What caught my eye this week.
There’s something weird about 2023 – which is that nothing bonkers has happened. (Yet?)
I mean just compare the past nine months to last year’s UK mini-Budget mania or Russia invading Ukraine. The pandemic years before that of course. And before that, Donald Trump becoming the US president, or the witless, self-harming, and implausible [1] Brexit.
I suppose we have had the AI frenzy. Which has very possibly put us on course for our ultimate extinction as a species. And even until then, a browser tab on your desktop can now write better than you on almost any subject you can think of, which is pretty crazy. Albeit the output is full of lies.
Then again, so were the Brexit and Trump episodes and that didn’t stop the craziness.
Come on Elon Musk! Cage fight [2] Mark Zuckerberg!
You guys with your pussy-footing are making 2023 feel inadequate.
Four seasons in one day
Most of us don’t remember things being this perma-bonkers in the past.
On the other hand maybe we’re just more aware of the craziness – with newsfeeds and TikTok and viral memes and flashmobs endlessly pumping it all to the surface like an angsty volcano.
But renowned financial writer Felix Salmon argues this is the ‘new not normal’.
In one of five insights from his new book shared by the Next Big Idea Club [3] this week, Salmon writes:
You might think that everything is weirder and more unexpected than it used to be, and you are right. It turns out that with hindsight, there was this very unusual period of calm for about 70 years, from roughly 1945 to 2015. Then 2016 happened, with the election of Trump and the Brexit vote in the UK, there was a rise of unpredictable politicians and movements around the world. After that, COVID hit in 2020. At this point, all of the big post-war structures that were keeping volatility down and making things more predictable had pretty much evaporated. We are now back to what you could think of as “normal” in the 19th century, the 18th century, or even the 17th century. Life was much less predictable in those days.
For most of the 20th century, we lived in a world where someone like Warren Buffett could come along with one big idea and say, “I’m going to make a big bet on America being great, and that one big bet will always be true, and it’s going to make me the richest man in the world.” That is not a world we live in anymore. The world we live in is much more unpredictable, it has much fatter tails, much higher upsides, and lower downsides. We need to be nimbler to navigate it. We can’t just believe one thing that is always going to be true. We’re going to have to update our beliefs, and we’re going to have to get used to a level of volatility, both in terms of climate change, in terms of infectious diseases, and in terms of the economy. That is going to be pretty disconcerting.
Too right it will Felix. For me and my portfolio [4].
The book is called The Phoenix Economy [5]. Given the consistent excellence of Salmon’s output over the years, I might just pick up a copy.
Then again, maybe I’ll re-read Generation X [6] instead. Douglas Coupland’s classic ‘tales for an accelerated culture’ will surely feel sleepy by comparison, and that feels somehow reassuring these days.
Have a great weekend.
From Monevator
Duration matching bond funds to your time horizon [Members] – Monevator [7]
Benjamin Graham on bear markets – Monevator [4]
From the archive-ator: a primer on life insurance and protection – Monevator [8]
News
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UK mortgage arrears hit a seven-year high – Property Industry Eye [9]
State pension triple-lock boost will see 650,000 more pay income tax – T.I.M. [10]
Rich hit with wealth taxes around the world – Telegraph via Yahoo Finance [11]
UK chip designer ARM up 25% on IPO to $65bn valuation – Reuters [12]
FCA unveils enhanced screening checks for financial ads – Cover [13]
Interesting potted bio of ousted BP chief Bernard Looney – Yahoo Finance [14]
82% of students worry about making ends meet – Save The Student [15]
[16]
Cash payments up for first time in a decade but debit cards dominate – BBC [17]
Products and services
Investment transfer market needs a regulatory crackdown [Search result] – FT [18]
UK mortgage war ‘under way’; lender offers first sub-5% rate since June – Guardian [19]
Monzo debuts investments feature using BlackRock multi-asset funds – ETF Stream [20]
Open a SIPP with Interactive Investor and claim £100 to £3,000 in cashback. Terms apply – Interactive Investor [21]
Care home fees soar amid cost of living crisis – Which [22]
The best 0% balance transfer cards have been downgraded – This Is Money [23]
Open an account with low-cost platform InvestEngine via our link [24] and get £25 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine [24]
Can pet insurance protect you from the rising cost of vet bills? – Which [25]
Homes for sale in England for budding artists, in pictures – Guardian [26]
Comment and opinion
The never-ending ‘then’ – Of Dollars and Data [27]
Building any new homes reduces housing costs for all [Search result] – FT [28]
On second thoughts – Humble Dollar [29]
It’s time to consider TIPS [US bonds, but nice deep dive] – Morningstar [30]
Portfolio diversification: see it in action – Interactive Investor [31]
Is the state pension really ‘a Ponzi scheme’? [Search result] – FT [32]
The power of an investment journal – Rational Walk [33]
Wealth creation ideas inspired by Blue Zone habits – Validea [34]
Going for the gold – Humble Dollar [35]
Will you need permission to spend in retirement? – Morningstar [36]
Naughty corner: Active antics
Investors call ‘peak pessimism’ for beaten-up UK stocks – Reuters via MSN [37]
An update on the stock-bond correlation – Verdad [38]
Why this UK income investor sold out of Prudential – UK Dividend Stocks [39]
Where is US inflation headed now? – Cullen Roche [40]
Why network effects unravel – Flyover Stocks [41]
The real Yale model [Podcast] – Capital Allocators [42]
PM jobs at hedge funds are too toxic for most – Efinancial Careers [43]
Kindle book bargains
Quit: Knowing When To Walk Away by Annie Duke – £0.99 on Kindle [44]
How to Read Numbers by Tom Chivers – £0.99 on Kindle [45]
Freakonomics by Steven D. Levitt – £1.99 on Kindle [46]
Creativity Inc. by Ed Catmull – £0.99 on Kindle [47]
Environmental factors
Why is raw sewage pumped into UK rivers and the sea? – BBC [48]
Experts call for global moratorium on geo-engineering efforts – Guardian [49]
The sea eagles that returned to Mull – Hakai [50]
US sets new record for billion-dollar climate disasters in a single year – Guardian [51]
America’s endangered amphibians are literally roadkill – The Atlantic [52]
Robots trained to revive coral reefs via aquaculture – BBC [53]
Robot overlord roundup
Even linguistics experts can’t tell ChatGPT text from human – SciTechDaily [54]
M.B.A. students vs. ChatGPT: who comes up with more innovative ideas? – Mish Talk [55]
Start-up Databricks now valued at $43bn as AI land grab continues – Axios [56]
Off our beat
This will not always be a thing – Raptitude [57]
American universities are running low on male undergraduates – New York Times [58]
London is fighting for its future as a fashion capital [Search result] – FT [59]
You’re not supporting Ukraine hard enough until the nuclear blast hits your face – Newsweek [60]
Why eating and traveling along is such a pleasure – Guardian [61]
And finally…
“Adversity shaped me. My pain threshold became very high.”
– Elon Musk, Elon Musk [62]
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