Lessons from Global Conflicts

By |2018-05-16T05:40:54+00:00May 16th, 2018|Global Market Update|

What is the “Thucydides Trap”? Map of Ancient Greece. Source: Wikipedia Thucydides was an ancient Athenian general who wrote about the Peloponnesian War between Sparta and Athens. Sparta had been the dominant power in Greece. They had a harsh military culture built around their seemingly invincible army. Athens was a rising power, commercially and at sea. They had built the most powerful navy in the Mediterranean Sea. War between the two city-states was inevitable, according to Thucydides, because Athens’ growth challenged Sparta’s dominance. An [...]

Real Returns, Real Differences

By |2018-05-15T06:29:25+00:00May 15th, 2018|Global Market Update|

Why have US stocks done so well? NY City by Night. Photo: Paul Barcellos, Jr. Source: Wikimedia Since 1900, US stocks have grown 6.4% per year, on average, after inflation. 2% of that has been capital gain, and over 4% has been dividends and reinvested dividends. A dollar invested in 1900 would have grown to be more than $1,400 today. By comparison, a dollar invested in the UK in 1900 would have only grown to about $500 today – a 5 1/2 % real [...]

Bicycles for our Brains

By |2018-05-14T06:41:29+00:00May 14th, 2018|Global Market Update|

What good is technology? Photo F. Muhammad. Source: Pixabay A couple of decades ago, Scientific American published a study, where the researcher measured how much energy it took various types of animals to travel. In the results, the California Condor was the most efficient, soaring on wind currents and thermals. People were more efficient that dogs or rabbits or bees, but not as efficient as a horse or condor. But the most efficient animal in the study was a person riding a bicycle. Over [...]

Foolish Wisdom

By |2018-05-11T07:38:37+00:00May 11th, 2018|Global Market Update|

Would you rather be the Leader or the Leader’s fool? “The Court Jester” by William Merritt Chase. Source: Wikimedia There’s a tragic cycle in human affairs. A leader solves a problem and is cheered for wisdom or decisiveness or practical understanding. They’re given authority, perhaps political leadership. The adulation becomes intoxicating. They don’t want to hear bad news – no one does – and they acquire toadies and hangers-on that latch onto them like leeches. These parasites only tell them what they want to [...]

A Bicycle Built for History?

By |2018-05-10T06:58:03+00:00May 10th, 2018|Global Market Update|

Is each generation destined to repeat the same errors over and over? Photo: Ben Kerckx. Source: Pixabay There’s a theory that says civilization is like the tide, moving in and out on a regular basis. This idea was perhaps first articulated by the ancient Greeks, as they tried to understand what makes up a just society. The story of Daedalus and Icarus illustrates this: Icarus, excited by having the ability to fly, flew too close to the sun. His wings melted and he crashed [...]

Group (un)Think

By |2018-05-09T06:03:37+00:00May 9th, 2018|Global Market Update|

What is “Social Proof”? Photo: Petr Kratochvil. Source: Public Domain Pictures “Social Proof” happens when we rely on the views of group we’re with to form our own opinions. Everyone is strongly influenced by people that they’re with. A researcher once had some college students match the length of a line on one card to one of three alternatives on another card. When subjects worked alone, almost all of them made the correct choice. But when they were put into a group that had [...]

By Their Belt-Straps

By |2018-05-08T07:04:28+00:00May 8th, 2018|Global Market Update|

What is the Belt-Road Initiative? Illustration: Lommes. Source: Wikimedia In 2013, China’s President Xi Jinping announced plans to connect East Asia and Europe via a network of rail, road, and sea routes to facilitate trade, cultural exchange, and open flows of capital and people. Shortly thereafter, China announced that over $160 billion of infrastructure projects were in planning or construction along the way, projects like a 700 MW hydropower station near Islamabad, Pakistan, or extending the current Eurasian Landbridge – a 7,000 mile rail [...]


By |2018-05-07T06:47:47+00:00May 7th, 2018|Global Market Update|

What is a capital-intensive business? Illustration: Charles Graham, Harper’s Weekly. Source: Wikimedia Capital is what makes things. Factories and design studios and drilling rigs and construction equipment. To build the Panama Canal, the managing engineers employed thousands of steam-powered excavating machines, rather than millions of workers with shovels. Today, our economy runs on ideas, rather than steam-power. It needs people who are creative, who can pull innovations and material and suppliers and delivery together on a mobile platform that is elegant and easy to [...]

Visions of Greatness (Part 5): A New Direction

By |2018-05-04T06:00:58+00:00May 4th, 2018|Global Market Update|

How do you deal with a rising Great Power? Photo: Victor Hancek. Source: Picjumbo For decades, the US held a policy of “constructive engagement” towards China. By giving China “Most Favored Nation” status, encouraging trade and cultural exchange, Washington hoped to draw China into – if not the West – at least the broader family of nations. We would look the other way with human rights abuses, and try to avoid major trade disputes. Now, four decades of constructive engagement led to a massive [...]

Visions of Greatness (Part 4)

By |2018-05-03T06:24:57+00:00May 3rd, 2018|Global Market Update|

Can China build a great economy? Victoria Harbor and Hong Kong skyline. Photo: Samuel Louie. Source: Wikimedia In some ways, this seems like a foolish question. China’s economy is already huge. They’re the second largest economy in the world: $10 trillion, about half the size of the US. They’re a major player in trade, manufacturing, consumer goods, and the internet. But their stock market is tiny. They’re only 3% of global equity markets – about the size of France. And their bond market is [...]