👋🏻 Hello friends,

Let's take it easy and enjoy a leisurely Sunday Drive around the internet.  

Vibin'

We are getting ever closer to the launch of the New Lantern Hedged Equity Fund, a privately offered hedge fund. The Fund is a project we’ve been working to bring to life over the last several months. As the date of inception approaches, I’m reflecting on the 33 years I spent as a dolphin in captivity - corporate captivity that is. (H/T to the Dragon Slayer).

It’s been a little over a year since I retired from the corporate world and set off on my own. I’ve learned so much - more than I expected to, quite honestly. The launch of the hedge fund represents the culmination not only of over three decades of professional investment management experience, but also of the experience I’ve gained since “hanging my shingle”.

So this week, I’m vibin’ to Come Sail Away by Styx from their 1977 album The Grand Illusion. I hope that all who are reading (and listening) to the Sunday Drive will continue on this journey with me as we take this next step.

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💡  Quote of the Week‌

💡 Bonus Quote of the Week

📈  Charts of the Week

The above charts represent two parts of the same issue, namely the ability - or lack thereof - for the Federal Reserve to get to their (quite arbitrary) 2% annual inflation target.

As the Baby Boomers make their way through their lifecycles and continue to exit the workforce, I think policy makers are going to have to deal with the inescapable fact that we just don’t have enough workers in the U.S. It’s even worse in most of the rest of the developed world.

In my view, over the next decade or two, the Fed has two basic choices: either force a severe recession to destroy the demand for labor, or accept a somewhat higher target for inflation, perhaps 3-3.5%.

🚙 Interesting Drive-By's

📈  The Forgotten Lesson of Benjamin Graham’s Life - A lot of Ben Graham’s rise in life was during a period when there was plenty of low hanging fruit among mediocre businesses that were way too cheap. He was relatively rare in doing his hunting in that garden, and so he made a pretty good living.

That low hanging fruit eventually went away as the aftermath of the Great Depression went away. And Graham actually made more than half of all the money he made in his life out of one stock. That stock was Geico, which was a great business. So if you actually look at the great man’s own life, you’ll see that what he taught wasn’t the way he got rich himself.

💡 Where Big Leaps Happen - Few talented people get all their value from being great at one thing. Being so good at one thing that it’s enough to make you extraordinary is rare. More likely are people who are pretty good at a few things and combine those things to make a big leap into something great.

Steve Jobs was a pretty good technologist and a pretty good designer. Neither on their own was exceptional. But the combination of the two was extraordinary, creating the bronze of our time. Same with Einstein, who mixed good math skills with a good imagination to create pure genius.

🧐 One More Thought on Fed Futility - An important channel through which monetary policy affects the economy is the wealth effect — when asset prices rise, people spend more, and when they fall, they spend less.

But higher wealth inequality might just change how much that channel affects overall spending in the economy.

🤓 Why AI Won’t Cause Unemployment - Fears about new technology replacing human labor and causing overall unemployment have raged across industrialized societies for hundreds of years, despite a nearly continual rise in both jobs and wages in capitalist economies. The job apocalypse is always right around the corner; just ask the Luddites.

We had two such anti-technology jobs moral panics in the last 20 years — “outsourcing” enabled by the Internet in the 2000’s, and “robots” in the 2010’s. The result was the best national and global economy in human history in pre-COVID 2019, with the most jobs at the highest wages ever.

👋🏼 Parting Thought

“Hey honey, have you seen my phone?”

If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em at me.

‌I hope you have a relaxing weekend and a great week ahead. See you next Sunday...

Your faithful financial provocateur,

-Mike‌

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