Acquiring Land, Resource and a Captive Population
The answer to the age-old question “War, Hoo, Yeah, What it is a good for?”
Table of Contents:
What is Swift and why is it relevant to the Russia situation
What I am accumulating to 100 shares so I can sell covered calls on
Finding a craft
What I am reading
It’s inescapable news, Ukraine is under attack. Markets are reacting with added volatility to existing volatility. While those in or near those two countries have more immediate questions, a reasonable questions from the rest of the world might be: will the nukes come into play? Russia has more than any other country but not more than the western allies combined. Does the number of nukes matter? Won’t it take a handful to snuff out all life? Will the whales be OK? These are legitimate questions. A paranoid egomaniac backed into a corner might do extreme things, such as orchestrating an attack on their own country’s capital. The Russian people themselves are going through subjugation in trying to protest the war, apparently. Sad state of affairs, even if you are thousands of miles away and shorted the Russian stock market index, which is currently down some 75%. Demographics is as relevant as geopolitics because the collapsing Russian population is one of the reasons why they don’t have economic growth. Ex-soviet states like Belarus have yet to recover their population to pre-WWII levels. The reason Ukraine, another former Soviet state, has mail order brides as one of their chief exports is because the high male casualties from the prior World Wars have left them at an imbalanced population. Russia probably sees refugees from these zones as a potential solution to their dwindling stock of people. This week, headlines mentioned the Swift payment system that nations are cutting Russia out of, as a sanction.
What is Swift and why is it relevant to the Russia situation?
It is a set of codes that let banks process transactions quickly. When I make wire transfers at work, usually for debt service or large contractor fees, large funds are moving between banks, sometimes these banks are based in different countries. Currently it is used by more than 200 countries. Wires cost money (~$25 to $75) but it’s fine because the SWIFT system is not only swift but secure and I’d rather use that than accidentally Venmo a 6 figure bond payment to the wrong recipient. The Swift system is owned by the G10 countries and if they decide to exclude Russia from the system then Russian exporters (mostly oil and gas) will have to find some other way to quickly and securely receive money from the buying side. They have an existing system that can handle transfers on the domestic side so we’re mostly talking about international transfers and that is relevant if countries are still doing business with Russia (sanctions). I think this would be a superficial and temporary disruption, it might send the Rouble crashing (Russian central bank has already banned shorting the Rouble) but eventually a blockchain or new Fintech solution will come up that can work as a passable substitute for Swift. If nothing else, they can use Bitcoin. It might be yet another tailwind for our favorite crypto, especially if Russia goes full El Salvador with BTC (Vladmir Wallet for every comrade).
What I am accumulating to 100 shares so I can sell covered calls on:
There are so many tickers that look attractive right now, but alas, I am cash poor. Also am holding on to some cash because more volatility is in the cards. Most of these names are well known, just a quick note on OLO and TOST - they are both restaurant order aggregators. The success of OLO might mean the stagnance of TOST or vice versa, but at this time I like both companies and want to wheel them once things stabilize, hopefully at a higher price level than my dollar cost averaged entry points.
I learned about OLO from Richard Chu’s excellent post OLO: Building the Shopify for Restaurants.
Wrapping up the War Effect on stocks - they tend to recover once we realize, oh hey, we’re usually the winning side. See above about nukes, though.
Source: Alex the Macro Ops guy
Finding a craft:
Reading and contemplating about the work-optional life, I have to think about what I am going to concern myself with primarily when the time comes. It is fun to daydream about lazing around all day, running errands, working out, and creating a patchwork of social activities to fill out the day, but without a primary cause to unite one’s life, it drifts into indolence. Depression and weirdness are real things that happen when time constraints go away. Ponder on this John Maynard Keynes quote from his book Economic Possibilities for our Grandchildren:
“Yet there is no country and no people, I think, who can look forward to the age of leisure and of abundance without a dread”
I’ve read numerous books and articles on the topic, most of which suggest there is an inward journey to be taken that reveals what one’s purpose in life is. I’ve had no luck in that department, not for lack of effort. This week I did an exercise where I relived my childhood experiences to identify “flow” experiences, periods of complete momentary absorption - it was always playing sports of one kind or another. Playing professional sports is a ship that sailed a long time ago. Another dead end, but the search will continue.
Always stick to what makes you weird, odd, strange, different. That’s your source of power. Concentrate on something you feel a pull towards, maintain a sense of purpose. For me that means: keep making bad jokes and eating pizza three times a day and trying to make a quick buck on the stocks. It works for short term self empowerment and is an absolute disaster in the long run. I joke, and think of Salman Khan’s (of Khan Academy) quote: Always be yourself. Unless you are an asshole, in that case, don’t be yourself.
