Tyler here with this week’s Macro Musings.
As always, if you come across something cool during the week, shoot me an email at email@example.com and I’ll share it with the group.
Recent Articles/Videos —
Vol And The SPX — AK covers the recent bull action in the equity indices and discusses whether it will last.
Intuition In Trading — Wendy and Taylor from Billions help AK answer the question whether or not you should trust your intuition when making your trades.
Shorting Gold — With gold dumping, now is a good time to revisit our bear thesis on the precious metals. AK explains it in this video.
CCJ, FCAU, YTRA — AK reviews a few of the equity positions in the MO portfolio.
Articles I’m reading —
Take a few minutes and read Ben Thompson’s latest post on Stratechery (one of my favorite tech blogs). It’s titled Tech’s Two Philosophies and is a must read for two reasons (1) he shares a short clip from Google’s recent dev conference where they show off their new AI voice assistant (it’s freaking bananas) and (2) Ben does a good job separating the big tech companies in their two different philosophical camps of platform and aggregator, while explaining the pros and cons of each.
Here’s the link (note: we are long google and this video makes me want to buy more).
Next, I’m no Buffett fan boy. I think he’s a wolf in sheep’s clothes… and I prefer Munger of the two. But, regardless, this Buffett site that CNBC put together is pretty cool. It’s got every letter and interview he’s ever done and it’s archived in an easily searchable way. Check it out, here’s the link.
Lastly, if you’re interested in some good commentary on the commodity market, then give this a read. It’s Goehring & Rozencwajg’s (a commodity fund) latest quarterly letter. They’re my go to for insightful takes on the natural resources market. Here’s the link.
Podcast I’m listening to —
This podcast from Tim Ferriss (link here), where he interviews science writer and university professor, Michael Pollan, absolutely blew me away.
I know a couple of veterans who’ve participated in university trials using psilocybin to treat severe PTSD. Each saw tremendous benefits from the treatment and considers it to be one of the most significant experiences in their lives. Plus, it’s non-toxic and non-addictive. So they have the potential to revolutionize how we treat various mental health disorders.
Video I’m watching —
Ray Dalio put together a cool mini video animation series where he shares the most important principles from his book, Principles. It’s definitely worth a watch even if you have already read the book. The whole series is 30 minutes and you’ll come away with a powerful framework for getting what you want out of life. Here’s the link.
Chart I’m looking at —
We’ve been writing a lot about China recently. And if you want to know why, look no further than the chart below.
Since the global financial crisis China has created the bulk of the private credit. And since credit creation = demand creation = liquidity, the rate of this credit creation can have a huge impact on asset prices and global financial markets.
Our view is that equity markets will continue to grind up from here, if and only if China manages its deleveraging well. If China withdraws its liquidity too quickly, the macro landscape will shift dramatically.
There’s no immediate cause for concern, but we’re actively monitoring this chart in order to update our forward probabilities for the rest of the year.
Trade I’m looking at —
I want to talk about Apple (AAPL) really quick because I think they are making the right moves to position themselves for the coming privacy wars.
They’ve already started removing apps from the App Store that share your location with third parties without explicit consent.
And the latest iOS, currently in beta, has been rumored to include USB Restricted Mode, which means that if the password on your phone isn’t entered for seven days the Lightning port shuts down. MacRumors further explains the implications.
With a time limit on the Lightning port, it seems law enforcement officials and bad actors who have physical access to a device will have one week from the time that it was last unlocked to attempt to access it through unlocking tools like the GrayKey, which uses the Lightning port to install software to crack the passcode of an iOS device.
USB Restricted Mode won’t prevent tools like the GrayKey box from being used on an iPhone, but it does suggest that the passcode needs to be discovered within a matter of days, severely limiting the amount of time that law enforcement officials have to get into a device.
I think they are ahead of the game here. Most of the big techs have been playing defense on the privacy front while Apple appears to already be on the offensive.
Quote I’m pondering —
Financial markets, far from accurately reflecting all the available knowledge, always provide a distorted view of reality. This is the principle of fallibility. The degree of distortion may vary from time to time. Sometimes it’s quite insignificant, at other times it is quite pronounced. ~ George Soros
When you spot the distortion — you’ve found yourself an edge.
That’s it for this week’s Macro Musings.