Great article from Louis-Vincent Gave discussing why most investors don’t realize how far ahead China has moved ahead of the rest of the world in many industries.

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Young people are not watching sports (live). The average age for broadcast prime-time NFL viewers is 62.5. Younger people have shorter attention spans. And we know for a fact they have infinite choices in terms of how to spend their time. So there’s tons of things vying for their time. And there are ways they can engage with a sport without spending three hours watching a live event. They can follow it on social platforms. They can get highlights as they happen. They can play fantasy. They can engage with individual athletes and immerse themselves in their fashion taste or musician tastes. They can read trade rumors or draft rumors

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Marijuana use among teens is dropping. Biennial data from the Youth Risk Behavior Survey from 2011 to 2021 included 88,183 adolescents in grades 9th through 12th showed that the percentage of adolescents who reported current marijuana use dropped significantly from 23.1% in 2011 to 15.8% in 2021. Although current marijuana use declined significantly for both girls and boys over time, in 2021 girls were more likely (17.8%) to currently use marijuana than boys (13.6%). In 2011, the opposite was true, with boys (25.9%) being more likely to use marijuana than girls (20.1%).

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If you want people to respond to your emails, be brief, direct, and vulnerable.

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Do we need to throw out our black plastic spatulas? Cooking with any plastic is a dubious enterprise, because heat encourages potentially harmful plastic compounds to migrate out of the polymers and potentially into the food, black plastic is particularly crucial to avoid.

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The crypto industry accounted for almost half the money contributed by corporations to political action committees in the first half of 2024.

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American politicians are the oldest in the world. The percentage over age 60 looks very different than most other countries:

Six years ago, Kevin Kelly celebrated his 68th birthday by gifting his children 68 bits of advice he wished he had gotten when he was their age. Every birthday after that he added more bits of advice for them until he had a whole book of bits. In a few days he’ll will turn 73, so again on his birthday, he offers an additional set of 101 bits of advice he wished he had known earlier:

• Forget trying to decide what your life’s destiny is. That’s too grand. Instead, just figure out what you should do in the next 2 years.
• Interview your parents while they are still alive. Keep asking questions while you record. You’ll learn amazing things. Or hire someone to make their story into an oral history, or documentary, or book. This will be a tremendous gift to them and to your family. 
• Asking “what-if?” about your past is a waste of time; asking “what-if?” about your future is tremendously productive.
• When you are stuck or overwhelmed, focus on the smallest possible thing that moves your project forward.
• Discover people whom you love doing “nothing” with, and do nothing with them on a regular basis. The longer you can maintain those relationships, the longer you will live.
• Write your own obituary, the one you’d like to have, and then everyday work towards making it true.
• The highest form of wealth is deciding you have enough.
• Very small things accumulate until they define your larger life. Carefully choose your everyday things.
• Humility is mostly about being very honest about how much you owe to luck.

Spotify is paying hundreds of millions on an annualized basis to audiobook publishers, according to internal figures obtained by Axios. The company has also doubled the number of titles available to premium members in the past few months from 150,000 to 300,000. The figures, confirmed by a Spotify spokesperson, suggest Spotify’s entry into the audiobook market is helping to significantly grow the pie for audiobook publishers at large. Without Spotify, the audiobook industry in the U.S. grew 14% in unit sales between Q4 2022 and Q4 2023, according to Bookstat. With Spotify, it grew 28%.

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Research suggests that unearned income is at best inferior as a happiness multiplier and at worst a Faustian bargain. People constantly ask me what they should help their adult kids pay for, if they themselves have been lucky enough to do well in life. The dilemma they have is that they’re proud of having earned their way and feel that their self-reliance, not a handout, is the gift they want to pass on; yet they also feel that it’s stingy to hold out on their nearest and dearest, rather than share their good fortune. Here’s a rule of thumb to help resolve that dilemma: If you can afford to help your adult kids, pay for investment, not consumption. In practice, that means: Education? Absolutely. Vacation? No way. Staking a business? Yes, if it seems a viable proposition (as opposed to mere whim or lifestyle choice). Wine cellar? Don’t be ridiculous. A down payment on a house? Judgment call. In this way, you are giving generously—to help them earn their own success.

