Social media the “ultra-processed food” equivalent of media content. This analogy between food and media is useful because it helps us better understand responses to the latter. In the context of nutrition, we’re comfortable deciding to largely avoid ultra-processed food for health reasons. This is how we should think about the ultra-processed content delivered so relentlessly through our screens. To bypass these media for less processed alternatives should be seen as a move toward a self-evidently healthier relationship with information.

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How to behave online: 84 new rules. We spend more time online today than ever before. Our digital lives are inextricably intertwined with our offline ones, to the point that the mere idea of “spending time online” actually seems dated, a phrase that would get you slapped with an “OK Boomer” if that hadn’t already entered the meme dumpster. We don’t spend time online anymore. We simply are online, all the time. The problem is, we still don’t always know how to act.

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Is there a mean reversion coming? For the thirty years from 1980 to 2010, there was little difference between the performance of the stock market in the United States (11.51% annual return) vs. Europe (11.49% annual return). However, since the beginning of 2010, the total return of the MSCI Europe is 175%. During that period, the S&P 500 is up 550%. Can this outperformance last forever? Maybe. But as you might have guessed, we won’t be surprised if it doesn’t. This divergence has been driven by multiple expansion. US stocks now trade at roughly a 50% premium to Europe.

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Is the European stock market a buy here (relative to the U.S. market)? Europe makes up 25% of world GDP but just a little more than 15% of global stock market capitalization. America has roughly the same weight in GDP at 25% but makes up more than 60% of the world market cap.

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While our stocks may be worth more in America, European citizens are much healthier than Americans; physically and mentally. Anyone who doesn’t see that Europe is so much culturally richer, and healthier, than the US is missing that culture is fundamentally about communities, and the social. It’s about the work/life balance. About third spaces that encourage being around people, in a way that’s deeper than a brutal transactionalism. U.S. is about the individual, to a hyper degree. Everyone is so focused on being emancipated from everything, freed from any “outdated” obligations, that they end up in an empty loneliness.

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Wall Street seems calm. A closer look shows something more dangerous is lurking under the surface. The risk to investors is that stocks will again begin to move in the same direction, all at once — most likely because of a spark that ignites widespread selling. When that happens, some fear, the role of complex volatility trades could reverse and, rather than dampen the appearance of turbulence, exacerbate it.

Teen depression started skyrocketing in the early 2010s (mass smart phone adoption) across all demographic groups:

The most prominent difference can be found between boys and girls (smart phones have had a far more disastrous impact on girls’ mental health):

And sexual orientation:

While stocks outside the U.S. are far less expensive than U.S. stocks, within the U.S. large cap stocks (the bigger companies) are much more expensive than the small ones.

Morgan Stanley released an article this week discussing the concentration growth of the largest U.S. companies within the S&P 500:

If you zoom out and look at the rest of the world, the concentration is significantly higher in many other markets. This is of interest to me because the majority of my stock market portfolio is in stocks outside the United States. I own value funds that have little exposure to these larger (more expensive) companies that dominate their country’s market, but the concentration is worrisome because selloffs tend to drag everything down together. If the big boys fall, they can bring the smaller stocks down with them.

Throughout history happiness for most people followed a U-shaped curve. They were happy in their youth, became less happy during middle age, then became happy again in the later years of life.

Recent studies have shown this changed around 2014 – 2017 as young people have become unhappy, anxious, and depressed. The U-shaped curve has disappeared for this new generation, and people now seem to get happier as they age.

Between 1993 and 2016, despair was hump-shaped in age. The rapid rise in despair before the age of 45, and especially before the mid-20s, has fundamentally changed the lifecycle profile of despair such that the hump shape is no longer apparent.

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How to Have a Great Vacation: What Science Tells Us. Limit our choices and spend less time doing specific activities.

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Why We Get Bored of the Best Things in Life—and How to Fight It. Our minds are wired to habituate to any situation

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Dr. Pepper passes Pepsi’s second place market share for soda:

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A visual look at how much time we have left in life and what the quality of that time will be. Considering both your lifeline and healthline, along with others’ healthline and lifeline, can help you live more meaningfully by allowing you to invest your time, energy, and even money in experiences with the people most important to you.

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I remember this compulsion feeling especially strong when I was in college, a time when Instagram was at its relative peak (that is, pre-TikTok) and my self-esteem was at its relative low (that is, in a sorority at Alabama). Instagram was a platform where Cool Girl™ personal brands were meticulously confected. This meant the first half hour of any social event featured an unspoken agreement amongst attendees that we shared a mutual goal: Obtain flattering photographic evidence we were there. The following 15 minutes saw a shift into the second phase, in which our attentions were singularly absorbed into the blue glow of our screens as we swiped, scrutinized, cropped, and captioned, retouching and revising a memory that was still currently underway.

