What We’re Reading

Here are a few good articles the Collaborative Fund team came across this week.

Philanthropy

Chuck Feeney is an amazing person, giving away his entire fortune while he’s still alive:

Altogether, he had contributed $8 billion to his philanthropies, which have supported higher education, public health, human rights and scientific research … His remaining personal net worth is slightly more than $2 million. That’s not quite broke, by any standard, but it is a modest amount for a man who controlled thousands of times as much wealth. He and his wife, Helga, now live in a rented apartment in San Francisco. “You can only wear one pair of pants at a time,” Mr. Feeney has said.

Economics

This is a great read on how hard it is to run a restaurant, even when it’s “successful”:

In 2013, it actually increased its revenue, pulling in $3.1 million. But despite making $200K more than it had the previous year, its net profit was $50K lower, as costs continued to creep up and up. What started as $250K profit and an 8.5% margin in 2012 was down to $40K and 1.5% by 2015. Because it had to pay off $42K in Small Business Association loans each year, this meant negative net cash flow for 2015.

Outlook

Most year-ahead forecasts aren’t worth your time, but this from AVC is well done:

Google, Facebook, and to a lesser extent Apple and Amazon will be seen as monopolists by government and individuals in the US (as they have been for years outside the US). Things like the fake news crisis will make clear to everyone how reliant we have become on these tech powerhouses and there will be a backlash. It will be Microsoft redux and the government will seek remedies which will be futile. But as in the Microsoft situation, technology, particularly decentralized applications built on open data platforms (ie blockchain technology), will come to the rescue and reduce our reliance on these monopolies. This scenario will take years to play out, but the seeds have been sown and we will start to see this scenario play out in 2017.

Careers

This “notes for the year” by Sam Altman is filled with good advice:

The framework I’ve found most useful for helping people think through career decisions is to consider both impact maximization and regret minimization—a decision that scores well on both is likely to be a good one.

Demographics

It will be interesting to see how Japan copes with this in the coming decades:

With a week left in the year, officials predict only 981,000 babies will have been born — a dip of 25,000 from 2015. The death count, meanwhile, is around 1.3 million. Japan’s fertility crisis has been many years in the making. As older generations start to die off without younger generations starting families behind them, economists say Japan shows all the signs of a “demographic time bomb.”

Wisdom

Yanan Ma Bledsoe published 350 pages of Charlie Munger speeches and articles. There is more business and life wisdom in here than you can imagine:

The great lesson in microeconomics is to discriminate between when technology is going to help you and when it’s going to kill you. And most people do not get this straight in their heads. But a fellow like Buffett does. For example, when we were in the textile business, which is a terrible commodity business, we were making low-end textiles - which are a real commodity product. And one day, the people came to Warren and said, “They’ve invented a new loom that we think will do twice as much work as our old ones.” And Warren said, “Gee, I hope this doesn’t work - because if it does, I’m going to close the mill.” And he meant it.

Have a good weekend.


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