Hurricane coming, looming energy crisis, return of dividend stocks and a deep dive into René Girard's philosophy
A quiet week in markets is a good opportunity to take a step back and reflect on how much the (investing) world has changed in recent months and prepare for what is coming
“There are three ways to make a living in this business: be first; be smarter; or cheat. Now, I don't cheat. And although I like to think we have some pretty smart people in this building, it sure is a hell of a lot easier to just be first.”
John Tuld (Margin Call)
Financial markets have experienced a seismic shift over the past 18 months. A year and half ago it was all about growth stocks and commodity producers were out of favor; bits over atoms. Now the old world is coming back with a vengeance.
The Oil & Gas sector has been the best performing sector over the past 12 months, and there is no close second outside of the energy sector.
US Treasury Secretary (and former Chairman of the US Federal Reserve) Janet Yellen acknowledged earlier this week that she was wrong about inflation. She didn’t do any better than current US Federal Reserve Chairman Jay Powell and his now famous “transitory” inflation take.
All signs are pointing to US consumers being out of ammo, irrespective of their income bracket.
Jamie Dimon, who is likely to have access to privileged information as CEO of JP Morgan, could not be clearer about what is coming.
The warning is confirmed by the President of Goldman Sachs.
Episodes of the Week
So many good episodes this week on the state of the economy or the looming energy crisis, but my choice this week is an unusual one: The best episodes this week are about René Girard.
René Girard is a French polymath, historian, literary critic, and philosopher of social science who influenced many famous investors like Peter Thiel or Chamath Palihapitiya. The work he did more than 60 years ago could not be more relevant to today’s world, and it’s impressive how many things he got right. I really enjoyed the two episodes below.
Lecture I: Introduction to Mimetic Theory | René Girard’s Mimetic Theory by Johnathan Bi.
Lecture I gives a brief overview of Girard’s life and work. It summarizes the key conclusions of mimetic theory, distilling the most crucial ideas of this 10+ hour long lectures series into just two hours. Be prepared to press the pause button and rewind as some concepts need time to be assimilated. If you liked it this first lecture, there are six more to come!
The Knowledge Project with Shane Parrish | #138 Luke Burgis: The Power of Mimetic Desire
Entrepreneur and educator Luke Burgis goes deep on how understanding mimetic desire can help you better connect the dots between where you are now, and where you want to go. Burgis breaks down the theories behind mimetic desire and the teachings of René Girard, why all of our behaviors are imitative, why we desire things we don’t need, and why this all leads to missing out on aspects of life that are far more meaningful and valuable.
Macro Corner
WTFinance | Are we Approaching an Irreversible Energy Crisis? with Doomberg
The team at Doomberg is one of the best out there to break down how energy markets work. They are a group of individuals who highlight the fundamentals missing from many economic and policy decisions. This episode covers the series of decisions that have led to current high energy prices. The Doomberg team explains how politicians are waging a war against math and physics, a war they can’t win and that has led to many policy mistakes.
Hidden Forces | The Revenge of Risk Rates & the Return of Dividend Investing | Daniel Peris
Daniel Peris is Senior Vice President and Senior Portfolio Manager at Federated Hermes in Pittsburgh. He is also the author of three books that together explore the intellectual underpinnings of modern portfolio allocation, with a particular focus on dividend investing, why it’s fallen out of favor with investors over the last 30 years, and why dividend-paying securities are positioned to outperform some of their more growth-oriented, cashless competitors in the next 30.
Crypto Corner
The "What is Money?" Show | Bitcoin Fixes the Great Reset with Chris Sullivan
This episode is a deep dive into the role Bitcoin may play in defending yourself against those who seek to undermine the foundations of Western Civilization—life, liberty, and property. This episode talks about the history of fiat currency debasement, the importance of property rights and how decentralization is more important than ever in today’s environment.
The Bitcoin Standard Podcast | The Problem with Interest with Tarek El Diwany
This is a fascinating episode that challenges one of the building blocks of finance: Interest. Tarek El Diwany’s book “The Problem with Interest” has attracted attention from scholars of Islamic finance and bitcoiners alike. In this episode, Saifedean hosts Tarek to talk about the morality of lending with interest, why the practice is prohibited in Islam, and how an economy would function without interest rates. They discuss how monetary systems that require the creation of ever more debt impact human time preference, capital accumulation and morality, and whether interest would emerge in a free market monetary system like bitcoin.
Bankless | Marc Andreessen & Chris Dixon of a16z | Reinventing the Internet
a16z just raised a $4.5 billion fund to invest in Web3 projects. Marc Andreessen was a key player at the genesis of the internet while Chris Dixon has led many investments in Web3. In this episode, they explain how Web3 is the logical evolution of the Internet after 25 years of development where a few companies have concentrated all power and captured most of the profits.
