The Sunday Drive - 03/10/2024 Edition [#101]
Musings and Meanderings of a Financial Provocateur
👋🏼 Hello friends,
If you haven’t already, don’t forget to spring forward and set your clocks ahead an hour. Now, let's enjoy a leisurely Sunday Drive around the internet.
🎶 Vibin'
In honor of the start of South by Southwest 2024 in Austin, TX this weekend, I’m vibin’ to one of my favorites by the late Stevie Ray Vaughan - Tightrope performed live on Austin City Limits in 1989.
The song also somewhat reminds me of what is going on in the financial markets right now. On the one hand, it is starting to feel a bit exuberant. Yet, on the other hand, there’s quite a wall of worry that the market is climbing - interest rates, corporate earnings, dollar weakness, inflation measures, the unemployment rate, political and geographic uncertainty. The list goes on… and so does this market, at least for now.
RIP SRV. I miss you, as do many, many others.
💭 Quote of the Week
“Even if you’re on the right track, you’ll get run over if you just sit there.”
– Will Rogers
📈 Chart of the Week
For all the talk of the Magnificent 7, the U.S. stock market is one of the least concentrated in the world. Its 10 largest companies by market value — which includes those tech giants, plus Berkshire Hathaway and a rotating cast of others — account for 19% of the total, far less than in the UK (28%), Germany (45%), and Taiwan, where chips giant TSMC is 40% of the entire market, according to UBS’ new investment yearbook. If Samsung (South Korea) or BHP (Australia) or AstraZeneca (UK) collapsed, those countries would lose not just national champions but linchpins of their capital markets.
A counterpoint, also from UBS: The importance of Microsoft, Meta, and other Silicon Valley stocks comes less from their outsized footprint in America than from America’s outsized footprint in the world. The US dethroned Japan in 1990 as the most valuable stock market, and now accounts for 60% of the world’s total value. AstraZeneca can’t swing global stocks; Apple can. Courtesy of Liz Hoffman of Semafor.
🚙 Interesting Drive-By's
This week we have articles on global growth, intelligence, flexible work, and goal setting:
📈 How Fast Can the Global Economy Grow? - from James Pethokoukis
In a 2021 analysis, OpenPhilanthropy analyst Tom Davidson points out the approximately two percent per year of constant “exponential” growth in GDP per capita in the United States over the past 150 years, a pace he uses as a benchmark for the realistic "frontier" of economic growth for the foreseeable future. (This view anticipates that global GDP will grow at a slightly higher rate than this, factoring in catch-up growth among less developed economies.)
But Davidson thinks something faster than exponential growth is possible, what he calls “explosive” growth. He points to deep historical data that shows a pattern of growth characterized by a notably sharp increase. This pattern shows that not only has the economy been growing, but the rate of growth has been accelerating over time. For example, it took thousands of years for the global economy's annual growth rate to increase from 0.03 percent to 0.3 percent, but it took only a few hundred years to leap from 0.3 percent to three percent. This trend, as he sees it, suggests economic growth is building on itself, becoming more efficient and powerful over time. [link]
🤔 The Dumber Side of Smart People - from Morgan Housel
Mae West said, “Too much of a good thing can be wonderful.” That might be true for some things – health, happiness, golden retrievers, maybe.
But in so many cases the thing that helps you can be taken to a dangerous level. And since it’s a “good thing,” not an obvious threat, its danger creeps into your life unnoticed.
Take intelligence. I’m talking about book intelligence, the kind that shows up in SAT scores and GPAs.
How could someone possibly be too intelligent? How do you get to a point where you realize you could have been more successful if you had been a little dumber? [link]
💡 ”Flextirement” is the Future of Work - from Neil Costa
Just as they entered the world in large quantities following World War II, baby boomers—and even older Gen Xers—are now exiting the workforce in a mass retirement.
This is set to worsen preexisting labor shortages across industry sectors, including low-skill level roles, complex blue collar roles, healthcare industry jobs, and even highly skilled white collar roles.
As this mass exodus shakes up the workforce, companies are scrambling to retain workers for long enough to develop succession plans and thoughtful knowledge transfers so valuable skills and knowledge don’t simply walk out the door with these workers. One creative and straightforward strategy is to consider offering a flextirement program.
When you think of flextirement, you might think of someone who retired from their full-time career only to reenter the workforce, picking up a part-time role as a substitute teacher or retail position at the local store to keep busy or be social.
However, this is not the case. If you haven’t heard of flextirement before, you are not alone. But the market and labor conditions are pressing for something new and that solution is flextirement. [link]
❤️ How to Use ChatGPT to Set Ambitious Goals - from Rhea Purohit
I’ve never been consistent about setting goals for myself.
Even the prospect of sitting to write about my goals is mildly terrifying. I feel self-important and silly.
Besides, the few nuggets of valuable insight I have about myself, I’ve stumbled upon in conversations—warm, free-flowing dialogues with people I trust. Exchanges like these prompt candid, honest self-reflection I’ve never found on a blank Google Doc.
Instead of staring at a blinking cursor every December, when everyone around me seems to be deep in self-assessment, I just wait for one of these conversations to come along—maybe at a holiday party, a friend’s home, or a family gathering. The process is unstructured, disorganized, and entirely unpredictable. But it works.
This year, February rolled around and I was still waiting to have that conversation. But inspired by Dan Shipper’s interview with Dr. Gena Gorlin, I grabbed my laptop, filled up an oversized mug with coffee, and took matters into my own hands.
Gorlin is a clinical psychologist at the University of Texas at Austin who focuses on the psychological needs of startup founders. In the interview, Gorlin uses ChatGPT to conduct an incisive and systematic annual review and goal-setting session. She feeds ChatGPT her old journal entries, and it writes a year-by-year personal biography of her life, helps her set goals for the year ahead, and points out blind spots she might’ve missed in the half-decade of entries. It’s something out of a dream. [link]
👋🏼 Parting Thought
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 (X ‘em?) at me.
Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed.
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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