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I focus on relevant business & finance articles while frequently drifting to topics such as sports, art, technology and more! MMR was created because I'm passionate about sharing what I find interesting.

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The defense industry and silicon valley have had a long history in tandem – there is even a lot of evidence that defense spawned the technology industry there. Whatever the case, an interesting parallel that popped into my head while reading this article. That thought was about the creation of the OSS (Office of Strategic Services) during WWII that preceded the CIA. While traditionally technologies were developed for military use first, could there be a new era of consumer-/industrial-driven advances being applied to warfare? Rather than the target customer for technology companies, the DoD is now more of a(n) sub-sector/afterthought due to companies focusing on problems that affect the mass population – and the military is tough to do business with for many reasons. While DARPA focuses on challenges that are 20-30 years out, the new task is to find challenges that need fixing which are much more immediate.

This is obviously a super-long read but I find it fascinating. We’re living through a truly unique time in the history of finance with all the extraordinary experimentation going on via central banking. There is no good way to sum up the essay but I think that this quote is pretty on-the-money: “History shows us that economic recovery from a depression has never been successfully engineered without a major debt reduction, default, hyperinflation, political revolution, or world war.” Now that is a pretty wide statement of possibilities, but I think that currently the mentality of the market is that – at least for the Fed – central banks have “beaten” the recession. The essay really is about volatility rallying for any of the stated reasons. I think it’s a pretty good bet vol is relatively cheap compared to all the “shadow convexity” that exists with these multi-dimensional risks playing out in real-time.

I’m a huge fan of Charlie Munger and the “mental-model” school of thinking. That’s why when I read this article it was just another confirmation that if you can find certain patterns in nature, they can be applied across a variety of disciplines. Here’s a good quote: “...the same basic species-area curve was found regardless of the species or habitat. To put it mathematically, the curve followed a power law, in which the change in species number increased proportionally to the square root of the square root of the area. ... Power laws are common in science, and are the defining feature of universality in physics.”

Aeon - The bloodstained leveler 12min

The principal sources of inequality have changed over time. Whereas feudal lords exploited downtrodden peasants by force and fiat, the entrepreneurs of early modern Europe relied on capital investment and market exchange to reap profits from commerce and finance. Yet overall outcomes remained the same: from Pharaonic Egypt to the Industrial Revolution, both state power and economic development generally served to widen the gap between rich and poor: both archaic forms of predation and coercion and modern market economies yielded unequal gains. ... Does this mean that history has always moved in the same direction, that inequality has been going up continuously since the dawn of civilisation? A cursory look around us makes it clear that this cannot possibly be true, otherwise there would be no broad middle class or thriving consumer culture, and everything worth having might now be owned by a handful of trillionaires. ... From time to time, it turns out, history has pushed a reset button, driving down inequality in marked, if only temporary fashion. ... every time the gap between rich and poor shrank substantially, it did so because of traumatic, often extremely violent shocks to the established order.

GMO - Emerging Value and Margin of Superiority 14min

Long-time GMO clients have become accustomed to a certain kind of behavior from our asset allocation portfolios. If they are reading stories about how well an asset class has been doing, chances are pretty good that their next account statement will show that we are a seller of that asset (assuming we owned some in the first place). If, on the other hand, headlines are about how horribly things are going for an asset class, our clients have come to expect to see us buying in the coming quarters. But recently we made a move across a number of our asset allocation portfolios that goes counter to that general pattern. After a strong first half of 2017 for emerging equities that saw them rise over 18%, we actually bought more emerging in early July. It seems like a non-intuitive move for us to make, but we believe it is the correct one despite the fact that the prospective returns to emerging equities have dropped a bit since the beginning of the year. Even though the absolute expected return for emerging market value stocks has decreased, we believe the margin of superiority of emerging value over other assets has actually increased. As its superiority is higher and emerging-specific risk is relatively benign, our willingness to bear its risk has increased at the margin, which created the opportunity for us to increase our allocation.

