- “Senior secured bonds have always been a constituent of the high yield market. However, over the past few years, their share of the overall index has increased dramatically and is now at a record level of the market. While the coupon structure is different, senior secured bonds are “secured” by the assets of the borrower, much like leveraged loans. This recent development — the growth of senior secured bonds as an overall percentage of the high yield market — blurs the lines between these markets and may lead to increasingly similar behavior between the markets.”
Misc
Miscellaneous is often where the gems are.
Battery Tech
- “Over the past 30 years, battery costs have fallen by a dramatic 99 percent; meanwhile, the density [a key measure of quality] of top-tier cells has risen fivefold.”
- Source.
Data Center Power Usage Improvements Flatlining
- Looks like days of significant improvement are behind us.
- Source.
Private Credit
- Nice history of private credit – the talk of the town.
Larry Fink Mentions of ESG Peaked in 2020
- Nice analysis of Larry Fink’s annual letter for terms related to sustainability and climate.
- The peak was in 2020.
- Source.
Nat Bullard Decarbonization Deck
- Useful 200 slides on all things energy transition.
- For example, 14% of all global VC/PE went to climate tech
Idea generation
- “The common trait of people who supposedly have vision is that they spend a lot of time reading and gathering information, and then they synthesize it until they come up with an idea.” — Fred Smith, Overnight Success: Federal Express and Frederick Smith, Its Renegade Creator
Manager Dispersion
- 20-year dispersion of $1,000 invested in the top and bottom decile fund manager for each asset class.
- Source.
Gold vs. Equities
- Despite a recent rally, gold, when priced relative to equities trades well below its historic (back to 1970) average.
- Source.
How to Be The Best Salesman
- The most successful salesman in history sells cars.
- How?
- Girard offers a simple answer: “People want a fair deal from someone they like.”
- When questioned about his actions to get people to like him, he simply says, “I tell them that I like them.”
YC
- A very good history of Y Combinator and how Paul Graham, through his essays and otherwise, had a huge part to play in building the cult of the founder.
- This history is trapped inside a not-so-convincing argument of YC’s demise.
Active Management is Cyclical
- Periods of active underperformance tend to be followed by periods of outperformance.
- Source.
AI Innovation
- Nice chart showing the acceleration of innovation in AI as measured by parameters per model.
- Source: Julius Baer.
Desalination Costs
- Seems like a big deal.
- “The chart shows how the cost of desalination has fallen over the long term. This has been driven by technological advances, larger plants translating into greater economies of scale, and project development choices such as colocation of desalination plants with power plants.“
- Source.
Charlie Munger Quotes
Capex Booms
- From US manufacturing construction to European defense – “2023 saw a multi-faceted global fixed asset investment boom“.
- Source: Top Down Charts.
Enlightened Concepts
- A list of thirty useful principles that offer delectable food for thought.
- Beginners bubble effect – “You cannot learn what you think you already know.”
- Benford’s law of controversy – “We tend to fill gaps in information with emotion.“
Return on Degrees
- This DoE/IFS study examined the return on undergraduate degrees in the UK.
- Interestingly, degrees where the percentage getting a positive return is low, are much worse for men than women.
Tom Whitwell 52 Things
- The annual list is always full of interesting facts.
- “The US Defence Department earns $100m/year operating slot machines used by soldiers on their bases.“
- “In the 19th Century, champagne was sweetened depending on local tastes. Russians had 300 grams of sugar added, the British just 50 grams. In 1842 Perrier-Jouët introduced unsweetened champagne. It failed and people called it ‘Brut’, but that’s how all champagne tastes today.“
- “In 2004, it took one year to install 1 gigaWatt of solar power. In 2023, installed 1 gigaWatt of solar power every day.“
Closed-End Funds
- “For a firm that eats, sleeps, and breathes discounted CEFs, this is the most compelling entry point we’ve seen in 15+ years,” Matisse’s Nik Torkelson, whose firm invests in and researches closed-end funds, wrote in a note.
- Full Bloomberg articles here.
- Interesting opportunities in closed-end funds as discounts have blown out. This is the case in the UK as well which has a large investment trust industry.