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If it feels like the S&P 500 has always outperformed everything else in the world (and always will), you only need to go back to the 2000 – 2009 decade to see that cycles always change:

How expensive stocks are when you buy them (price to earnings ratio) has a direct correlation to the future returns.

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It’s so common for people’s memories about a time to become disconnected from how they actually felt at the time. When thinking about our own lives, we don’t remember how we actually felt in the past; We remember how we think we should have felt, given what we know today. “You should have been happy and calm, given where things ended up,” you say to your past self. But your past self had no idea where things would end up. Uncertainty dictates nearly everything in the current moment, but looking back we pretend it never existed. Understanding why economic nostalgia is so powerful – why it’s almost impossible to remember how uncertain things were in the past when you know how the story ends – helps explain what I think is the most important lesson in economic history, that’s true for most people most of the time: “The past wasn’t as good as you remember. The present isn’t as bad as you think. The future will be better than you anticipate.”

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Success has become overplaybooked. math competitions take naturally very smart kids and focus them entirely on training for specific math tests. The game selects for people who are smart enough and can train the most and learn the best. In the process, it kills polymaths. The problem isn’t that kids are competing or studying hard, but that they’re narrowing. One of the reasons kids can’t (or won’t) read full books any more might be that books contain a lot of superfluous information that won’t be on the test. There’s no testing skill that can be related to … Can you sit down and read Tolstoy?, so teachers don’t make kids sit down and read Tolstoy. Or anything long and challenging. The problem isn’t that they don’t know Tolstoy, specifically, but that they might be missing out on the one book that ignites something in them that makes them want to learn.

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College students now seem bewildered by the thought of finishing multiple books a semester. Teachers have noticed this problem everywhere. Many students no longer arrive at college—even at highly selective, elite colleges—prepared to read books. Lit Hum often requires students to read a book, sometimes a very long and dense one, in just a week or two. Students tell their college professors that, at their public high school, they have never been required to read an entire book. They have been assigned excerpts, poetry, and news articles, but not a single book cover to cover. The anecdote helped explain the change teachers were seeing in their students: It’s not that they don’t want to do the reading. It’s that they don’t know how.

The percentage of Americans with obesity fell for the first time in 45 years. The Ozempic effect is here:

Overdoses have hopefully peaked as well:

A higher price to earnings ratio means a country’s stock market is more expensive. A lower number is less expensive. It’s the price you are paying for the earnings of the companies.

Average of Foreign Developed Stock Markets: 20
Average of Foreign Emerging Stock Markets: 19

United States Stock Market: 35

h/t: Meb Faber & Cambria Funds

Status leads people to assume something about us that we might otherwise have had to prove. It’s a pattern-matching mechanism that allows us to quickly filter and process information in a world defined by incomplete knowledge. We live in a time-constrained world where don’t have the capacity to evaluate everyone on merit alone, and status is our way of expediting that evaluation process. And let’s not kid ourselves, most of us care a lot about status, to the point that we’ll sacrifice money for it. In a survey of 1,500 office workers, seven out of 10 said they would forego a raise for a higher status job title.

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Probability has no memory. Just because you’ve had a streak of bad days doesn’t mean you’re due for a good one, something known as The Gambler’s Fallacy. However, in real life, many (if not most) events are not, in fact, independent occurrences. In statistical terms, they are governed by the hazard function: what’s the likelihood that something will happen in a given time interval given that it has not happened already? The hundredth railroad car on a passing train portends the caboose with greater likelihood than the third car.

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Buy this, not that: Buy term life insurance, not whole life insurance. Buy retirement accounts, not annuities. Buy individual disability insurance, not group disability insurance. Buy experiences, not stuff.

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There are only 4,300 US stocks, down from 7,300 in 1996. Meanwhile, the number of private companies backed by private equity has ballooned to 11,200 from 1,900 during the past two decades. It’s also no longer necessary for many companies. Private equity is awash with cash, making it easier for businesses to raise capital from private sources. So, why go public? It’s time to consider the real possibility that the stock market has become a dumping ground for businesses too weak to attract capital in private markets.

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The market doesn’t care who is President:

The ultimate success metric is whether you get what you want out of life. But that’s harder than it sounds because it’s easy to try to copy someone who wants something you don’t. It’s possible to be humble and learn from other people while also recognizing that the best strategy for you is the one closest aligned with your unique personality and skills.

