Pity the Loud, Rude and Belligerent: External Behavior as the Ultimate Tell

I’m not the most political person but I’ve long been an observer of politics and geopolitics particularly. As a history enthusiast and long time international investor, you have to be aware of what’s happening at the global macro level of economics, demographics, sociographics & military changes. What I found disturbing is the recent growing belligerence of China that has happened under Xi-Jinping. The crackdown on corruption & also the wealthy, the breakup of big tech giants, aggressive “Wolf Warrior” diplomacy that has emerged in most countries by the Chinese diplomatic corp. We also see the increasing PLA military flexing across the straits of Taiwan, the Spratly Islands with Vietnam & Philippines and more antagonism with India on their border. The “peaceful rise” of China is definitely over with many so-called geopolitical experts and media luminaries commenting that this is due to Chinese ever growing power. 

Yet looking at the data, we see some really deep problems underneath. The Chinese population is shrinking (at least 20% in next decade), the economy is slowing with major real estate industry collapse & growing percentage of Non-Performing-Loans in all their banks. China has also faced major electricity shortages that have left millions in the literal dark (September 2021) and intractable environmental issues such as bad air and water quality. To understand the real situation, this growing aggression and belligerence stems from weakness, not strength. 

These aggressive internal and external projections are ones of attempting control, redirecting internal populace’s attention to outside issues and hiding their own problems. No different than when an animal postures by standing on its hind legs to look bigger and taller than their opponent. 

The point of this is not to call out China specifically but as a point relevant to people, companies and countries as a whole as well. When you run into someone who is rude or aggressive, it’s not because they are happy or their life is going well. It’s because they feel insecure or are threatened. A wounded animal strikes out against those around it. 

Happy confident people don’t feel the need to react, they tend to let things slide. 

I think back to my own life. When things are going well in general, you tend to be pretty tolerant of things. When things are not going well, you tend to operate on a hair trigger. For me personally, I’d get easily tilted. Little small things cause me to lose my temper. 

It’s the same for those who feel the need to flex or brag or even worse dunk on other people. These are sad, massively insecure people. We are all insecure to some extent and many of us got to where we are in life by using this as an internal driver. An internal driver that is used to accomplish things and prove others wrong. This is an incredible tool but you also have to learn to reign it in. And knowing, recognizing and celebrating your accomplishments are important to build this confidence. 

So going back to the title. When you are faced with a braggart, loudmouth or someone incredibly rude. Be patient, show them pity and tolerance or just ignore them. They are fighting a battle internally that they don’t understand and their behavior is the bad outcome of this. Also be careful in business of taking someone’s bragging too seriously. Quoting Tywin Lannister from Game of Thrones, “Any man who must say, 'I am the king,' is no true king.” 

Everybody Wants to be a Gangster, Till its Time to Do Gangster SH-T

Seeing this awesome t-shirt made me chuckle. Also made me think. We live in a social media & media saturated world full of posers. So much talk and so little doing. How many so-called entrepreneurs who are seen to be driving around in Lambos, living in a crazy big mansion actually own these. How many business gurus actually built something and were actually successful before they started selling courses? 

One of the biggest challenges for founders, LPs, and investors is sorting the signal from the noise. And it is really damn noisy out there. Much of this is made by LPs, Venture Capitalists, angels and founders who have figured out how to tell a good story and dominate the news cycle and social media. So many are amazing writers or great on social media or the PR front. This is also why we see so many of the best VC funds turning into Media companies. A16Z has 70 people who work on the media aspects and frankly think they do an amazing job. Lots of other funds are in the midst of attempting the same thing, albeit doing it very poorly. 

I think this is a challenge for founders especially. Which investors will really help you when the chips are down? Which ones are willing to roll up their sleeves and pitch in to do the hard work? Reality in my experience is very few (ie sub 10% for sure). 

It goes the other way too. So many founders are following the concept of “Building in Public.” They have become incredible at social media and the hype machine. This clearly helps them when it comes to fundraising, hiring and even potential partnership conversations. But how many of them are able to execute and deliver on their promise? Also pretty rare. And in the most extreme cases “Fake it till you make It” ends up turning into fraud. There is a balance to be struck here. How do you balance promoting & selling with actually delivering? Worst thing you can do is overhype and raise expectations to a level you can’t deliver on (think Matrix 2 or the awful Star Wars movie prequels). It only leads to disappointment and sometimes anger. In the consumer world, this is death for companies. 

