- 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.“
Misc
Miscellaneous is often where the gems are.
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.
Cap Rates and Interest Rates
- Q: How do real estate cap rates move with interest rates?
- A: Directionally and imperfectly.
- Source: Verus.
Cat Bonds
- Pricing levels of Catastrophe Bonds (explained here) have hit a 30-year high.
- “According to estimates by Guy Carpenter, a global risk specialist and provider of ILS sourcing and pricing information, the premium, or rate on line, of cat bonds increased by an annual rate of approximately 30% in January 2023, only the third time in three decades prices have reached such a level.”
- Bloomberg article here.
- Source: Amundi h/t bpsandpieces.
U.K. Covid Inquiry
- The full transcript of the testimony given by Lee Cain and, especially, Dominic Cummings for the inquiry into the government’s handling of the Covid emergency makes for long but utterly fascinating reading.
Where is Venture Investment Going?
- A useful chart from the Angelist state of venture report for Q3 2023 showing what areas venture dollars are going.
Secondary PE
- Nice table showing at what valuations LP interests in various types of private equity funds are changing hands.
- Source.
Voting Labour
- Older individuals vote Conservative.
- However, if an older individual has a struggling younger relative, they tend to vote Labour.
Paying Doctors
- CMS requires that any payment over $10 by a drug or medical technology company to a doctor or healthcare provider is disclosed.
- You can actually see all of these payments here.
- One can search by company and even individual doctor.
State of AI Report 2023
- We have covered this series of reports before.
- The latest 2023 report is worth a flick (all 160 slides).
- This graph, for example, shows the largest Nvidia H100 chip clusters – interesting to see TSLA there, who also run the 4th largest A100 cluster in the world.
- Or see Slide 76 which suggests that Nvidia’s advantage (the use of its chips in academic papers) continues to increase.
Fundraising
- Essay by Paul Graham on startup fundraising. Interesting observations.
- It is always a no until it is a yes – investors lead you on.
- Have multiple plans to fit multiple investor types (and sizes).
- Valuations don’t matter that much.
State Level Infrastructure
- There is substantial variation in the cost of infrastructure (here road resurfacing costs per mile) across states.
- Why? This paper explores the reasons using a unique dataset.
NAV Loans
- Borrowing by private equity firms at the fund level.
- Ted Seides argues it is an end-of-cycle phenomenon.
- “NAV loans strike me as a canary in the coal mine signaling the end of the private equity boom. According to Preqin, 645 firms have not raised a new vehicle since 2015. With interest rates higher and the fundraising environment tighter, credit is scarce. NAV loans feel like the “extend and pretend” activity we saw after the GFC. For every Vista NAV loan, there are probably ten used to cure the woes of a GP.”
Eric Schmidt on AI
- Interview between Goldman Chair/CEO David Solomon and former CEO/Chair of Google on the future of Generative AI is worth a read.
- “In general, the disruption occurs first in the industries that have the most amount of money and the least amount of regulation.”
- Pairs nicely with this analysis of the latest batch of Y-combinator companies that are using AI/ML startups (139 in total!) and what areas they are working on.
Sponge City
- Fascinating article on how Copenhagen, as a reaction to a major flood in 2011, has “re-engineered” itself to protect against any future flood risks.
China Research
- “For the first time, China has overtaken the United States as the number one ranked country or territory for contributions to research articles published in the Nature Index group of high-quality natural-science journals.”
- Source.
Less Well-Known but Useful Websites
Edward Luttwak
- Interview with the military and grand strategy author – Edward Luttwak – thought-provoking throughout.
- America’s power abroad, especially in Asia but increasingly with a resurgent Nato, is strong due to its alliances.
- But this power is useless unless you have cohesion at home. There America is experiencing a cultural war.
- Parallels with the Roman Empire are clear – “I think we could last another couple hundred years, but not much longer. For Rome, they had barbarian migrations and, of course, an ideological break that was fatal. Rome’s institutions were remarkable, and their concept of citizenship was something deep and profound, but the Romans were overwhelmed demographically.”
Financial Inclusion
- It’s no secret that emerging markets have been blazing the trail in terms of financial inclusion in the digital age.
- Incredibly, thanks to digital payments, India hit its 80% financial inclusion goal in six years, 41 years ahead of plan!
Attractiveness and Fund Manager Performance
- “In this paper, we study the relationship between stock fund managers’ facial attractiveness and fund outcomes. Utilizing the state-of-art deep learning technique to quantify facial attractiveness, we find that funds with facial unattractive managers outperform funds with attractive managers by over 2% per annum. We next show that good-looking managers attract significant higher fund flow especially if the funds are available on Fintech platforms where their photos are accessible to investors. Good-looking managers also have greater chance of promotion and tend to move to small firms. The potential explanations for their underperformance include inadequate ability, insufficient effort, overconfidence and inefficient site visits.”