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Investing, personal finance, and economics for liberal arts grads.

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This investment fund cuts through Kenya’s tech hype with “bloodthirsty capitalism”

NAIROBI, Kenya—Investing in Kenya can often be triggered by a desire to offer aid or social benefit.  But there is another way, exemplified by angel investment fund 88mph. "This,” program manager 28-year-old Nikolai Barnwell says wryly, smiling at the huddled groups of entrepreneurs, deep in animated conversation in a sun-drenched office resembling a warehouse, “is bloodthirsty...

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Google gets into gaming

Augmented reality + MMRPG video games + advertising 

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An overview of the Chinese economy

I haven't read it yet, but it looks promising.

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This is what high frequency trading looks like

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Google to build wireless networks across Africa

Two things on this.

First, this would be a brilliant long-term play on emerging markets growth. As this part of the global economy expands, they will be there to fully capitalize on it. They have the first mover advantage. It won't be profitable tomorrow, but farther down the line, this can be huge.

Second, even if other players come in and join Google, this type of activity is huge for the local economies. This, combined all the McKinsey stuff I just posted can really facilitate entrepreneurialism.

Imagine some poor african fellow, using his solar-powered hut to design a 3-D component for a vital machine in his local business (on an affordable tablet, of course), and then hauling over to a local print shop to make his idea exist in real life. crraaaaaaaaazy future stuff

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Tons of fun stuff here. Even if most of it is wrong (which, by virtue of predictions, is likely correct) at least one or two of these things can have a major impact. McKinsey's 12 technologies:

Mobile Internet

Automation of knowledge work

Internet of things

Cloud

Advanced robotics

Autonomous and near-autonomous vehicles

Next generation genomics

Energy storage

3-D printings

Advanced materials

Advanced oil and gas exploration and recovery

Renewable energy

And then other cool stuff on the radar includes advanced water purification, quantum computing, flexible displays, and LEDs.

Not only are these plenty exciting individually, but their potential interactions are also fascinating. Energy storage and renewable energy is obvious, but what about mobile internet and almost anything else on the list? Design an object and send it to print at your local staples while on the go? Robots that pull information off the cloud and use advance materials to drill for oil? Well, the last one might be a bit of a stretch, but anything can happen.

Aside from mobile computing (the obvious choice for #1), I think they do a good job ranking these things in terms of importance. In terms of developed economies, automation of knowledge work will be huge...in terms of increased productivity and destroying jobs. It will be especially interesting to see how this interacts with robotics. We're probably a long ways off before we hit a Philip K Dickian dystopia, but it doesn't take much brain power to stock shelves at Walmart. This idea has been on my radar for quite some time: Which jobs will become easily and cheaply automated, and which will never become automated?

Internet of things is also a fun one. This, combined with mobile computing and robotics will be crazy. It isn't a very far reach that one day we will never really be "off" the internet. Especially if flexible displays and google-glass type stuff really starts to take off. 

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I like this Quandl thing. Don't know how long they'll stay up before they hit restrictions, though.

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Most expensive category: Industrial Metals (cheapest ETF -- 65bps)

Least expensive category: All Cap Equity (cheapest ETF -- 4bps)

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The big happy chart of currency regimes

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As BTC breaks $100 (USD), people are suddenly interested in it again. 

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Emerging markets, and interest rates, and and asset-allocation returns, oh my!

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This guy is an idiot. But still, it's a fascinating idea. Some guy on an airplane told me about a book called The Unincorporated Man.

It seems like something like this might work if the guy didn't give his shareholders say over every little decision. You didn't see Steve Jobs asking for shareholder approval of every little Apple project. In fact, part of the appeal of the company came in its mystery. 

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Barring a civilization-ending event, technology is not going to move backward. More and more of our world will be controlled by software. It’s already become so ubiquitous that, argues one of my colleagues, it’s now ridiculous to call some firms as “tech” companies when all companies depend on it so much.

So how do we deal with this trend? The possible solutions to the problems of disruption by thinking machines are beyond the scope of this piece. As I’ve mentioned in other pieces published at Quartz, there are plenty of optimists ready to declare that the rise of the machines will ultimately enable higher standards of living, or at least forms of unemployment as foreign to us as “big data scientist” would be to a scribe of the 17th century.

But that’s only as long as you’re one of the ones telling machines what to do, not being told by them. And that will require self-teaching, creativity, entrepreneurialism and other traits that may or may not be latent in children, as well as retraining adults who aspire to middle class living. For now, sadly, your safest bet is to be a technologist and/or own capital, and use all this automation to grab a bigger-than-ever share of a pie that continues to expand.

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Are small-cap premiums justified? Maybe. Large companies are fragile. Large cities are antifragile.

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So THAT's why they're so expensive: 40% profit margins. 

On one hand, it's hard to see a physical notebook company really taking off in a digital economy. On the other hand, this is one of the best physical media companies around. The article (and the moleskin filing) are 100% correct in identifying their market. They aren't selling notebooks...they're selling people an identity.

If anything, the digital age can probably help them through more effective advertising. Social media and digital marketing are specifically geared towards selling niche products like this. 

The article estimates that the company likely has a global audience of about 300 million, and is selling products to 1.5% of them. It wouldn't shock me to see that 300 million number fall drastically in the future, but also see them sell to a much larger percentage of it. 

It's slated to IPO at a P/E of between 22 and 29. Might be a good long-term play if they can get their digital marketing act together.

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Very interesting. I was under the impression that most games, either ended in a near-50-50 split, or one party rejected the offer. But apparently (and this shows how behind I am on the literature) some 1995 study offers conflicting evidence, and several follow-up studies offer more conflicting evidence.

Can't say I'm entirely surprised. The more I learn about the brain, the more I realize how plastic it is. I always wondered what would happen if they tried to pull some of those behavioral finance tests on seasoned trading and investing pros. 

In any case, I'm sure the article's conclusion would make even David Graeber proud:

"

Because Machiguengan culture had a different history, their gut feeling about what was fair was distinctly their own. In the small-scale societies with a strong culture of gift-giving, yet another conception of fairness prevailed. There, generous financial offers were turned down because people’s minds had been shaped by a cultural norm that taught them that the acceptance of generous gifts brought burdensome obligations. Our economies hadn’t been shaped by our sense of fairness; it was the other way around."

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Good website for idea generation.