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ARTICLES
How to Speak Honeybee by Karen Bakker: Bees are fascinating animals. And interestingly, scientists are now actually able to decode some of their language. But, more impressively, scientists are also able – via fake bees they’ve created – to talk to them.
A Two-Part Look at: 1. Principles for Navigating Big Debt Crises, and 2. How They Apply to What’s Happening Now by Ray Dalio: Great article on the history of national debt crises.
The topic of debt levels will likely become more prominent in the future. During the last 40 years of declining interest rates, governments saddled themselves with record levels of debt. And now that the era of low interest rates may be behind us, it’s increasingly important to understand how historical debt cycles came about. To that point, this article by Ray Dalio is an important one. However, as it’s fairly long, here is Dalio’s summary:
- Goods, services, and investment assets can be produced, bought, and sold with money and credit.
- Central banks can produce money and influence the amount of credit in whatever quantities they want.
- Borrower-debtors ultimately require enough money and low enough interest rates for them to be able to borrow and service their debts.
- Lender-creditors require high enough interest rates and low enough default rates from the debtors in order for them to get adequate returns to lend and be creditors.
- This balancing act becomes progressively more difficult as the sizes of the debt assets and debt liabilities increase relative to the incomes.
- A “beautiful deleveraging” can be engineered by central governments and central banks to reduce debt burdens if the debt is in their own currencies.
- Over the long term, being productive and having healthy income statements (i.e., earning more than one is spending) and healthy balance sheets (i.e., having more assets than liabilities) are the markers of financial health.
- If you know where in the credit-debt cycle each country is and how the players are likely to behave, you should be able to navigate these cycles pretty well.
- The past is prologue.
China’s Doomed Fight Against Demographic Decline by Carl Minzner: China has some serious demographic issues. And it’s not evident they will be able to fix them any time soon – or at all.
As we’re currently overweight EM equities (with a meaningful allocation in China), a few thoughts seem appropriate. Although China’s demographics are grim, I believe its equity market remains opportune for investors. First, it is undervalued relative to the developed world. Second, while it faces stiff demographic headwinds, its growth should exceed that of wealthier nations, given its considerably lower per capita income. And lastly, let’s face it, the demographics of developed countries aren’t stellar either. If we only invested in economies with demographic tailwinds, we’d be restricted to nations that feature unstable legal and accounting frameworks. While these countries provide long-term opportunities, they’re considerably more volatile.
Unpacking India's Growth, Geopolitics, Technology and Superpower Potential by Sar Haribhakti and Rajeev Mantri: I’m increasingly coming across bullish sentiments regarding India’s economic future. This interview with Rajeev Mantri of Navam Capital spells out some of the reasons for this.
Reversals in Psychology by Gavin Leech: Psychology research has taught us much about humanity. However, as it’s a social science, there are numerous variables that, well, vary over populations, cultures, and time – not to mention imperfect execution of the studies themselves. As a result, when researchers attempt to replicate the results of many studies, they often come back with inconclusive or different results.
This post by Gavin Leech lists a number of these revisions, including famous ones like: The Stanford prison “experiment;” screen-time being associated with low well-being; stereotypes suppressing girls’ math scores; a “power pose” that lowers cortisol while raising testosterone and risk tolerance; the Dunning-Kruger effect; and the Marshmallow Effect.
Although the social sciences are important, we’d be wise to reserve faith in early studies – at least until they’ve been successfully replicated and done so using the appropriate sample size over diverse populations.
Navigating reality: It’s all about perspective by Daniel Schmachtenberger: The divide and animosity between those on the political left and right is worse than any time I can remember. Daniel Schmachtenberger believes the reason for this schism is that each side only familiarizes themselves with their own perspectives. In this video, he makes the convincing argument (through a brilliant analogy) that part of the solution is to attempt to see things from the other side’s perspective.
How to Make Sense of the LEFT VS. RIGHT Debate by Daniel Schmachtenberger: This video builds on the previous one as it provides useful tools for people of opposite political stripes to use if they’d like to understand where their counterparts are coming from.
Good conversations have lots of doorknobs by Adam Mastroianni: This article made me rethink what goes into a good conversation.
“Givers think that conversations unfold as a series of invitations; takers think conversations unfold as a series of declarations. When giver meets giver or taker meets taker, all is well. When giver meets taker, however, giver gives, taker takes, and giver gets resentful (“Why won’t he ask me a single question?”) while taker has a lovely time (“She must really think I’m interesting!”) or gets annoyed (“My job is so boring, why does she keep asking me about it?”)...
There’s some recent evidence that what makes conversations pop off is indeed the social equivalent of doorknobs. You might think that the best conversationalists wait patiently for their partners to finish talking before they start concocting a response in their head. It turns out that we like people the best when they respond to us the fastest –– so fast (mere milliseconds!) that they must be formulating their reply long before we finish our turn. Abundant affordances allow for this rapid-fire rapport, each utterance offering an obvious opportunity to respond.”
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