Unfortunately, we are in the time where flash truly has become trash as we see deal cycles speed up and where due diligence is sparse. This probably is not going to change for a while and it’s the game we have right now. All I can say for both investors and founders: take the time to make sure you are partnering with the right people. 

And follow the basics: 

  1. Always manage expectations 

  2. Do exactly what you say you will do, and when you promise you will do it. 

If you do these two things, you will be a true gangster. And more importantly, you will be far ahead of 95% of people out there!

Marvin’s Best Weekly Reads Nov 21st, 2021

“Patience, Persistence, and perspiration make an unbeatable combination for success”--Napoleon Hill

  1. Good explanation for why we have the snarl in our ports. Monopolies.

"But what is going unsaid is that these bottlenecks are actually excellent news for two sets of players: the highly consolidated container shipping firms, with names like Maersk, MSC, COSCO, Evergreen, and One. There are eight dominant firms, all foreign-owned, and this year they are on pace to hit $100 billion in profit.

It is also good for terminal operators, which are the firms that lease space from ports and run the warehouses, cranes, and docks. Terminal operators are often owned by ocean carriers, who then can use their vertical integrated power to exclude competitive shipping lines, or they are owned by private equity giants like Brookfield Asset Management or Oaktree Capital’s Ports America. 

Both carriers and terminal operators are bottlenecks in the system, and they profit not just by charging normal prices, but also by imposing a variety of surcharges on anyone who needs their service. This is similar to how airlines will offer a price for a ticket, but then also charge baggage fees, ticket change fees, or administrative fees on top of that.

In 2009, for instance, roughly 50% of total freight charged came from surcharges. The ability to extract extra revenue, especially when demand is high, means that we’re not in an all-hands on deck situation, but a situation which is working quite well for some, and terribly for much of the industry and the public."

BIG by Matt Stoller
Too Big to Sail: How a Legal Revolution Clogged Our Ports
Welcome to BIG, a newsletter about the politics of monopoly. If you’d like to sign up, you can do so here. Or just read on… Today I’m writing about supply chain disruptions at the ports, and the Bill Clinton-era law that caused it. The Suez Canal and Our Big Dumb Ship Problem…
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  1. I am fascinated by DeFi movement. This is a good framework for portfolio management here. I'm still newbie but this is pretty interesting and will have to be re-read a few times as I evaluate the space a bit more. (I don't invest in anything I don't understand which is very obvious that I don't get this space as old guy). 

DeFi Education
Overview of Portfolio Construction & Risk Management - Owl and Iguana
Welcome Avatar! We have had a lot of requests around how we, the DeFi team, think about managing our portfolios and our personal risk management frameworks. As we continue this golden bull run in the world of crypto, we think now is a good time as any to describe how we approach our personal portfolios. Since we all have our own goals, risk appetite and…
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  1. "With the pandemic, geography suddenly no longer matters quite so much to either entrepreneurs or early-stage investors. Entrepreneurs can now easily access the investors who are the best fit for their venture in terms of specific expertise and value-add — and similarly, investors can now easily access entrepreneurs all around the world."

https://bussgang.medium.com/the-world-is-flatter-than-ever-59a61a663000

  1. "Everything that we do during our awaken 16 hours a day are just habits. From when we get up in the morning to how we take our coffee, how we dress, how we get to work, how we do our work, where we go for lunch, who we hangout with et cetera. These habits then define our identity. Example: If I write every day I’m a writer.

The secret to creating positive habits is to make them obvious, attractive, easy, and satisfying (read James Clear’s excellent book Atomic Habits)."

Fewer Better Things
Great Habits Are The New Superfoods
Fewer Better Things is about the process of change. It’s the journey of growth from being a mindless producer and consumer of things, people, and planet to becoming a mindful creator of what really matters to ourselves…
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  1. Absolutely LOVE this. Thank u Polina Marinova Pompliano.

Always bet on yourself: something I deeply regret and wish I had the guts to do much earlier in my life.

