The Fidenza Macro digest, Aug 21
Eight things I'm reading or listening to
Principles for Dealing with the Changing World Order - by Ray Dalio
This is a must-read for every investor. Dalio studied civilizations and empires going back many hundreds of years and looked at the factors behind their rise and fall. The takeaways I got from reading this book were that we will see a turbulent change in the US-led global world order in our lifetime. In this process it is likely that dollar-denominated financial assets such as cash, debt, and many securities will suffer from permanent devaluation and loss. The timing of when this would happen is uncertain - it could happen in a few years or a few decades. It just makes me want to allocate more into hard assets like gold, bitcoin (to a lesser extent), and international real estate.
For those who don’t have time to read the book, here is the 40-minute video summary.
Here’s a recent article by Ray Dalio about how he thinks China needs to stimulate to engineer a “beautiful deleveraging”. Hopefully Xi is listening!
Are We Living Through End Times? On the Honestly with Bari Weiss podcast
Since we’re on the topic of declining empires, here’s an interview of Peter Turchin, who arrived at similar conclusions but using different methods. I love his concept of “over-production of elites”, which is when a society produces too many rich people who are all trying to compete for limited positions of power and influence.
The title is pretty self-explanatory. I love Rob Henderson’s blog as he has so many insights on social dynamics that you just can’t find anywhere else.
In an Age of Ubiquitous AI, What Does It Mean to Be Human? - by Lee Simmons
Here’s a juicy quote from this article, in case you happened to skip over the last link: “In a world of ubiquitous and capable AI, interpersonal skills will likely be increasingly sought after by employers.”
The Best Decision-Making Is Emotional - by Jonny Miller
The key is not to remove emotions from decision-making. It’s to get better at listening to your emotions and use them as an input into your decisions.
Humans will trade pain for useless information - by Phie Jacobs
A scientific explanation for why markets sell off on uncertainty and rise why uncertainty is removed.
Kevin Kelly - Be Generous and Unique, on the Invest Like the Best podcast
So many great gems in this episode about investing, business, and life in general.