My Posts (9-15 June, 2024)

Roger Federer's Commencement Address at Dartmouth College was very inspiring. The accounting rule on secondary PE investment is something to be aware of. Rothschild will open an office in Saudi with a loan platform was a surprise. Stock buybacks in Japan continues. And some interesting articles on the medical side.

Life

2024 Commencement Address by Roger Federer (Dartmouth College): “I believed in myself. But BELIEF in yourself has to be earned.”

The timeless aesthetic of Japanese gardens (FT): "This sense of unknowability encourages mitate, a Japanese aesthetic concept that signifies the perception of an object in a non-habitual way, a leap of the imagination. It corresponds to the Zen Buddhist philosophy that insight cannot be expressed in words but understood only through direct experience. Like a form of metaphysical poetry, mitate implies the layering of meaning and symbolism. The Ryoan-ji garden, for instance, can also be seen as a mountain landscape, similar to those captured by Japanese artists and poets throughout the centuries."

Investments

Fixed Income, Interest Rates

Inverted Treasury Curve (The Daily Shot): Nobody talks about it anymore.

The Era of Higher Savings and Bond Rates Is Still Going. Don’t Waste It (WSJ): If a large amount of the $17.5 trillion moves, banks could be in trouble.

The Investing Boom That’s Squeezing Some People Dry (WSJ): Don't get dazzled by the "expected" return... it's just a projection.

In a year of elections, European bonds still seem a safer bet than US debt (FT): I have a different view given we know the two US presidential candidates and what they might do, while we don’t know what the French election results will be and how the war in Ukrainian will turn out.

Bill Gross also prefers European bonds over US Treasuries.

Public Equity

“Inverse-VIX ETFs continue to see inflows. This is not going to end well (The Daily Shot): I agree, it will not end well. The NAV is up more than 150% in 2 years... no wonder.

Japan stock buybacks hit $57bn, speeding toward annual record (Nikkei Asia): Transfer of capital from corporations to individuals, pension funds and Bank of Japan!

Private Assets

Distressed properties in the US. (The Daily Shot): Potential distress in apartments seem high.

The Little-Known Secret to the Success of Secondaries (Institutional Investor): “The Financial Accounting Standards Board decided in a new rule that after purchasing LP interests at a discount, investors can mark them up to the NAV of the private equity fund. Those markups 'can act as an enhancement to overall return'”

The Shortcut That Allows Risky Startups to Raise Billions From Rookie Investors (WSJ): Startups are risky (never heard about a safe start up...). The natural question to ask is "why can't they go to the VC funds, the pros?"

What investors should learn from a Berlin housing saga (FT): Investors in real estate funds (including pension funds) will suffer, says Financial Times. The real solution seems to be increasing supply by relaxing regulation to construct new houses. But it will take time to change the regulation and longer for the additional supply to hit the market. Tough.

Miscellaneous

Edmond de Rothschild to open Saudi office and launch debt platform (Reuters): "Edmond de Rothschild Group, a specialist in asset management and private banking, is set to open an office in Saudi Arabia this year and launch a platform to provide debt finance for infrastructure projects there, the Swiss bank said on Thursday."

Lead fund manager in Allianz fraud case pleads guilty (FT): I think it doesn't matter who says it... a star manager, a manager with “the largest and most conservative insurance companies in the world monitoring every position that I take,” or someone with gray hair. To get returns, there will be risk.

Sustainability

Three female founders’ plans for addressing water challenges (Free Article FT): “As the emerging global water crisis gains greater public attention, more start-ups are addressing water quality and consumption in their business plans. And more of them are led by women.”

Coffee In The Congo: On The Path To Becoming The “Democratic Republic of Coffee” (Sprudge Special Projects): “The DRC, with its favorable eco-climatic and edaphic conditions, abundant hydrography, and diversified landscape, is home to some of the best coffees in the world. The eastern regions of the DRC, defined by the soaring Ruwenzori Mountains and the volcanic Virunga range, are renowned for exceptional Arabicas with their unique flavor profile frequently sampled as floral, fruity, and complex.”

'Yakult ladies' go to work for Mercari to unearth latent assets (Nikkei Asia): There is a cost to bringing these latent assets to the secondhand marketplace. You need to take a photo, describe the item, set a price, communicate with the buyer via Mercari's site or app, wrap it, bring it to a convenience store or a post office with the app to send it anonymously so that the buyer can also receive it anonymously, and finally rate the buyer... This experiment reduces most of these obstacles.

How Amazon blew Alexa’s shot to dominate AI, according to more than a dozen employees who worked on it (Fortune): Haven't heard about Alexa for a while...

Renewable Energy

IAEA mission reviews Sri Lanka siting process (World Nuclear News): Nuclear power is coming to Sri Lanka.

How battery swap networks are preventing emergency blackouts (MIT Technology Review): “According to numbers provided by the company, 590 Gogoro battery-swap locations (some of which have more than one swap station) stopped drawing electricity from the grid, lowering local demand by a total six megawatts—enough to power thousands of homes. It took 12 minutes for the grid to recover, and the battery-swap stations then resumed normal operation.”

Nice EV You Got There—Can You Afford to Insure It? (WSJ): "In the U.S., the average severity of a claim for a repairable EV was $6,066 in the first quarter, nearly 30% higher than for internal-combustion-engine (ICE) vehicles according to Mitchell, which provides software and data to auto insurers and the collision-repair industry."

Medical

Lilly’s Weight-Loss Drug Is a Huge Hit. Its CEO Wants to Replace It ASAP (WSJ):  Something doesn’t sound right.

Japan is creating access to new treatments for neglected diseases (Nikkei Asia): ”The Pediatric Praziquantel Consortium, an international partnership led by the pharmaceutical company Merck, drove the development of the new medicine, aiming to achieve the World Health Organization's goal of eliminating schistosomiasis as a public health problem by 2030.”

Send this article to people who say “Ivermectin doesn’t work for COVID-19” (Brownstone Institute): If it can be agreed to be effective in the early stages, it gives us another tool with a very low price tag. I wonder if it also works against bird flu...

Gen X has higher cancer rates than their baby boomer parents (Science News): "Per capita, Gen X (born from 1965 through 1980) is getting cancer more often than their parents’ and grandparents’ generations, researchers report June 10 in JAMA Network Open.”