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Some thought-provoking examples of our perception of time and why slowing some things down is not only important but may actually make them better. If you give an engineer a train ride and say, “make it better,” they will look for options on how to make the trip shorter, a faster commute. If you give a train ride to Disney, they will say “how can we make this train ride more enjoyable and fun for the passengers?”

The speedometer below shows how many minutes it takes to arrive somewhere based on your speed. You can see that at the beginning, the value of going faster is enormous. As you hit about 65 miles per hour, the value falls off a cliff while the danger of increasing your speed rises exponentially.

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In the digital thunderdome of LinkedIn hustlers, Twitter thread bros, and Instagram “success stories,” there’s a piece of advice I continue to see shared, repackaged in various forms but always carrying the same core message: surround yourself with the most ambitious and successful people you can find.

But following this advice there’s a risk that goes unspoken, especially for people susceptible to gurus in the first place. It’s the danger of losing yourself. In a desperate bid to absorb ambition and catch the same waves as high achievers, you risk becoming a satellite: a small, rotating body constantly reflecting the light of someone else’s star, but never finding the space to let your own light shine. The cult of personality in our world is real, and many are essentially just part of a kind of self-worth Ponzi scheme.

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This poll reads like a group of people that have been on drugs for a long time, know they’re awful, but cannot stop using them:

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People are biased towards solving problems through addition rather than subtraction. The reason? Because adding something makes you feel like you are advancing, while taking something away makes you feel like you are retreating. We see this dynamic across all parts of the economy, and society at large. the case can be made that we live in an era of too much. Too much information, too much stuff, too many choices, and too many distractions. As a result, there is a good chance that the path to happier lives and investment portfolios performance, might start by taking things away.

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Should Europeans put 72% of their portfolios into 1 foreign country? Obviously, the same question should be asked of Americans, even though they live in that country. As of September 2024, the U.S. represents 72% of the MSCI World Index. Many passive investors simply buy into this widely adopted benchmark, but is that a prudent approach?

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A writer that knows he will soon die looks back on the things he is grateful for.

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A look at why work sucks for most people right now, why A.I. will soon take away most of those jobs, and why it could ultimately be a good thing for the world.

1. The primary reason we’re seeing all this disruption in the job market is because we’ve been part of a mass delusion about the very nature of work.
2. We told ourselves that millions of corporate workforce jobs—that pay good salaries, have good benefits, and allow you to save for retirement—were somehow a natural feature of the universe.
3. In fact, that entire paradigm was just a temporary feature of our civilization, caused by builders and creators not being able to do the work required by themselves. And that’s going away.
4. But it’s ok.
5. Most of the jobs sucked anyway, and they took up most of the daily waking hours we were supposed to be spending with family and friends.
6. Plus even if this transition happens really fast, it still won’t be overnight. Big things take a while.
7. And most importantly—what waits for us on the other side is a better way to live. A more human way to live—where we identify as individuals rather than corporate workers and exchange value and meaning as part of a new human-centered economy.

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“A single death is a tragedy. A million deaths are a statistic.” The reason that tragedies stick with us is because every tragedy represents a story, and stories resonate with us. Stories are undervalued in our world today. As the speed of information continues to accelerate, we rush to “get to the point. We want to lead with numbers, exchange prose for bulleted lists, and replace nuance with formulas. But people aren’t algorithms. We are irrational, emotional, imperfect creatures, and stories are the best medium we have for communicating ideas across our irrationalities, emotions, and imperfections.

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Before we conclude that manifestation (the law of attraction) is a waste of time, or worse, we should note that the studies above tend to look only at manifestation in which a person envisions just an outcome they want. But a person can also envision the process of working toward improvement—and this turns out to have scientifically measurable and different effects. If you believe happiness is not under your control, you generally won’t do the work to get happier; if you believe happiness comes from your personal choices and behaviors, you will probably make an effort to improve your well-being. In other words, manifesting happiness as a destination to which you might gain access is futile, but understanding happiness as a direction based on your habits can work wonders.

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Great newsletter from Lyn Alden walking through the reasons why we will continue to have enormous structural government deficits moving forward and the implications on the global economy and financial assets.

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Ten small actions to improving life today.