"I share these three stories just to remind you that yes, sometimes, you'll put it all on the line and it will spectacularly blow up in your face. And other times, it might result in the greatest success of your life.

Following the rules seems easier than inventing them, but the latter is certainly more rewarding. As Beyoncé once said, “I don’t like to gamble, but if there is one thing I’m willing to bet on, it’s myself.”

https://theprofile.substack.com/p/the-profile-the-men-who-carry-out

  1. "A final piece of advice: only take money from individuals you get along with. As they say, it’s like a marriage. 

You should lean on your investors as much as you can — not to do the work for you, but to provide differing perspectives, lived experience and strong opinions. And if you’re going to be leaning on them, they had better be people you get along with and look forward to speaking to.

While the typical investment banker-turned-VC tended to drill us on numbers (which, frankly, at the pre-seed and seed stage don’t mean all that much) and personal connections (“[insert portfolio company] got around [insert challenge] because they knew [impressive person]”), ex-operators focused more on our personalities, how we approached problems and our track record of execution."

https://sifted.eu/articles/good-bad-seed-investors/

  1. "So I’m actually quite worried about how we’re going to navigate to a hybrid environment. It’s going to get a lot more complicated. This situation where everyone has got one screen, in a sense, it’s been a great leveler. Everyone’s got a screen, everyone’s on the same playing field. Going to a world where there are three people in the room, two people on a call. It’s going to be pretty difficult trying to find that right balance. And I think it’s going to take a lot of experimentation as to what are the best communication methods.

What are the sort of clear three or four rules that you’ll have to adopt to make sure that everyone is an equal participant in the conversation? And I don’t know the answer to that yet. We’ve got a bunch of ideas. One is like one screen, one person. You know, even if you’re in the room, you have your own screen.

But I’m anxious about it because I think it’s going to be in some ways more challenging than the move to 100% remote where everyone was in the same situation."

https://time.com/6117090/tim-cadogan-gofundme-ceo-interview/

  1. Damn, this is so nutty & exemplifies the short term extremes of supply and demand capitalism in a bad way.

https://thehustle.co/why-thieves-love-to-steal-catalytic-converters/

  1. This is frigging brilliant: investing in human potential. (and I know Marina Mogilko :) This could be the future of VC.

"And as the creator economy began to evolve into a real industry in recent years, he saw his chance to put his idea into motion. Earlier this year, his venture firm, Slow Ventures, set aside $20 million to invest in creators themselves.

Now the firm has gone and done it, joining a few individual investors in spending $1.7 million in the future of Marina Mogilko, a 31-year-old YouTube personality with multiple popular channels that touch on topics like life in Silicon Valley and learning new languages. (Slow Ventures is also investing in “serial entrepreneurs” like the Liberman siblings, at least two of which are coincidentally individual investors in Mogilko.)

The decision to invest directly in humans brings about a host of legal, ethical, and moral questions that Lessin will surely need to confront head-on. The idea that someone might sign a 30-year employment contract and that society should explicitly value a human brings up questions of indentured servitude and worse—claims which Lessin sees as entirely ill-founded. (“it's def not indentured servitude,” he recently wrote in response to someone who said the legal issues seemed “daunting.”)

He believes that he is setting society on a path where we are free to invest in our favorite humans through multiple venture rounds, providing young, brilliant people with the money to fund a path to success that doesn’t exist today." 

https://www.vice.com/en/article/7kb9mg/a-former-facebook-vp-thinks-investing-in-humans-is-the-future-of-vc

  1. A16Z has been on forefront of Crypto so I always pay attention to what they say.

"I think it’s really important with NFTs not to judge the current state of innovation by the end state of innovation. I completely understand what you’re saying. I’ve seen it myself. Yet I also see [parallels], in terms of status symbols, in the physical world, where many Americans are struggling, [while] others can afford luxury vehicles and Rolexes, so I think the digital world is no different.

And like there are luxury physical goods, there are also basic goods that people want to own in the real world that aren’t ostentatious, [and] I think you’ll start to see more of those [more basic goods] developed digitally."

https://techcrunch.com/2021/11/14/vc-katie-haun-nfts/

  1. Another example of the CCP bullying and the NBA selling out to China (as well as many in US Media, politics and business). Benching Kanter. Shameful to say the least. 

https://www.taiwannews.com.tw/en/news/4345934

  1. Not sure how I feel about this. It's not an untrue story as there are literal crap ton of foreign grifters in Crypto coming to Ukraine. The foreigners profiled here are cringeworthy.

