, expensive dinners etc. When the paycheck goes away *then* and only *then* are tough decisions made (selling that vacation home, selling that extra car etc.).”

25. Important discussion on China peaking and the fact that they are in big trouble. This is also why we might be at risk for war.

26. “To simplify life, reduce what’s easy and focus on what’s hard. What’s easy everyone can do, what’s hard only a few. Make the hard look simple.”

27. “2022 What Changed? In 2022 a few things have changed. We’ve made some significant adjustments. First M&A is no longer the best option. Back in 2010 it was one of the best options since we were coming out of a recession, deal activity was okay and the hours were lower if you did some socializing and figured out how to avoid the sweatshops. At this point the rank order is: 1) Tech, 2) Sales and 3) Investment Banking M&A — ECM and DCM should still be avoided since limited skills are developed.

The second thing that changed is remote work. If you can find a single remote job (even if it only pays $50,000 a year), you can actually slaughter the 10 year plan to a million and do it in 4–7 years with a high probability of success. You simply work that remote job for 1–2 years and use that to fund your WiFi biz.

The fourth item that changed? You have to be more patient and careful right now. With debt issues blowing up and deleveraging taking off, you want to make sure you have certainty in your e-com/wifi biz launch. Better to start out slow with some sort of consulting/time for money exchange in year 1–2 because budgets are going to be under strict scrutiny.

The fifth and final item is that you should heavily assume career path money is going to dwindle. This is a major issue for many people reading right now. It’s no longer possible to move up the chain quickly in the vast majority of organizations. Since numbers are down massive, the older people will stick in their seats for as long as possible. No one wants to pay up since revenues are flat or down. This means you have to create the upside in income *yourself*. Your boss doesn’t care about you.”

28. Russian orc army is toast. Logistics matter.

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Marvin Liao

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