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Hi friends, 

Happy 4th of July weekend.

We are officially into the second half of the year. I’m ready for it. 

Wishing you a happy Independence Day from one edge of the Pacific.

Today's Contents:

  • Good Reads: Sensible Investing
  • Good Reads: Trends
  • Book Review: Too Famous
  • Weekly Song: We Take Care of Our Own

Good Reads: Sensible Investing

Taking the Dotcom Crash as the Closest Analogue to Today’s Market implies another ~40% drawdown over the next ~18 months. From Value Situations. Full analysis here

Sequoia is Down Bad. Here in Newcomer. It's a critique of their practice of holding positions in several companies that IPO'd in their portfolio. If Unity and DoorDash’s share prices don’t rebound significantly, Sequoia may have missed out on more than $7 billion in returns.

Last Year, Many Were Calling Inflation “Transitory," but then inflation only got larger, longer, and more broad-based. How did so many people get the forecast wrong? Here. TL/DR:
  1. The Recovery Was Faster Than Expected; 

  2. There Was A Genuine Demand Overshoot; and, 

  3. Major Supply Disruptions Continued. 

JP Morgan's Guide to Markets Q3 2022. Here.
A couple of charts worth pulling out: The top 10 stocks in the S&P are still a significant proportion of the index, but the their earnings contribution has declined severely. 

If you were hoping for a rebound to the next S&P peak, below are the returns that it will take from today.  

E-Commerce Has Corrected Back to the Same Trajectory as Pre-COVID. Chart below was pasted to Twitter here.

Good Reads: Trends

No One Wants Brands in the Metaverse. Here in Protocol. 

What Kind of Company Do You Want to Build? Here. An honest self-assessment from the founder of Every (a publication) about his journey through startups and how venture funding, however glorified, is often not the right capital structure for a company. 

The State of Startup Compensation, H1 2022 by Carta. Lots of good data here. Key trends they highlight:
  • Remote hiring soars: In 2019, about 35% of new hires were based in a different state than the primary company headquarters. So far in 2022, that number has ballooned to 62%.
  • Geo-adjusting is the norm: The vast majority of companies (84%) take employee location into account when deciding on compensation packages.
  • Engineering is a key hire: Engineering accounts for nearly half of payroll spend in companies valued between $1 and 10 million.
  • Terminations rise: Across Carta’s platform, involuntary terminations made up 29% of departures in May 2022 (the rest were employees leaving by choice). That’s nearly double the 15% termination share recorded in August 2021.
Podcasting Is the Fastest Growing Media Category in the US (off a small base). From Scott Galloway here.

Walk Away Like a Boss. Here. A cultural reflection on the deflating crypto ecosystem and broader economic climate. TL/DR: 

There was the promise of crypto for many: Many were here, trying to make money in crypto, because they felt they had no other choice. People struggling financially; who despise their jobs; who feel the system is rigged and there is no way out. People whose country has been at war for years and want to leave, or who have left and want to help family members who stayed behind. From crypto they draw optimism for the future, the possibility that their lives could change or that they could change the lives of others. 

But now the economic reality is setting in: These are signs that the economy has muscle but its vigor is being overshadowed by the specter of inflation. All the news of rising wages notwithstanding, the average earner is actually worse off than they were a year ago.

And so is the practical reality: There is a contradiction that those who truly believe that crypto exists outside our financial system will have to contend with: (1) this latest bull run appears to have been fueled by government stimulus and easy monetary policy; and (2) banking giants BNY Mellon, Goldman Sachs, and JPMorgan Chase have all begun offering clients access to crypto products.

Dutch Farmer Are Protesting New Climate Change Policy. Here. This is just the beginning of social unrest from climate policies with severe consequences for the livelihoods of targeted populations. There will be winners and losers. The losers will not go quietly. And the winners will not make as much money as they think. 

Book Review: Too Famous

Available here.

At a dinner party last week, we were discussing the upcoming sentencing of Ghislaine Maxwell and the latest step in the Epstein Saga. I left the evening with a new long read.

Too Famous is a compilation of character studies of famous people over the last 20 years. Michael Wolff, a long time columnist at Vanity Fair and New York Magazine and mostly recently author of three books on the Trump White House, provides a fly-on-the-wall perspective from his years of reporting. Yes, he's biased. But he's honest about bias. He's a unique writer that has had a ton of access to inform his views. 

Do I recommend it to you? Yes, if the topic is of interest. It's great writing, has moments of searing insight, and an original point of view. 

The introduction shares a reflection of where media is today: "The road here is a tragic one -- for the culture at large and, as well, for so many people who take it. But it is also the ventral thorough fare: you can't understand public life without understanding the motivation for ever-increasing and eternal notoriety and the mechanisms by which it is achieve, and, as the price you pay for it."

"Almost everyone herein has been burned, often badly, by the fame they have sought."

"Everyone in this book is a creature of, or creation of, the media. They don't exist as who we see them as, and who they want to be, without the media. They are actors, sometimes succeeding but often failing in their performances in the media's eyes."

The jewel is the final chapter titled "The Last Days of Jeffrey Epstein." Here, Wolff's access in unparalleled. He has a conversation between Steve Bannon, Epstein, and a few advisors plotting how to turn around Epstein's image. In their mind, the sex scandal is a sideshow. Epstein says "But in the history of man, prostitution has either been not a criminal act or a misdemeanor -- even if it's a thousand times."

What is Jeffrey Epstein really about? Tax avoidance and sheltering wealth. He says "I am one of the people involved in the philanthropic economy, one of the largest and fastest-growing parts of the world economy." Wolff later writers "his cynical but cheerful analysis was that, in the end, in the Gulf there was no real issue other than money, making it, hiding it, protecting it, making more of it."

Notably, the chapter doesn't mention Ghislaine Maxwell. She's not important to the Jeffrey Epstein story, but she will be punished for his crimes. 

Weekly Song: We Take Care of Our Own

Music video here.

Is there anyone who puts out more authentic Americana than Bruce Springsteen? Realistic. Optimistic. Spiritual. For this fourth of July weekend, as we head off to celebrate American independence, I thought what better song than "We Take Care of Our Own."

The song has allusions to the government response (or lack thereof) to Hurricane Katrina in 2005.

It's a nice sentiment about the potential for unity, community, and shared responsibility. 

"We Take Care of Our Own" by Bruce Springsteen

From Chicago to New Orleans, from the muscle to the bone
From the shotgun shack to the Superdome
There ain't no help, the cavalry stayed home
There ain't no one hearing the bugle blowin'

We take care of our own
We take care of our own
Wherever this flag's flown


Thanks for reading, friends. Please always be in touch.

As always,

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