Walt Disney

Walt Disney’s Paper Route And The Spread Of Ideas

Here’s your latest Friday Macro Musings.

As always, if you come across something cool during the week, shoot us an email at alex@macro-ops.com and I’ll share it with the group.

Q3 hedge fund letters, conference, scoops etc

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Latest Articles/Videos —

Powell And ‘Below Neutral’ — Review how the Fed influences the economy and what Powell meant when he said rates are just below neutral.

Evolutionary Biology — Learn why human evolution over millions of years has made it so difficult to control our emotions in the market.

Articles I’m reading —

Read this amazing section from the book Walt Disney: The Triumph of American Imagination about the daily struggle and outright drudgery of Walt’s childhood that no doubt helped shaped him into the icon he eventually became (h/t to @ivan-brussels for sharing).

Walt Disney

This reminds me of one of my favorite quotes, which is.

Per aspera ad astra is a latin phrase that was popular in ancient Rome. It essentially means, “Through struggle to the stars”.

I also enjoyed reading about Jack Dorsey’s 10-day silent vipassana meditation retreat that he embarked on for his birthday this year. (Link here)

I wouldn’t mind going to one of these retreats someday. Perhaps with some of the MO Collective crew. This practice seems to be working wonders for @jack who’s running two wildly successful billion dollar companies simultaneously.

Square’s Cash App (his other public company) has now overtaken Coinbase as the most widely used iOS app for bitcoin purchases. Cash App has also overcome YouTube’s app as the top free mobile application on the iOS store. (Link here) Jack’s winning the game right now. It looks like his mindfulness practice is working…

Lastly, Meb Faber shared his list for best podcasts of the year (link here). I’ve listened to maybe a third of them and look forward to working my way through the list.


Charts —

There is a great growth divergence right now between the US and the rest of the world. This is set to intensify over the coming quarters, at least until the second half of 19’ when the negative effects of China’s collapsing credit growth should have finished working its way through the system.

Walt Disney

And while liquidity in the US is still relatively flush, it’s beginning to tighten quite significantly in the rest of the world.

Walt Disney

The same pattern is playing out in Asian liquidity. Readings peaked at the beginning of 2018 and have made consecutive new lows all year.

Walt Disney

The dollar and metals are wound up and look ready for a run. Remember, speculative flows drive currencies and speculative flows chase growth. 2019 is looking like it may be the year of the dollar.


Potential trade I’m digging into —

We’ve mentioned Facebook (FB) here a number of times and we continue to track it waiting for a bottom to be put in. The chart is beginning to look more constructive but we think there’s likely one more leg down. The stock is insanely undervalued at these prices. Saber Capital shared a recent update on FB’s valuation case that’s worth reading if you’re interested (here’s the link).

Walt Disney

Podcast I’m listening to —

Winning at the Great Game: My Interview with Adam Robinson (Part 1) [The Knowledge Project Ep. #47]

This is a Farnam Street podcast featuring game theorist Adam Robinson. Adam is a rated chess master, co-founder of the Princeton Review, and global macro advisor to some of the largest family offices and hedge funds in the world. He’s an incredible thinker and life philosopher and whenever he comes up on the podcast circuit I try to tune in.

His conversation with Shane covers happiness, life’s big questions, subconscious thinking, investing and much more.

If you’re short on time the investing discussion starts in at [39:30] and runs until the 1 hour and 25 minute mark.

It’s a fascinating segment where Adam reveals part of his investing framework — a process that uses neither fundamental analysis nor technical analysis. Here’s a snippet of his explanation for how he approaches markets.

So, there’s a third way, and John Maynard Keynes said, “Successful investing is anticipating the anticipation of others.” And that’s fascinating, right? John Maynard Keynes, who was not just one of the great economists of all time—and by the way, the one economist Warren Buffett ever cites—he was also a great investor. So during the Depression, John Maynard Keynes ran one of the Cambridge College portfolios, and it was up three- or four fold during the Depression and World War Two. He was a great investor. And so how do we anticipate the anticipation of others? That’s very clever as a formulation, but how do we do that? And we can do that using game theory. So my approach to markets is simply this, to wait for different groups of investors to express different views of the future, and to figure out which group is right. I look for differences of opinion strongly expressed, and decide which one is right.

Book I’m reading —

In the above podcast, Adam Robinson talks about how trends are really just the spread of ideas which is really interesting if you think about it from a macro perspective. Markets trend because minority beliefs become dominant beliefs until consensus is reached. Then the world changes and the process repeats.

Adam says he learned about this concept by reading an old book written by Everett M. Rogers in 1962 called Diffusion of Innovations.

Quote I’m pondering —

Risk taking is not just a quantitative discipline, it is a philosophy of life. There are basically two sensible attitudes about risk. The first is to avoid it whenever possible, unless there is some potential payoff worth the risk. The second is to embrace risk taking opportunities that appear to offer a positive edge. The advantage of the second course is that you take enough gambles that the outcome of any one, or any ten or hundred, doesn’t matter. In the long run, you will end up near your expected income, like someone flipping a coin a million times.  ~ Aaron Brown

If you’re not already, be sure to follow me on Twitter: @MacroOps and on Stocktwits: @MacroOps. Alex posts his mindless drivel there daily.

And if you’d like to discuss macro with the rest of the Operator community, check out our Global Macro Facebook group by clicking here.

Have a great weekend.

Article by Macro Ops


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