GMO - Why Are Stock Market Prices So High? 11min

In an investing and economic world in which almost everything seems to have changed in the last 20 years, one thing has remained constant: human nature. And, we can more or less prove it. At least in the case of the stock market. ... Our model does not attempt to justify the P/E levels as logical or deserved, nor does it attempt to predict future prices. It just shows what has tended to be the market’s typical response over the years to major market factors. By far, the two most important of these are pro t margins, the higher the better, and inflation, where stable and lower is better, except not too low. ... A third behavioral factor, which we first modeled 16 years ago and still has explanatory power, although much less than the first two, is the volatility of GDP growth. Notice that this is absolutely not the growth rate of GDP. ... we added two new factors, which we believe provide a little further value. The first addition was an on-off switch, which causes P/Es to be a bit lower after a down quarter. Again, not a very scientific reflex in a mean-reverting world, but understandable. The second was to add the US 10-year bond rate, where higher rates are negative, modestly improving the model even after the inflation component had done the heavy lifting for nominal interest rates. ... The market, however, appears not to care at all about the past or to learn much from it. This model for sure seems to say that for 92 years, at least, the market has with remarkable consistency been a coincident indicator of superficially appealing variables that in a strict economic sense have been inappropriate, and that have caused spectacular and unnecessary market volatility. The model is apparently a reflection of human nature and, of all factors influencing the market, human nature, as economically inefficient and unsophisticated it may be, seems the least likely to change.

The Atlantic - Have Smartphones Destroyed a Generation? 17min

I’ve been researching generational differences for 25 years, starting when I was a 22-year-old doctoral student in psychology. Typically, the characteristics that come to define a generation appear gradually, and along a continuum. Beliefs and behaviors that were already rising simply continue to do so. Millennials, for instance, are a highly individualistic generation, but individualism had been increasing since the Baby Boomers turned on, tuned in, and dropped out. I had grown accustomed to line graphs of trends that looked like modest hills and valleys. Then I began studying Athena’s generation. ... Around 2012, I noticed abrupt shifts in teen behaviors and emotional states. The gentle slopes of the line graphs became steep mountains and sheer cliffs, and many of the distinctive characteristics of the Millennial generation began to disappear. In all my analyses of generational data—some reaching back to the 1930s—I had never seen anything like it. ... I call them iGen. Born between 1995 and 2012, members of this generation are growing up with smartphones, have an Instagram account before they start high school, and do not remember a time before the internet. ... the twin rise of the smartphone and social media has caused an earthquake of a magnitude we’ve not seen in a very long time, if ever. There is compelling evidence that the devices we’ve placed in young people’s hands are having profound effects on their lives—and making them seriously unhappy. ... There’s not a single exception. All screen activities are linked to less happiness, and all nonscreen activities are linked to more happiness.

The New Yorker - The Race To Solar-Power Africa 24min

There are about as many people living without electricity today as there were when Thomas Edison lit his first light bulb. More than half are in sub-Saharan Africa. Europe and the Americas are almost fully electrified, and Asia is quickly catching up, but the absolute number of Africans without power remains steady. A World Bank report, released in May, predicted that, given current trends, there could still be half a billion people in sub-Saharan Africa without power by 2040. Even those with electricity can’t rely on it: the report noted that in Tanzania power outages were so common in 2013 that they cost businesses fifteen per cent of their annual sales. Ghanaians call their flickering power dum/sor, or “off/on.” Vivian Tsadzi, a businesswoman who lives not far from the Akosombo Dam, which provides about a third of the nation’s power, said that most of the time “it’s dum dum dum dum.” The dam’s head of hydropower generation, Kwesi Amoako, who retired last year, told me that he is proud of the structure, which created the world’s largest man-made lake. But there isn’t an easy way to increase the country’s hydropower capacity, and drought, caused by climate change, has made the system inconsistent, meaning that Ghana will have to look elsewhere for electricity. “I’ve always had the feeling that one of the main thrusts should be domestic solar,” Amoako said. “And I think we should put the off-grid stuff first, because the consumer wants it so badly.” ... Electrifying Africa is one of the largest development challenges on earth. Until recently, most people assumed that the continent would electrify in the same manner as the rest of the globe. ... Solar electricity, on the other hand, has become inexpensive, in part because the price of solar panels has fallen at the same time that the efficiency of light bulbs and appliances has dramatically increased. ... It will be years before it makes financial sense for solar companies to expand to the most remote and challenging regions of the continent.