But they don't talk about the impressive growth of local grown tech ecosystem as well as many legit foreign entrepreneurs who have made the place home too. Guess it did not fit the narrative.

https://www.nytimes.com/2021/11/14/business/crypto-ukraine.html

  1. Can't wait to watch this. "Longevity Hackers"

  1. The man knows what he is talking about.

"So, in a world where we are seeing more and more $100mm valued seed rounds, one has to ask the question what are the investors expecting? A $100 billion outcome? Doubtful. Less dilution, maybe. A different power-law distribution? Don’t count on it.

I think they are being delusional, comforted by the likelihood that someone will come along and pay a higher price in the next round. But it seems that person may also be delusional. Because when you model things out, the numbers just don’t add up."

https://avc.com/2021/11/seed-rounds-at-100mm-post-money/

  1. "The US dollar will continue to be a fantastic medium of exchange. It is highly liquid, accepted by millions of businesses and individuals globally, and comes with the full faith and credit of the United States. But the dollar may not be the best store of value asset to denominate your portfolio at this time, especially when you consider approximately 40% of all dollars in circulation have been created in the last 18 months. 

My point in writing this is not to convince you to go put all of your assets in bitcoin, but rather to get you to switch your frame of reference. The assets you allocate towards have to keep up with, and ideally outperform, bitcoin. This is no easy task. The digital store of value has grown at a compound annual growth rate of 180% for the last decade."

The Pomp Letter
Your Portfolio Gains Aren't What You Think They Are
Listen now (4 min) | To investors, Financial markets have been on a tear for the last 12 months. Everything in your portfolio appears to be going up at an exciting rate. If I were to ask each of you the performance of your portfolio, you would quote me a percentage increase on a nominal basis. If I then asked you for the real rate of return, you would take the nominal number…
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  1. "The world is changing and you cannot afford to sit on the sidelines. The most valuable and asymmetric opportunities will present themselves as distortions in society’s time preferences.

Most people intuitively understand where the world is heading, but they don’t know how to align their goals with a shifting time value of money. Your ability to establish clear lifestyle goals and build a financial strategy around these goals will provide you with a competitive advantage in the digital age. With clearly defined goals and a system of time-based financial strategies, you will be well positioned to jump on opportunities.

But most importantly, this lifestyle design investment strategy will empower you to live the life you want to live.

Your peers will stick to conventional wisdom, you must use shifting time preferences as your edge."

https://dougantin.com/a-lifestyle-design-investment-strategy-for-the-digital-age/

  1. This is important. Rule of Law has definitely degraded in America so there is work to be done. But thankfully we are not at the point of no return yet.

"Rule of Law is incredible important; throughout history, societies with a strong rule of law flourished.

When laws are fair, predictable, and evenly applied, businesses can plan and prosper. People can confidently invest in the future. Economies grow and everyone wins.

Where the Rule of Law is weak and corrupt, the opposite happens. Businesses can’t plan anything because the rules are constantly changing. No one wants to invest because they feel like everything is going to be taken from them.

This is the sort of thing we’re seeing now in the Land of the Free."

https://www.sovereignman.com/trends/without-rule-of-law-youre-just-a-banana-republic-33965

  1. "In 2022, it will become clear to more people what many in the web3 world already know: the best way to rein in big tech companies is through competition, not regulation. Already, there are policymakers in Washington who appreciate that web3 is about much more than cryptocurrency or speculation. In the coming year more leaders, in America and in other democracies, will realise the need for sensible regulation that encourages responsible innovation while also allowing entrepreneurs to build the next generation of the internet."

https://archive.md/F1cjK#selection-781.0-783.1

  1. This is a great teardown of Tiger Global who is shaking up the world of VC. Worth a read. I'm so glad I'm not a growth stage investor right now.

"Bobby Fischer once said, "Blitz chess kills your ideas." For Fischer, the rapidity of the game handicapped one's ability to generate sophisticated, novel stratagems. 