Writing feels like being back in school; I have to force myself to do it. But reading comes naturally to me. There is no resentment in me when I wake up at 5 am and get some reading done before the kids wake up. It is and has always been a most rewarding undertaking. Over the years, I’ve been able to assess if a book is going to feel like a waste of time in the end and abandon the read without completing it. It’s the only way I will ever catch up to my ever-expanding library. I read about three books a week (between the Kindle, audiobooks, and paper books) - that is 150 books per year, very roughly. One War and Peace can throw that whole calculation out of whack. Last year it was Ceasar- the Life of a Colossus that took up more than a month by itself. The year before that, it was The Age of Napoleon. To this day, the most monumental reading I’ve ever gotten through was Robert Caro’s - The Power Broker. A monster of a book, the audiobook is 60 hours or so. There was a whole phase of my life where that narrative dominated my perspective; I was lucky enough to be in NYC for a week during that time; if I try to recall anything about that trip, the narration comes on in my head. Good times.
Not for the sake of putting up numbers alone, but to gain an understanding of the scarcity of time, 150 books a year means 7500 books over the next 50 years, by which point I'd be well past 80 and senile. In the best of best-case scenarios, I will have to choose not to read certain books that appear attractive at a glance. Added to the fact that there are books I reread at least once every couple of years, and that blogs are now an integral part of the modern reader’s diet, 5000 books during the rest of my life is realistic (and a little depressing) number. This is where the matching engine of Netflix would help, books recommended to me based on what others who like what I already like seem to like. I am aware of GoodReads, it’s not that good. In a way, I am glad it’s not there because it’s more herd mentality, as if more bubble chambers are what we need. But in the very act of reading, a writer recommends other books sometimes I have to block out a month just to catch up with the books recommended in a book I was reading. Mohsin Hamid’s book Discontents and Its Civilizations, was one I wanted to cross off my list instead, I had to add 20 more works that he mentions. For now, reading is my craft; if my work obligations were to disappear, I would dedicate all my time to reading, taking notes, and then writing about them.
Here is another writer who touches upon similar themes as myself, but with more style: Neckar’s Insecurity Analysis.
A modification of a quote I came upon recently on LinkedIn: If you are overthinking, start writing. If you have nothing new to think about, start reading.
What I am reading:
The Contrarian - Max Chafkin: the book is about Peter Thiel, one of the many people who made their fortune from Paypal and then went on to do other things. This dude’s next big thing was early investing in Facebook. The book is interesting to me because, at different points, Thiel and Must were both CEOs of Paypal and benefitted the most from the Ebay takeover. The contrast is clear. While Musk is a creator, a doer, a man who came too close to bankrupting himself multiple times for his ventures, Thiel is more a hedge fund manager, interested in image and money and troublingly now, politics. He reminds me of pseudo-intellectual quack promoting self-serving concepts to a mass of disaffected youth and serves as a tool through which the modern-day conservative movement has a connection to young people. The investing takeaway for me here was: stay the f*** away from PLTR.
Empire of Pain - Patrick Radden Keefe: The story of the Sackler family, the OxyContin billionaire clan. The patriarch Arthur Sackler was a brilliant man, a doctor whose foremost genius was marketing. He would be inspirational if not for his misanthropy, which is ironic because the clan’s method of whitewashing their name seems to be philanthropy, primarily to museums and universities. When faced with pressure to stop taking Sackler money (all the way until 2018), the museums’ and universities’ response was: “the sheer volume of funds is worth the bad optics,” and of course the Sackler clan’s motto: “First, do no harm. Unles harm brings boatloads of cash.”
Lords of Easy Money - Christopher Leonard: Good outline of the Federal Reserve’s history, their chairmen, what policies they undertook, and how it affected both Wall Street and Main Street. Jerome Powell’s history with Rexnord was one of the more interesting points. Takeaway for the modern investor is: diversify yo bonds. Speaking of bonds, I’ve been asked about a class of inflaction protected bond funds from a reader, I am digging into it at the moment and am prepapring a write up soon.
As always, if you enjoyed the writing or parts of it, please share it with your friends, and subscribe to my substack. If you did not like it, keep it to yourself, or better yet, let me know how I can get better.
More I read about your writing, seems a little easier for me to understand (just a personal observation). And this new addition of "what I am reading" is very thoughtful and definitely paint a good perspective of someone! They made a documentary/show about this Sackler family, you might have seen it already, called Dopesick.
If you like to add something somewhat relevant, how you analyze a particular stock and find your takeaway and add podcasts that you do follow. Btw, you might like the podcast that I am listening lately, The Wild with Chris Morgan, love his narrative.
As always, happy that you decided to share your thoughts in writing, much appreciated.