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The case for investing in Chinese stocks; valuations and sentiment are extremely low.

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U.S. stocks have crushed the rest of the world over the last 15 years. However, betting on the U.S. from where we are today is effectively a bet on a repeat performance from the Magnificent Seven because, when they’re excluded, there’s nothing extraordinary about US stocks these past 15 years. And an encore is unlikely.

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Value investing is working outside the United States:

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30-year U.S. treasury bonds are down 45% from their blow-off mania peak:

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U.S. stock buybacks are back. Analysts at Goldman Sachs project that total S&P 500 repurchases will reach $925 billion this year and $1.075 trillion in 2025, which would mark annual growth rates of 13% and 16%, respectively. 

The top 20 PINs (out of 10k) constitute 27% of all PIN numbers.

Birth years are common… you can see the 2000s start to take off

top 20: 1234, 1111, 0000, 1212, 7777, 1004, 2000, 4444, 2222, 6969, 9999, 3333, 5555, 6666, 1122, 1313, 8888, 4321, 2001, 1010 pic.twitter.com/SbWFuWqSlT

— Sheel Mohnot (@pitdesi) May 8, 2024

As promised on the “Favorite Books” page (link above), when I come across a book on the financial markets that is a good read for this present moment in time, I will make a note of it here on the main page. I listened to one of those books this past week (it’s currently free to listen to on Spotify):

How much is a memory worth? Memories of experiences tend to increase in value over time – even if the experience doesn’t last long. Physical “Stuff” tends to last longer, but the value usually decreases over time. You can think of experiences vs. physical goods like appreciating assets vs. depreciating assets.

One piece of this equation of memories growing in value is because our ability to recall is quite poor. As time goes on, we also tend to remember the positive things more and block out the negatives.

If you share an experience, it creates a bond. When it comes to “stuff,” people don’t share, they compare.

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A phenomenal walk-through in Lyn Alden’s most recent monthly newsletter explaining why bonds yields no longer provide strong informational value on what is really happening in the economy and markets:

“It’s not the bond market of the 1980s or 1990s or even the 2000s anymore. It’s a big, bloated bond market that requires constant intervention by fiscal policymakers and monetary policymakers. There are pockets of information and pockets of opportunity here and there, but the overall market itself is not what it used to be.

Inflation manifested in recent years without the bond market anticipating it at all, and it can certainly happen again in the future. The same is true for periods of disinflation or economic deceleration. And the bond market can’t really front-run the sheer supply of Treasuries that will be coming to the market over the upcoming years; for the most part it can only respond in real time from the flows.”

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Over the last 30 years, the number of people who report using marijuana in the past month has risen fivefold from 8 million to 42 million. More than 40 percent of marijuana users consume daily or near daily.

Just 2 percent of 12-17 year-old marijuana users consume daily or near daily. It is becoming something of an old person’s drug. As a group, 35-49-year-olds consume more than 26-34-year-olds, who account for a larger share of the market than 18-25-year-olds.

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A quick walk through of how nuclear war would play out should remind us that we worry about the small stuff in life way too much. Too many investors don’t understand that their most precious asset is time and continue to waste it worrying about issues beyond their control.

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There is near-universal agreement on the AI market’s revolutionary potential, a historic consensus that explains the upward trajectory of AI stocks. In sum, everyone is barking up the same tree … which makes us stupid. It also inspires a question: Are we in a bubble?

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How to protect your keyless car from theft. Auto technology has evolved and many newer cars use wireless key fobs and push-button starters instead of traditional metal keys. That technology makes things easier for thieves. A simple but effective way to stop auto bandits from purloining your key fob signal is to use a Faraday bag or pouch.

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Online content is disappearing.

Who makes money when we go to concerts.

How music impacts our brain making us feel different ways. During peak emotional moments in the songs identified by the listeners, dopamine is released in the nucleus accumbens, a structure deep within the older part of our human brain.

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Happiness = set-point (genetics) + life circumstances + volitional activity (things we can control). Different things have different levels of impact on happiness:

• Zero To Small Effect: age, gender, education, social class, income, having children, ethnicity, intelligence, physical attractiveness.
• Moderate Effect: number of friends, being married, religiousness, level of leisure activity, physical health, conscientiousness, extraversion, neuroticism (negative correlation), internal locus of control.
• Large Effect: gratitude, optimism, being employed, frequency of intercourse (yeah, that means what you think it means), percent of time experiencing positive affect, self-esteem.