It's tempting to think of today's venture market and Tiger's role in it, along the same lines. This is a spray-and-pray business now, this line of thinking goes, and Tiger's got the biggest hose. 

While it's true that Tiger might not have the most conceptually adventurous of investment theses, there is plenty of thought in its approach. By adjusting its mandate, shifting its resource allocation, and mapping the ecosystem, it has developed a fund capable of executing around the world, around the clock, ceaselessly and sleeplessly. 

For now, at least, it is the closest thing venture capital has to a winning machine."

https://www.readthegeneralist.com/briefing/tiger-global

  1. I fully subscribe to this view.

"There are people who can see the truth in spite of prevailing wisdom and make their own investment decisions outside of the influence of others. Through the history of financial markets, some of the world's best traders have been the independent ones, the loners, and the ones willing to discount others' opinions."

"The more insane a period of groupthink, the bigger the reward for those who have the guts, the perseverance and the analytical prowess needed for going against the established narrative. Once the current bout of silliness has sucked all oxygen out of the system, there will be a bigger reckoning than ever before. The opportunity to benefit financially from it is what I view as the biggest upshoot of the strange era we currently live in."

https://www.undervalued-shares.com/weekly-dispatches/the-value-of-going-against-groupthink

  1. Net net: read the Lame-stream media but learn to think for yourself.

"We have several clear examples: 1) inflation is good, 2) fantasy relationships that assume the person is the top 1%, 3) sitcoms suggesting the perfect life is seeing the same people everyday for coffee and 4) making it seem like rich people are evil though cinema. 

As you can see, the same theme persists. Anything to make you believe it is “okay” to be mediocre."

"Historical Context: Back 100 years ago, if you didn’t fit into a “tribe” you could be ostracized and die. This is something that is evolutionary and fortunately we’re now entering into the *opposite* era. You can now become more powerful than an entire village by yourself through the use of technology. 

Future Context: The new era: If you “fit in” you are now replaceable. Read that short sentence at least 15-20 times if you have to. The future is sovereign individuals who are not replicable. If the current “value addition” is simply being a middle man or copying others, you will go to zero suddenly similar to the life of a Turkey. It works for a while until it doesn’t.

By getting you to fit in, you are much weaker. Once again, if media convinces you to fit in, you end up floating along and living an “average” life just like everyone else. You don’t want to know what that looks like over 80 years because it ain’t pretty."

BowTied Bull
Mainstream Culture is Designed to Encourage Weakness
Welcome Avatar! We’re taking a pause from the money printer and people buying holiday gifts. Instead, we’re going to focus on the culture that mainstream media is attempting to create. In a word it is weakness. Effectively, the goal is to drag down high performers by calling them…
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  1. This is spot on. #Portfolioentrepreneur

Errors of Omission, or Errors of Commission: Some Lessons from Hundreds of Startup Investments

I always learn new things when I listen to Patrick OShaughnessy’s podcast. Carl Kawaja is an incredible investor at Capital Group which does a lot of public stock investing. Made me reflect on my own investing career now with 8 years of data. So I spent some time this last year or so, dissecting my investments and thought process behind them. 

I always ask myself when doing a deal: How am I so lucky to get this deal? What did I miss? 

Having Anxiety, Ambiguity and Uncertainty is a very good thing to have as an investor. It forces you to do your homework & approach every investment with more rigor in due diligence. It also forces you to re-look at your investments with fresh eyes and question your assumptions where possible. 

Managing Ego: is probably the biggest challenge for an investor. Paraphrasing Chris Sacca: “When you do well, you think you are smart and awesome. When you don’t do well, you are unlucky. You need to invert that. When you are doing well, you should be thinking you are lucky. When you don’t do well, you should realize you are an idiot and make sure you hustle to learn quickly and get better at it. FAST.” 

Investing in Slopes and Curves: Understand that markets are much bigger than you think. I make the mistake of misreading the market size all too often. I’m either really wrong on just how big the market is or discover over time that there is a more limited market than expected. This second point is usually tied to my next big omission. 

This mistake is in not understanding the timing of a startup, which is usually tied into one trend but multiple trends coming together. That acts like a massive wave that drives a startup forward. I was right on the 3D printing market long term and the teams as well, but I was totally off on the timing. The aphorism of “Being too early is the same as being wrong.”

