Behind one is a car 🚗. Behind the other two are goats 🐐.
You pick a door. The gameshow host opens another, revealing a goat.
You can choose to stay with your original choice or switch. What should you do? [Give it a try!].
The Monty Hall problem became famous when a columnist, Marilyn vos Savant, known as the world’s smartest woman, said you should switch, resulting in hundreds of letters, including from the brightest minds in mathematics, arguing she was wrong.
This engrossing article by Steven Pinker shines a bright light on this dilemma.
“People’s insensitivity to this lucrative but esoteric information pinpoints the cognitive weakness at the heart of the puzzle: we confuse probability with propensity.”
“A propensity is the disposition of an object to act in certain ways. Intuitions about propensities are a major part of our mental models of the world.“
Probability is “the strength of one’s belief in an unknown state of affairs“
“The dependence of probability on ethereal knowledge rather than just physical makeup helps explain why people fail at the dilemma.“
“They intuit the propensities for the car to have ended up behind the different doors, and they know that opening a door could not have changed those propensities. But probabilities are not about the world; they’re about our ignorance of the world. New information reduces our ignorance and changes the probability.“
Since 2016 net migration from the EU to the UK has fallen.
The pandemic has likely pushed it into negative territory.
Certain sectors – like hospitality, transport, manufacturing, administration and construction – will be hit the hardest as they rely on EU labour for 10-15% of their work force.
Yet according to this article, reality is very far away, if not unachievable.
First, you need a bioreactor facility – even one that is equivalent to 1/3 of all the volume of the entire biopharmaceutical industry today would only yield 22m pounds of lab-grown protein or 0.02% of US meat production.
To get to 10% of global meat consumption in 2030 you need 4,000 of these at a cost of $1.8 trillion.
The bigger problem is these are live animal cells and hence are very vulnerable to any contamination. Bacteria would crush these cells as they grow much faster, while viruses would infect as the culture has no immune system. These cascade shutting down entire production facilities.
The solution – clean rooms – are very expensive.
Full paper on the topic and h/t NZS Capital (which lists many other problems from the article).
Provocative chart from latest Bain technology report.
“When the facts are reviewed, most big tech M&A spending actually benefits consumers and doesn’t hamper competition. That’s according to Bain’s analysis of all $300 million-plus acquisitions, totaling more than $150 billion, from 2005 to 2020 by the five US hyperscalers: Alphabet, Amazon, Apple, Facebook, and Microsoft“
Overall they find that, excluding Linkedin, 72% of M&A spending created value for consumers, rising to 89% if we exclude Nokia/Motorola.
For those interested the methodology is in the appendix of the report.
A really beautiful must read piece written by a self-professed supply chain nerd.
Weaving in analogies that bounce in time – from the internet age to husbandry – supply chains are brought to life.
“Supply chains are a new class of engineered-emergent artifact, one that includes a few other globe-spanning things like the internet, the air travel system, and low earth orbit, that exist at a level of Gaian phenomenology, terraforming, and planet-scale husbandry.We only ever catch local glimpses of these things.”
“We have to understand these beasts, in all their evolving, learning glory, while living within their bellies.“
The type of language used in earnings calls has a significant impact on stock returns.
According to Nomura, simple language (as measured using Gunning Fog Index) leads to higher returns and a considerably better Sharpe ratio when compared to complex language.
This is distinct from earnings call length – which doesn’t correlate to complexity.
For those interested we previously posted further interesting stats on language in company publications.
Orwell offers a lot of advice on writing well, a vital skill for any investor, in his essay “Politics and the English Language”
This postpulls out some of the main “bad habits” to be avoided.
It matters because writing clearly reveals understanding.
“You can shirk it by simply throwing your mind open and letting the ready made phrases come crowding in. They will construct your sentences for you — even think your thoughts for you, to certain extent — and at need they will perform the important service of partially concealing your meaning even yourself.”
“A scrupulous writer, in every sentence that he writes, will ask himself at least four questions, thus: What am I trying to say? What words will express it? What image or idiom will make it clearer? Is this image fresh enough to have an effect? And he will probably ask himself two more: Could I put it more shortly? Have I said anything that is avoidably ugly?“
Useful resource assessing the state of the logistics industry.
The index has been going for 5 years, consists of eight components and is calculated using a diffusion index i.e. readings above 50 indicate expansion.
The current stretch above 70 – meaning significant growth – is the longest on record.
Will be interesting to watch if the situation improves and along which components.