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Nobody knows whether stocks will be up or down tomorrow. Occasionally some newsworthy development is the clear driver of stock market movement, but usually daily market watchers are studying randomness, putting themselves at risk of missing the forest through the trees.  Price movement always comes before the narrative. Reality is much more complex.

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OnlyFans now generates $6.3 billion in annual gross revenues, up from $300 million five years earlier. A reason for OnlyFans success is its high revenue share rate (with its content creators) – 80% – which far exceeds that which a creator might get as a performer working for a production company or other agency. OnlyFans creators collected $5.3 billion in 2023, a 19% increase year-over-year. Many OnlyFans creators now treat sites such as Reddit, Imgur, Instagram, TikTok, and Twitter as “front doors” for OnlyFans customer acquisition. OnlyFans has paid its two owners $1.1 billion in dividends since 2019, with $472 million paid in 2023 alone.

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While NBA team valuations have soared, revenues have not kept pace–and in the case of at least one of those teams, its EBITDA actually went backwards during the prior tenure. The bulk of the value created in recent years has come as the result of revenue multiple expansion. NBA teams no longer trade at 5-7x revenue, like they did a decade ago. They’re now commanding 10-14x the top line. That may make it increasingly difficult for smart money to justify buying/buying into clubs in the years ahead, at least if they’re underwriting the investment solely on the expectation of growing revenues.

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It’s incredible how few people have air conditioning outside the United States. Only 10% of Europeans have it!

Driving a heavy car makes it much less likely that you will die in an accident, but much more likely the person in the other car will die.

The flow state: the science of the elusive creative mindset that can improve your life. Scientists have long known the mental and creative benefits of the flow state, in which total absorption in an activity banishes anxiety. But what causes it, and how can we achieve it?

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Workers in their 20s and 30s are borrowing years of freedom from their future selves to enjoy some of their retirement while they are still young. Pausing your career during prime working years can slow the growth of a nest egg. But the chance to backpack the globe or take a series of mini-retirements is worth it, say those who have done it, even if it means delaying buying a home or having to work longer later to fund retirement.

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The total amount of credit card debt, one of the scary graphs that floats around the internet, is less important than the amount of credit card debt that is 90 days delinquent (when using data to make a prediction on what will happen in the economy or markets).

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Teen vaping has hit a 10-year low. In an annual survey conducted from January through May in schools across the nation, fewer than 8 percent of high school students reported using e-cigarettes in the past month, the lowest level in a decade. That’s far lower than the apex, in 2019, when more than 27 percent of high school students who took the survey reported that they vaped.

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The dating apps are under a lot of pressure. Falling revenues, people not wanting to pay, and Gen Z seemingly uninterested have led to collapsing stocks and circling activist investors. Their only path forward is monetization – but what does that mean for the demographic crisis?

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Rolling Stone’s list of the 100 best TV episodes of all time: “inside every great show is a 22-to-60-minute story that stays with you forever.”

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American homes have been going up in price since early 2012. That’s part of the reason why it’s been American’s favorite investment for 12 year running. The other reason is leverage. If you put down 20% (or less) and the home price goes up 20%, you’ve made 100% on your investment. Of course, most American’s have done much better than that since 2020.

Based on the way we are wired as humans; our memories are constantly changing over time. Remembering is dominated by the perspective we have in the current moment. We have an ‘experiencing self’ and a ‘remembering self.’ Your experiences of things are continuous in real time and associated with all sorts of feelings and thoughts and sensations. And then in the cold light of reason you have this remembering self in a completely different context, trying to make sense of yourself, a person with a very narrow window of experience. 

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Reflecting on life lessons learned from someone turning 60 including distractions, ego, legacies, thoughts and hanging out with people you like.

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A look at why young adults are the ones most in crisis with mental health. A recent study found that 36 percent of participants ages 18 to 25 reported experiencing anxiety and 29 percent reported experiencing depression—about double the proportion of 14-to-17-year-olds on each measure. Older adults, often depicted in popular culture and news commentary as isolated and unhappy report the lowest levels of anxiety and depression.

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Every generation will complain that the youth are getting soft, while the young people will complain that the previous generation had it easy. Same as it ever was.

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How to negotiate with real estate agents today.

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The following graphs show the dividend yields for the S&P 500, MSCI World (all developed stock markets including the U.S.), MSCI EM (emerging markets) and MSCI EAFE (developed markets excluding the U.S.).