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Kids in third and fourth grade are beginning to stop reading for fun. It’s called the “Decline by 9,” and it’s reaching a crisis point for publishers and educators. According to research by the children’s publishers Scholastic, at age 8, 57 percent of kids say they read books for fun most days; at age 9, only 35 percent do. This trend started before the pandemic, experts say, but the pandemic accelerated things.

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The world is at a startling demographic milestone. Sometime soon, the global fertility rate will drop below the point needed to keep population constant. It may have already happened. Fertility is falling almost everywhere, for women across all levels of income, education and labor-force participation. The falling birthrates come with huge implications for the way people live, how economies grow and the standings of the world’s superpowers.

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No one has the ability to predict what will happen in the financial markets. For most of its existence, the investment business was driven by information. Today, and unlike the past, most of us have access to the same information. What it means has now taken center stage. The world we live in is infinitely complex. We like to think that intelligence and effort can readily overcome the vagaries of the markets. That’s largely because we are addicted to certainty. However, the financial markets are simply too complex and too adaptive to be readily predicted.

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There is a beautiful and melancholic word I like called anemoia. It means nostalgia for a time or a place one has never known. This is a sentiment I often sense from Gen Z—especially in recent years. New technologies cheapen and undermine every basic human value. Friendship, family, love, self-worth—all have been recast and commodified by the new digital world: by constant connectivity, by apps and algorithms, by increasingly solitary platforms and video games. I watch ‘90s videos, and I have the overwhelming sense that something has been lost. Something communal, something joyous, something simple.

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There are old investors, and there are bold investors, but there aren’t many old bold investors. As with so many aspects of investing, determining the proper amount of leverage has to be a function of optimizing, not maximizing. Extreme volatility and loss surface only infrequently. And as time passes without that happening, it appears more and more likely that it’ll never happen

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SEINFELD: In the eighties, this is the tragic turn of American culture. And this was explained to me by Mario Joiner who cracked this puzzle that I could not figure out what the hell happened. That money became everything. It was not like that in the seventies. In the seventies, it’s how cool is your job? How cool is what you’re doing? If your job’s cooler than my job, you beat me.

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The Norwegian government is spearheading a significant initiative to prohibit students from having smartphones in schools. This move comes in the wake of compelling studies demonstrating the positive impact of removing these devices from students’ hands and allowing them to focus more on their learning. The results have been overwhelmingly positive; especially for young girls.

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Envy is inversely correlated with self-examination. The less you know yourself, the more you look to others to get an idea of your worth. But the more you delve into who you are, the less you seek from others, and the dissolution of envy begins.

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As debt increases it narrows the range of outcomes you can endure in life. Once you view it as narrowing what you can endure in a volatile world, you start to see it as a constraint on the asset that matters most: having options and flexibility.

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One of the most important skills of the future will be learning how to become indistractable. The root cause of human behavior is the desire to escape discomfort.  The truth is, we overuse video games, social media, and our cell phones not just for the pleasure they provide, but also because they free us from psychological discomfort. Distraction, then, is an unhealthy escape from bad feelings.

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Some ideas and techniques to help improve happiness including embracing the seasons of your life and meeting people more than halfway.

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More evidence that allowing kids to do many activities and play many sports, makes them more likely to be really great a one of them (and enjoy it a lot more). Caitlin Clark is the most recent high-profile example.

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There’s a sweet spot in most areas of life. If you already live a comfortable life, then choosing to make more money but live a worse daily life is a bad trade.

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When Raymond Dolphin became assistant principal of a middle school in Connecticut two years ago, it was clear to him that the kids were not all right. The problem was cellphones. So in December, Dolphin did something unusual: He banned them. The experiment has already generated profound and unexpected positive results.

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A few short stories on seat belts, Dunkirk, Notorious BIG, shorting housing, and astronauts.

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We’re moving from a world where people have only experienced growing housing prices, to one where they are likely to shrink. Over the last 75 years, demand for urban housing was driven by:

1. Higher population growth
2. More urbanization
3. More homes per person
4. Bigger homes

But supply ground to a halt horizontally and vertically:

1. Cities grew as much as they could horizontally and the edge of our car suburbs hit the Marchetti constant.
2. NIMBYs restricted building up, limiting supply

Now, we’re entering a world where all these trends are slowing down or reversing:

1. In demand:
   1. The population is shrinking or soon will
   2. Urbanization has reached its limits
   3. We have all the homes we need per person. That growth is stopping.6
   4. Homes keep getting bigger, but that trend is slowing every year
2. In supply:
   1. Remote work eliminates the need to live close to work, which means the entire world becomes potential housing land supply
   2. Building restrictions can’t get any tighter, and will likely be relaxed