Home | 2020-21 | 2019-18 | 2017-16
THE INFLATION TRADE
If you have opened a newspaper at some point this year you have probably seen a headline (or 10) highlighting recent inflation trends. If you are doing any work on your home, you may have firsthand experience as well!
The question on our mind is how much of this is transitory – i.e. we didn’t run out of trees, lumber is expensive because it has been tough to reopen and scale lumber mills following the pandemic – and how much may be more permanent in nature.
Our approach has never been to “bet” on a variable like inflation as it is too easy to be wrong. Rather, we look to position portfolios such that the majority of the assets would benefit in an inflationary environment and would otherwise produce steady returns in a more status quo scenario. The analogy of ‘heads we win, tails at least we don’t lose sums up the goal!
Our Brain Typically Overlooks This Brilliant Problem-Solving Strategy
A brilliant piece on the power of removing features (subtractive solutions) instead of adding them to solve problems.
“…other reasons for this effect may be a greater likelihood that additive solutions will be appreciated or the so-called sunk-cost bias, in which people continue investing in things for which time, money or effort has already been spent.”
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Amazon’s 2020 Shareholder Letter (and 1997 Shareholder Letter)
The majority of this year’s letter was a little political for our liking. Lots of positioning of Amazon as a business that shouldn’t be regulated.
That said, Bezos did have a few very impressive thoughts as usual. We would recommend starting on page 6 if you are looking for a quick but insightful read.
We all know that distinctiveness – originality – is valuable. We are all taught to “be yourself.” What I’m really asking you to do is to embrace and be realistic about how much energy it takes to maintain that distinctiveness. The world wants you to be typical – in a thousand ways, it pulls at you. Don’t let it happen.
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The Ultimate Deliberate Practice Guide: How to Be the Best
A long--form read from Farnam Street which can serve as a replacement for ~2-3 different self-help books.
Kidding aside, deliberate practice is how we get better. It is incredibly important to improvement, and applies to business, athletics, and personal life. The unfortunate part is it is generally uncomfortable. We believe having strategies for deliberate practice is crucial to success in virtually every field.
Deliberate practice is characterized by several elements, each worth examining. It is activity designed specifically to improve performance, often with a teacher’s help; it can be repeated a lot; feedback on results is continuously available; it’s highly demanding mentally, whether the activity is purely intellectual, such as chess or business-related activities, or heavily physical, such as sports; and it isn’t much fun.
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Paving the Path to Net Zero
An excellent conversation between two vocal individuals on climate change and ESG. We periodically highlight a video like this to remind ourselves of the sheer scale of this trend.
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