Here is the MSCI EAFE forward P/E ratio (stock prices relative to their projected earnings over the next 12 months). The higher the number, the more expensive the market. The S&P 500 is currently at 23. It would be close to being off the chart it is so expensive relative to the rest of the developed world.

They identified 8,577 who were in the study from the early 1990s until 2017 and who met a variety of other criteria for inclusion. This gave them 25 years of follow up, long enough to ask the question: how does participation in sports affect life expectancy? The results? Playing tennis was the clear winner: extending one’s life expectancy by 9.7 years. The other sports all provided benefits too:

• Tennis: 9.7 years gain in life expectancy
• Badminton: 6.2 years
• Soccer: 4.7 years
• Cycling: 3.7 years
• Swimming: 3.4 years
• Jogging: 3.2 years
• Calisthenics: 3.1 years
• Health club activities: 1.5 years

One possible reason for tennis, badminton, and soccer doing so well is that out of the 8 sports studied, these are the ones that require 2 or more people and involve social interaction. As the authors explain, “Belonging to a group that meets regularly promotes a sense of support, trust, and commonality, which has been shown to contribute to a sense of well-being and improved long-term health.”

Or it might be that the type of exercise you get in tennis – short bursts of activity rather than slow, steady plodding exercise – might be better for you. The authors noted that “short repeated intervals of higher intensity exercise appear to be superior to continuous moderate intensity physical activity for improving health outcomes.”

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Here’s the interesting thing about loneliness: it’s a subjective feeling. One person can be alone and feel entirely content. Another can be surrounded by friends and feel very lonely. How lonely we feel depends not only on the objective state of our social life but on how we think our social life should be. Unmet expectations that arise between the two can lead to feelings of loneliness.

Constantly being presented with the idea that their friendships should mirror the deep, intimate, dyadic friendships of women alters men’s expectations in a potentially unhelpful way. Guys see memes about how it’s dysfunctional to spend hours with their buddies without discussing personal issues, or read a reddit post about how sad it is that men don’t have friends they can completely open up to, or listen to a podcast about how they need to be vulnerable with other men if they want to be happy and healthy, and start wondering if their social life is subpar and they’re missing out. “Man, maybe I don’t have good friends after all.”

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Results show that from 2003 to 2022, average time spent at home among American adults has risen by one hour and 39 minutes in a typical day. Time at home has risen for every subset of the population and for virtually all activities. Preliminary analysis indicates that time at home is associated with lower levels of happiness and less meaning, suggesting the need for enhanced empirical attention to this major shift in the setting of American life.

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The typical age gap between husbands and wives in the United States has narrowed over the past 20 years, continuing a 20th-century trend. On average, husbands and wives were 2.2 years apart in age in 2022, according to a new Pew Research Center analysis of U.S. Census Bureau data. This is down from 2.4 years in 2000 and 4.9 years in 1880.

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Every forecast takes a number from today and multiplies it by a story about tomorrow. Investment valuations, economic outlooks, political forecasts – they all follow that formula. Something we know multiplied by a story we like.

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Irving Fisher has one of the most famous quotes in financial history (for being very wrong at the worst possible time), but his full story is even more tragic. Another great lesson on the danger of leverage and overconfidence.

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Why you don’t need to separate your clothes anymore. There’s no actual threat to your clothes or machines by washing everything together—the life of your clothes may be shortened slightly, but that’s all. Since most of the clothes we wear are now a byproduct of fast fashion, there’s less investment into each piece, and they’re not really built for the long haul the way clothes once were, anyways. Also, the natural fibers and dyes that used to be mainstream have been long replaced by synthetic fibers and better dye processes, which result in much more colorfast garments. These garments also generally stand up to wash processes better. Advancements in detergents also focused on using less of it, stopping colors from fading, keeping whites bright, and washing everything in cold water to save on energy. As a result, laundry in general is a much gentler on clothes.

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Prices going up feel safe because price increases 1) confirm that we’re right and 2) signal that we’re making money. Prices going down feel dangerous because when you hold a stock that’s declining, you lose money. But cheaper stocks are (at least from a valuation perspective) safer than expensive stocks. Much of the risk is priced in. It’s already happened.

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Great podcast this week with Louis-Vincent Gave on financial markets and the global economy from the perspective of someone outside the United States.

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