View this email in your browser 
Subscribe Here.  


Hi friends, 

Welcome to April and Q2. We have evening sunlight and signs of spring, and I'm here for that!  

I've made it home at last after many days of making new friends, meeting Zoom friends in-person, and reconnecting with old friends. However, all that social time might prove to be a warm-up act for the ASU-GSV Summit starting on Monday. It's the largest conference of Education Technology investors and entrepreneurs in the world. And, yes, I'll be there.

And, if you will too (as I suspect is true for at least 200 people receiving this newsletter), I'll see you soon!  

Today's Contents:

  • Macroeconomics: Yield Curve Inversion
  • Good Reads: Emerging Trends
  • Good Reads: Sensible Investing
  • Weekly Song: Make It A Good One

Macroeconomics: Yield Curve


The yield curve inverted on Friday as the 10-year U.S. Treasury bond ended the day at 2.38%, 6 basis points below the 2-year U.S. Treasury yield of 2.44%.

Should we care about the inversion of the Yield Curve?

This article explains the dynamics. In short, investors believe that they should receive a higher interest rate for longer-dated debt because there less certainty about the future the farther out you go (logical). Thus, 2-year interest rates should be less than 5-year rates, which in turn should be less than 30-year rates (especially given our low rate environment relative to long-run averages).  An inversion happens when yield is higher on short-term than long-term debt, which (as you can see below) is what happen on Friday. 

Are we entering a recession?

The inversion of the yield curve is often seen as a leading indicator of a recession. Is that true in this case? As always, nobody knows but the probability that it is probably went up. A friend from a big bank said they now put the risk at 25%. 

The Fed released an article on March 25th that presents statistical evidence indicating that 'the market commentary predicting a recession is probably spurious'. But, first, that might be self-serving for them. And, second, often economists armed with empirical evidence of the past miss the political economy elements of today. Things like underestimating the reality that the more the market believes that there will be a recession makes the recession self-fulfilling (although I will note they do address this in the article). 

What do I think?

I'd strap in and expect volatility as uncertainty rises along with interest rates. With uncertainty comes opportunity and the separation between strong and weak investors and business. That is what I find exciting when looking ahead to the coming quarters. 

Good Reads: Emerging Trends


Principles for Dealing with the Changing World Order a video here by Ray Dalio (43 minutes but worth it). In short, the US isn't in good shape. 

Transition to web3 for Non-Technical Roles. Guide book here

The New Creator Economy: A guide on web3 creator platforms. Here from Antler. 

Drinking 2-3 Cups of Coffee a Day was Associated with the Greatest Heart Benefits. Here. When I shared the study about daily drinking changing your brain, it was the most clicked link. Well, now I'm here to share good news: your coffee habit might be beneficial! Store that one away.  

But...Microplastics. Microplastic pollution has been detected in human blood for the first time, with scientists finding the tiny particles in almost 80% of the people tested. Here.

Good Reads: Sensible Investing


Started From The Bottom - From Nobody to Unicorn in 3 Years. The story of Dune Analytics here. I've seen this exact story play out many times. Company goes from complete dud (from VC interest POV) to a super-hot deal. The reasons for this are surprisingly and completely logical. 

Pershing Square Holdings (Bill Ackman) - Annual Report 2021 here.  The discussion around their exit from fundraising is an interesting one:

The business of raising capital is one which requires time-consuming support from all aspects of the firm. Our decision to exit the private fund capital raising business allowed us to operate extremely effectively with a much smaller team. In a small organization, our other-than-investing managerial responsibilities are much more limited. A smaller Pershing Square is both an extremely effective and attractive place to work, making it easier for us to retain talent, minimize turnover, and execute a turnaround.

Capital is generally, but not always, a commodity. Our differentiated capital base and growing reputational equity enabled us to win an investment mandate where price was an important but secondary consideration. With our increasing scale, large insider investment, and stable capital base, we believe that we will continue to identify other negotiated transactions where these unique attributes give us important competitive advantages.

And, given all the macro risks, why do they stay invested? Here is the answer:

Why then, you might ask, do we remain fully invested? For two principal reasons: first, we believe that the businesses we own have substantial pricing power that will enable them to cover the costs of inflation and are otherwise sufficiently robust and durable to continue to grow and withstand the test of time; and second, we believe that our hedges will likely generate substantial liquidity that would enable us to take advantage of opportunities in the event of a substantial market decline. We believe that hedging is a better alternative to keeping funds in cash while one is waiting for opportunities, particularly because high rates of inflation cause the purchasing power of cash to decline rapidly

ESG's Russia Test: Trial by Fire or Crash and Burn?  Here. Aswath Damodaran writes in detail about the meaninglessness of ESG investing.

The Crypto Guide to Taxes. Here from Coinbase. In short, what a mess: (1) converting crypto, like swapping BTC for ETH, is taxable; and (2) buying an NFT with crypto is a taxable event. 

What Happens Next in Tech? Me and Richard Lander from CityWire discuss here. I met Richard through this newsletter and got to record with him live in the studio in London. Thank you for a delightful conversation, Richard!

Weekly Song: Make It A Good One

Music Video here

One of my new friends from my travels suggested this song for the newsletter, and it's a perfect. It's a reminder of the simple yet powerful advice to make life a good one and that you don't need massive amounts of money to do it. 

Hope all of you Make It A Good One, too. 

Make It A Good One by Brothers Osborne
Raise your hand
Let the chips fall where they land
Take a chance and get a little wild while you can
And if you wanna make the good Lord laugh
Tell 'em your plans

Make it a good one
If you're gonna pour one, make it a strong one
Give all your heart to someone
Leave nothing unsaid or undone
Life goes by ninety miles a minute
If you blink once, you might just miss it
It's a hold on tight, carnival ride around the sun
It's a freefall, havin' a ball 'cause you only get one
Make it a good one


Go Duke!


I have some basketball to watch. Thanks for reading, friends. Please always be in touch.

As always,

Was this forwarded to you? Subscribe
Declarative Statements Home Page
Declarative Statements
Katelyn Donnelly
Copyright © 2022 Declarative Statements, All rights reserved.