Survival of the smartest 💡
Art's moment in the sun and a search for meaning amidst a financial world seemingly racing to ruin. This is Issue #010 of Forward.
“In order to keep up with the world of 2050, you will need not merely to invent new ideas and products but above all to reinvent yourself again and again.”
— Yuval Noah Harari
In 1930, renowned economist John Maynard Keynes posited that the 21st century would be one of leisure and reflection. A time when humankind would have solved their most pressing needs with automated solutions, and be free to enjoy a life of leisure and meaning.
2021 paints a very different picture.
Progress is rapid, but its pace is increasing at an exponential rate we are struggling to keep up with as a species. Wealth inequality is widening alarmingly, attention spans are at all time lows. Our workdays are longer, our sentences shorter.
We do not live in the utopia Keynes envisioned. We live in constant dread of becoming irrelevant.
Is this the fate we are doomed to? Perhaps not, but we’ll address that at the end of this newsletter.
Where do we go from here?
In the moment, the events rooted in the world of finance and their outsized impact on the global narrative may seem isolated, but the more you zoom out for context, the more absurdist everything seems.
From Tesla’s stock price taking off to altitudes rivalling SpaceX’s rockets, retail traders taking on the system with the GameStop saga, and the increasing influence of financial institutions in the performance of the global economy, ‘financialization’ is now part of our culture.
💡: Financialization (noun): the process by which financial institutions, markets, etc., increase in size and influence.
In this detailed take on everything from meme-based valuations to plummeting interest rates, John Luttig explores ‘lottery culture’ and ‘equity culture’, and analyses how we got where we are today, and where we might go next.
A prick and a pop
Even as the hype builds and memes propagate, long time market experts have slowly been trying to voice their concerns about the way the economy and markets are behaving. The latest is Jeremy Grantham, co-founder of Boston-based asset management firm GMO. Grantham has a long history of studying the markets, and his assessment of the current state of affairs is that we are once again in a bubble, and might be on the verge of a crash rivalling the one in 2000, or even that which kicked off the Great Depression. In a recent episode of the Colossus podcast (65 min), he goes over the 3 signs of a bubble:
Prefer to get his views in video form? Here’s a video interview with Bloomberg Markets and Finance in which he also offers up his opinions on gold and everyone’s favourite emerging asset class/currency/speculator fuel — Bitcoin. (39 min)
#BackToTheBasics: What is Money?
If you’ve been reading Forward you probably know how much we talk about money. Not just in a superficial sense, but in really seeking to understand it and how it drives the world. If you ever find yourself on similar trains of thought, this post by Yodaa might be a great place to start.
🔗 The Story of Money: Past, Present, and Future
Disclaimer: Yodaa is a product of Atlantis, which also owns NEO.
“Holy #$@”
That’s what Mike Winkelmann, the digital artist otherwise known as Beeple, said when he sold 5,000 days worth of his digital art (he’s been posting one every day since 2007) as an NFT on Christie’s for over $60 million. This makes it the most expensive Non-Fungible Token (NFT) sold thus far.
Wondering what an NFT is? We’ve covered them in more detail in our last issue of Forward. Read it here.
What warmed our heart more than the impressive number or the possibilities opened up by crypto-backed digital creations, was the artist’s live reaction to the sale. ♥ (1.5 min)
A SPAC of bother
Ah hedge funds. Every new piece of information that comes out about them just seems to further the stereotype of fat cats preying on poor retail investors. The latest is this article from the Financial Times, which details how hedge funds are capitalising on the boom in SPACs to make high returns with next to no risk, often leaving retail investors hanging in the process.
💡: Special Purpose Acquisition Companies or SPACs are companies that raise capital via IPOs with the objective of helping take promising private companies public as well.
Long story short: Hedge funds invest in IPOs and are assigned shares (in the SPAC) at very low rates, which in turn is invested in US treasuries (and is hence almost risk free). If the SPAC finds a high profile target company to take public (which happens more often than not in the current climate), shares of the SPAC boom, attracting retail investors at market price, helping the hedge funds exit their positions with a sizeable profit. The kicker? Once the deal to take the company public is closed, the hedge fund, which already made a significant profit, gets shares in the newly public company, again at an attractive price. High return, minimal risk. 🤷♀️
The world behind Bitcoin
Before the big rally of 2017 and the frenzy that is ongoing now, Bitcoin’s premise and future were examined in this documentary, explained through the eyes of a 35-year-old computer programmer who developed an interest in the cryptocurrency. Watch this interesting exploration of the cryptocurrency before the hype it experiences today. (96 min)
“All fiction that does not violate the laws of physics is fact.”
Stuff we loved this week
This interview of Stripe co-founder Patrick Collison. It’s got everything from entrepreneurship and scale to flying cars, advancements in biology, and thoughts on the future. Enough summarising, just check it out.
Cathie Wood, CEO of ARK Invest, paints a picture similar to Jeremy Grantham in her overview of ‘market worries’, where she tackles market volatility, potential bubbles in the bond market, and much more. (39 min)
Warren Buffett is still at it. The ‘Oracle of Omaha’, now 90 years old, recently released his annual shareholder letter to Berkshire Hathaway investors, outlining his wins in Apple and Coke, and the blows his portfolio took thanks to how hard COVID-19 hit aviation last year. Any reference to stonks and memelords is noticeably absent. Stay classy Warren. 👌
Food for thought
AI can be at once ominously prescient and comically dumb. Even as we depend on it to intelligently solve many human labours, sometimes all it takes for things to go hilariously wrong — is a pen and a piece of paper.
Decoding the world around us through the lens of finance and wealth is sometimes a tiring job. Can you blame us for searching for meaning and purpose in Rick and Morty? Here’s the show’s co-creator Dan Harmon attempting to decipher the meaning of life. (3 min)
“The knowledge that nothing matters — while accurate — gets you nowhere.”
On that existential note, we’ll leave you to better understand the human condition with our recommended read for the week, David Deutsch’s The Beginning of Infinity.
We began this issue with the grim realisation that our world is progressing at a pace that is too fast for us to realistically keep up with. The best solution proposed by the author of the post we quoted, was this:
Outlearn others and let your knowledge compound: Learning is the ultimate productivity hack. In other words, it provides the greatest leverage. It’s the tool that the greatest innovators and business thinkers of our time (Elon Musk, Jeff Bezos, Bill Gates, Warren Buffett, and others) use to get ahead.
If that’s the route you choose, we’re constantly creating resources to help your pursuit of knowledge. You can access the entire Forward archive here, or read more great content on entrepreneurship, productivity, and personal finance on the Yodaa blog.
Forward is now 10 issues old! It’s a small milestone for us, and we wanted to appreciate you for reading our little message in an email every fortnight. If you’re enjoying our work, please do share it widely. In case some kind soul did send you this, do subscribe to us by dropping your mail in the box below. We’ll see you again in 2 weeks, right in time for Sunday morning coffee. ☕
Until next time,
Your friends at NEO.