No major updates from Our Man, though he's (still) working on a software (Enterprise, not Consumer) thesis. Instead, another edition of “Things from my Newsblur” - this time some recent(ish) articles that have caught OM's eye, but didn't get enough attention generally.
Live Long – What Really Extends Lifespan
This isn’t actually an article, but a graphic of the way various traits affect lifespan. The strength of the science is clearly shown, and ranges from suggestive to strong. The traits range from the subtle (drinking a little alcohol vs. abstinence) to the more obvious (avoid cancer). Well worth a look! (Dave McCandless, Information is Beautiful)
This 8-Year Old Chess Champion Will Make you Smile
While last week saw a college admissions scandal in the US, this heartwarming article is another little reminder that talent is universal but opportunity is not. (Nicolas Kristof, New York Times)
Into the Dark
The Thai cave rescue seemed crazy at the time. After reading Shannon Gormley’s article, based on months of in-person interviews with the key protagonists, it seems even crazier. The confluence of skill, meticulous planning and luck required not just by the dive-team but also by the support staff (and Thai government) is astouding. It’s the kind of story that if you read it in a book (or saw in a film) you wouldn’t believe. (Shannon Gormley, Macleans)
Humanity + AI = Better Together
Robots are coming for your jobs! Skynet is after your children! Really? Well, the flip side of the popular narrative is that in conjunction with AI - we will become more creative, improve our productivity and powers, make better decisions, be safer as dangerous tasks can be automated and understand each other better. Too good to be true? Well, Frank Chen takes us through those positive arguments. (Frank Chen, a16z)
Here’s why we’re entering the Golden Age of Podcasts
Our Man has been an avid podcast listener for many a year, and it seems that 2018 is the year they finally broke into the mainstream. Perhaps, the hit podcast Serial was the gateway drug for folks. This article shows the state of podcasts in 10 charts, with some thoughts on what’s next! (Dave Zohrob, Chartable Blog)
The Hunt for Planet Nine
Mike Brown is the “Pluto Killer”; a man with dozens of astronomical discoveries to his name, including the dwarf planets Sedna and Eris. Konstantin Batygin is a renowned theoretical astrophysicist, who at age 22 mathematically proved our universe is unstable (don’t worry, we’ve got a few thousand years before Mercury crashes into the sun, or Venus!). After analyzing historical data, they proposed in January 2016 that there was a giant planet orbiting far away from everything. The hunt is on to find “Planet Nine”, and this is their tale. (Shannon Stirone, Longreads)
Amazon’s Anti-trust Paradox
The history of anti-trust in the US is a surprisingly interesting topic, from its use to break-up Standard Oil in 1911 to its subsequent over-reach in the 1960’s and 1970’s, which saw Robert Bork redefine the term “competition” and paved the way for today’s University of Chicago inspired laissez faire approach. Lina Khan’s article, combined with the discussion around ‘Big Tech’, has perhaps paved the way for a new interpretation of anti-trust law. (Lina M. Khan, Yale Law Journal)
Sunday, March 24
Tuesday, March 5
Half-Baked Idea: Chinese A-Shares
[Quick thing: OM changed the provider that sends these emails out, so hopefully you’re all receiving this. I’d say holler if you’re not, but err…hopefully, the new ‘advanced’ software will let me know you’re not (or at least didn’t open this email) else this bit is all a bit moot!]
This is something OM has been pondering for a couple of months; though, he thought (and still thinks, even with the big move in A-Shares) that it would be a late 2019/early 2020 trade.
This idea is all about pattern recognition, backed up by a collection of circumstantial evidence so it will always be a more speculative idea. That doesn’t mean OM won’t take a position in it at some point, though it would likely be a 6-18mos trade and thus not a huge position.
The above is a long-term OEW technical chart of China. If you look at the lows (05/06, 08/09, 13/14, and now 18/19….even back to 94/95) – all down 50%+ from prior peak. All were followed by sharp rises in the following years. If history is a guide, or at least could rhyme a little, this C-wave should last ~2years and if the last few bull markets are anything to go by, the IRR could be spectacular. For comparison, post-06 the market was up 500% in ~2yrs, post-08/09 it more doubled in about a year, and after the 13/14 low it almost tripled by mid-2015. In the case of both post-06 and after the 13/14 lows, the rally started off slowly before going exponential towards the end.
So the technical perspective is that we potentially saw a new major low at the end of 2018. In the short term, MSCI’s recent announcement of mid-2019’s large increase in China’s weighting in the MSCI Emerging Market Index has helped the new bull market establish itself.
Given this good news, why does OM like the ~2 year time frame? Well, he rather suspects it fits well with the Communist Party’s incentives. Consider the following timeline:
- 2021 is the Centenary of the Communist Party of China's founding, marking the start of the “two centenary goals”*. The goals were put down in writing at the 18th National Congress (in 2012) when Xi Jinping became leader. Xi has subsequently linked them to the “Chinese dream”.
- 2022 sees the next National Congress where Xi likely to be the first leader to run for a 3rd term.
The Party has a strong incentive for China to go into those two events with a strong economy. That means using 2019 to sort out some of China’s imbalances - and the trade dispute with the US provides great cover/excuse for this, whether there a deal or no deal! This will prevent overheating when China stimulates and allows them to stimulate aggressively in 2020 to ensure a strong 2021-2022.
So now you know the half-baked idea, expect an update if OM is putting it into the book.
*The other centenary is that of the founding of the People’s Republic of China in 2049.
This is something OM has been pondering for a couple of months; though, he thought (and still thinks, even with the big move in A-Shares) that it would be a late 2019/early 2020 trade.
This idea is all about pattern recognition, backed up by a collection of circumstantial evidence so it will always be a more speculative idea. That doesn’t mean OM won’t take a position in it at some point, though it would likely be a 6-18mos trade and thus not a huge position.
The above is a long-term OEW technical chart of China. If you look at the lows (05/06, 08/09, 13/14, and now 18/19….even back to 94/95) – all down 50%+ from prior peak. All were followed by sharp rises in the following years. If history is a guide, or at least could rhyme a little, this C-wave should last ~2years and if the last few bull markets are anything to go by, the IRR could be spectacular. For comparison, post-06 the market was up 500% in ~2yrs, post-08/09 it more doubled in about a year, and after the 13/14 low it almost tripled by mid-2015. In the case of both post-06 and after the 13/14 lows, the rally started off slowly before going exponential towards the end.
So the technical perspective is that we potentially saw a new major low at the end of 2018. In the short term, MSCI’s recent announcement of mid-2019’s large increase in China’s weighting in the MSCI Emerging Market Index has helped the new bull market establish itself.
Given this good news, why does OM like the ~2 year time frame? Well, he rather suspects it fits well with the Communist Party’s incentives. Consider the following timeline:
- 2021 is the Centenary of the Communist Party of China's founding, marking the start of the “two centenary goals”*. The goals were put down in writing at the 18th National Congress (in 2012) when Xi Jinping became leader. Xi has subsequently linked them to the “Chinese dream”.
- 2022 sees the next National Congress where Xi likely to be the first leader to run for a 3rd term.
The Party has a strong incentive for China to go into those two events with a strong economy. That means using 2019 to sort out some of China’s imbalances - and the trade dispute with the US provides great cover/excuse for this, whether there a deal or no deal! This will prevent overheating when China stimulates and allows them to stimulate aggressively in 2020 to ensure a strong 2021-2022.
So now you know the half-baked idea, expect an update if OM is putting it into the book.
*The other centenary is that of the founding of the People’s Republic of China in 2049.