Jack Dorsey, founder and CEO of Twitter, tweeted that hyperinflation is coming, and while I didn’t pay much attention to it, I did pay attention to this tweet:
This has been on my mind a lot lately. I’ve talked frequently about how I’ve been expanding my worldview this year, and indirectly, I’ve been going down this macro rabbit hole.
The reason we’re seeing more technologists get pulled into the world of macro is because technology isn’t its own niche any more. It touches everything, which means that people that historically were more inclined to spend their time looking at Hacker News are now reading world news. What happens in Afghanistan, China, and FOMC meetings all matters because big tech companies operate everywhere now (both geographically and by end markets). That’s why tech people are talking about inflation.
Source: Benedict Evans
Macro Matters
Personally speaking, Jack Dorsey isn’t who I listen to on macroeconomic matters. But I’m sure there are people that do. If you’re making an informed decision on who to listen to, then you’ll be able to make informed decisions. This takes time though, and that can be challenging when so much of the world is changing so rapidly.
Lindzon, who’s tweet I linked above, recently gave me a really useful framework for macro: if it’s not actionable and it’s not able to generate alpha, then it’s not worth spending your time on it.
This is a good heuristic because it forces you to focus on what matters, but I would also add that in order to be a good investor in today’s world, you need to fully understand what’s going on in the world stage.1 Part of that means paying attention and doing the work yourself, but it’s too hard to follow every concurrent story. Instead, you need to find people you can rely upon for informative views on specific topics.
I know very little about Middle Eastern geopolitics, but Peter Zeihan does. But Zeihan has an edge to his knowledge too — his insights on Australia’s blackmail of Facebook in February of this year were incomplete at best.2
Everyone has a limit to their knowledge and expertise because it’s impossible to know everything about everything. The key is finding the limits of certain people’s worldviews so you can know when to listen to them, and when to listen to others instead.
Balaji v Zeihan Update
Sam Hinkie, the former GM of the 76ers turned venture investor, talks about following digital breadcrumbs to see what people are thinking about. Over the past few months, I’ve noticed that Balaji Srinivasan has started sharing a lot more books centered on history, demography, and geopolitics — it seems he’s been going down the same rabbit hole I have. See this tweet he shared today:
I made this decision intentionally to broaden my understanding of how the world actually works. Balaji seems to have done so because of his interest and investments in crypto, which is an industry very keen on dismantling existing world structures while making new ones.
I was talking to a friend offline about my Balaji v Zeihan thesis, and they said that with all respect to Balaji, it’s not an appropriate comparison to put him in the same league as Zeihan. They’re both brilliant, but Zeihan has spent his entire career focused on understanding the global chess board, and Balaji hasn’t.
Balaji knows infinitely more about startups, and startups and technology can dramatically Change the Calculus (as we’ve seen!), which is why I pay attention to him. But you have to keep this in mind when comparing their worldviews. Expertise matters.
Speaking of expertise, Morgan Housel recently shared a great piece about what happens when experts from the old-world order fail to adopt new ideas for the current age:
The biggest risk to an evolving system is that you become bogged down by experts from a world that no longer exists. The more evolution you have, the more you should expect that expertise has a shelf life.
That’s always been the case and will always be. It’s just hard to accept because people need experts to trust and experts want to hold onto beliefs that were hard-fought to learn.
Some expertise is timeless. A few behaviors always repeat. They’re often the most important things to pay attention to.
But most things evolve, and evolve faster than people’s beliefs. It’s a tricky thing that leads to a long history of older generations whose success came from understanding the new rules of their era not recognizing that the rules may have changed again.
I’ve been thinking a lot about how this relates to Balaji v Zeihan — on one hand, someone could argue that Zeihan represents an expert from the older age, while Balaji is trying to become one himself.
But after thinking some more, I don’t think that’s right. Zeihan isn’t someone from the old-age cadre. He’s been very focused on describing the state of affairs, how it’s changing, and why change is happening. Balaji’s tech focused theses are additive here, but even though Balaji is reading more history and geopolitical content, Zeihan’s been doing this for his career, for much longer, and that matters. As Housel said above, some expertise is timeless. Many of the lessons Zeihan shares are timeless tales of geopolitical conflict rooted in geographic and demographic destinies.
To this end, I want to recognize that Balaji v Zeihan isn’t an apples to apples comparison — I will still use that name for the thesis because it’s a quick way to explain how I’m interacting with these two worldviews, but it shouldn’t be used as an equation to evaluate the abilities of either of these individuals. It’s simply a way for me to play with two different ways of looking at the world.
We're in uncharted waters right now, but “uncharted” describes the human condition. Quantitative easing used to be unimaginable, as did all the incredible technological changes we’ve seen in the past year. No one knows what will happen, the best you can do is find people you trust and listen to the various outcomes that might be possible.
That doesn’t mean you need to be an expert, but it does mean you need to understand what’s happening, because what happens in one part of the world invariably impacts the rest of the globe.
A much better source is Ben Thompson, see:
1) Australia’s News Media Bargaining Code, Breaking Down the Code, Australia’s Fake News
2) Google Makes Deal With News Corp, Facebook Blocks News in Australia, Microsoft’s Cynicism