The biggest and hardest part is really understanding and reading the people piece. In the early stage, founders are everything. And you really don’t know how a founder will react in times of crisis or when the chips are down. You can ask lots of questions, ask them to do special personality tests & do all the reference checks you want. You will miss something and get this wrong. Thankfully I do have a very large sample set of founders. I always compare the founders I talk with against my top 10% of founders in my portfolio. If they compare well (obviously assuming I like the business and market), I usually do the investment. Every time I break this rule I usually end up with deep regret in doing the investment. 

The key point is that investing is a constant battle to get better by learning about your own psychology and blind spots or else you will fall by the wayside of irrelevance. I never understand investors who are arrogant and think they know everything. (They usually don’t and the arrogance is to hide their massive insecurities). Any new investor who says or thinks investing is easy usually does not last long in this business. As they say, there are two types of investors in Silicon Valley: “Those who are humble and those who will be humbled.”

Freedom is Never Free: Earning an Exit and Building a Global Lifestyle

Freedom is this esoteric term that is used a lot in the United States, yet so many people here don’t really understand what it really is. It’s a state of mind of being free. 

It’s defined by Wikipedia as:

Freedom, generally, is having the ability to act or change without constraint. Something is "free" if it can change easily and is not constrained in its present state. ... A person has the freedom to do things that will not, in theory or in practice, be prevented by other forces.

Whether this is financial freedom, freedom of speech, freedom to worship or not, Sexual freedom, freedom to travel. This has only truly been around in human history for a relatively short period of time (Ie. 200-250 or so years). 

Freedom has to be fought for and earned. And it is not cheap. 

Yet, I see people in the former Soviet Bloc countries (Poland, Ukraine, Estonia, Georgia, Latvia, Lithuania, Czech & Slovak Republics, Romania, North Macedonia, Montenegro, Croatia, Hungary, Serbia) having far more freedom than we do in the Woke West. And the people in all these former Communist countries have a far deeper appreciation of this freedom than we do. It’s because they understand what it’s like to not have it and gain it. 

We in the West (USA, Canada & most of Western Europe, Australia, New Zealand) have it but most people here take it for granted. And now we seem to be on a slippery slope to losing it. 

Just look at the growing illiberalism & government (Fed, State/Provincial & Municipal levels) overreach in Canada, Australia, New Zealand  etc. Or at cultural level, we see the extreme leftist Woke PC thugs or nutty Right wing in the US that is crowding out any rational discussion. So many of us end up self censoring ourselves for risk of “offending” someone. (Usually someone weak minded I should add: F—ing brain washed snowflakes).

On one side, the government is getting bigger and more heavy handed. Yet at the same time they are more ineffective and dumb. This is not a good combination. So along with this growing illiberal State, there is also a massive Corporate Autocracy (FAANGs & Medical/Media/Pharma monopolies anyone?) that is leading to a decline in overall quality of life and much higher costs. 

The world is a big place and “Exit” is a very logical strategy. We are seeing pockets of effective well run government and overall good places to live. No surprise many of these places are small and somewhat City-State-like. Modern Entrepots like I detailed in a previous post: https://hardfork.substack.com/p/back-to-the-future-modern-entrepots. 

Doug Antin has a very articulate and intelligent way to figure out which jurisdictions make sense for you. (https://dougantin.com/lifes-tradeoffs-impact-where-you-live-why). You can find a place with a good quality of life that fits you. It’s not easy but nothing worthwhile is supposed to be easy. 

This is a wake up call and a call to action. If you are not thinking of an exit strategy and global approach to living and investing, you are doing yourself a disservice. 

Better to be prepared than not. As per a previous write up, (here: https://hardfork.substack.com/p/self-sovereignty-versus-growing-government), create some options for you and your family. You don’t want to be like any Jews still left in Germany in 1936 when the borders closed. Or Chinese Indonesians in May 1998 when Suharto fell and the Bumi populace rioted and viciously attacked them. 

As the Roman saying said: “If you want peace, prepare for war”. Or in this case, If you want peace, Prepare for exit and emigration. You never know when this might actually be necessary.

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