Economic growth in a post-carbon era

One of the arguments you see tossed around the energy transition debate is that any sort of forced slowdown in the extraction of fossil fuels would result in a slowdown of economic growth, which would in turn have catastrophic effects across the economy. “The Next Economy,” the latest essay from Nafeez Ahmed, offers a great rejoinder to that argument, and explores how an economy shifting to renewables will actually do just the opposite: it will likely yield exponential growth opportunities across a variety of industries, and actually augment—not limit—economic growth.  “What if we were able to create a form of economic prosperity that was not inherently tied to a dangerous expansion of our ecological footprint on the planet?” he writes. “What would this look like?”

“Technology disruptions at the production sector level, in other words, change the rules that define an entire system of production at the sector level. And depending how they play out, they can lead to and drive changes across other sectors, and whole societies. Most importantly, these are not slow, incremental changes. Disruptions happen rapidly, driven by exponential performance improvements and cost reductions that make the new technologies economically superior, out-competing incumbents.”


Thinking about complexity and adaptive systems in the stock market 

The book Complexity by M. Mitchell Waldrop is one of those titles that’s been sitting on my reading list collecting dust (metaphorically, at least) for the last year or so, but after reading this smart essay/review about the book by Cedric Chin this week, I’ve finally taken the plunge and bought a copy. The stock market is probably one of the best examples of a complex, adaptive system—an ever-mutating blob in constant flux, shaped by millions of inputs at a global scale. It stands to reason, then, that attempting to make optimal decisions in a chaotic system like the stock market requires a framework to optimize investment outcomes. Okay, but how? Cedric’s essay offers a few helpful heuristics to frame the subject. “Here is one worldview implied by a complex adaptive system,” he writes. “You cannot predict what will happen in the future. History is like traffic: even tiny events might snowball into world wars. This is perhaps blandly obvious to you, as it might be to anyone who has read their fair share of history.”

“If you are a business investor or an operator, you might not be so interested in the various contributions that Complexity Science has made across the varied fields it touches. Instead, you are more likely to be like me — interested in better models of reality, so that you may make better decisions. And what I’ve found — buried inside Waldrop’s Complexity — is that the idea of a complex adaptive system is in itself useful, and it is what has haunted me for the past year.”


Chatting Tesla and Spotify 

Andrew Walker, the PM of Rangeley Capital, had me on his podcast this week (with transcript) for an open-ended, hour-long conversation about investing, and in particular our views on Tesla and Spotify. 

“Two people can look at the same bit of information, the same data, and walk away with two totally different perspectives. I think that I just love messy situations like this… We’re drawn to this complexity because this is all a big puzzle, and we’re just trying to put together the pieces.”

A few more links I enjoyed: 

“While this feels like a new development, there is ample precedent. A.W. Jones launched the first modern hedge fund after writing an assignment for Fortune in which he profiled market forecasters and concluded that one could invest both long and short by betting on both fundamentals and investor sentiment. As Sebastian Mallaby wrote in More Money Than God, Jones’s efforts make a good living in journalism didn’t pan out. His plan B? He raised money from friends and family to use his insights and started a hedge fund.”
“Over the last quarter of a century, William Green has interviewed many of the world’s best investors, exploring in depth the question of what qualities and insights enable them to achieve enduring success. He’s written extensively about investing for many publications and has been interviewed about the greatest investors for magazines, newspapers, podcasts, radio, and television. He has also given many talks about the lessons we can learn from the most successful investors, not only about how to invest but about how to improve our thinking. He’s written for many of the world’s leading publications. He’s reported from practically everywhere in the world. He has interviewed presidents and prime ministers, inventors, criminals, prize-winning authors, the CEOs of some of the world’s largest companies, and countless billionaires.”
“Eric Golden is a former Portfolio Manager at Fidelity. We cover the Bored Ape Yacht Club in detail, use Bored Apes as a lens to understand how NFT projects are creating strong membership communities, and explore the tools projects are using to differentiate themselves.”

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