34: The Dollar, Google Firing Protesters

Welcome to the Sunday Edition! Let's get into markets, economy, and more.

What's New

I'm learning and writing about Fastenal. If you have any tidbits or interesting books or articles about Fastenal, please let me know.

Quote of the week

"The possibilities that lie in the future are infinite. When I say ‘It is our duty to remain optimists,’ this includes not only the openness of the future but also that which all of us contribute to it by everything we do: we are all responsible for what the future holds in store. Thus it is our duty, not to prophesy evil but, rather, to fight for a better world."

Karl Popper, The Myth of the Framework

It's a mistake to think that investing doesn't apply here. I was speaking with a friend this past week about investing and the opportunities it unlocks if done correctly for a long time. This becomes even more apparent when legacy planning.

Markets

What a week! I hope you all stayed calm and didn't lose your head.

It's important to remember here that the market routinely goes through corrections of 5-10%. It's also great to remember that nobody knows what the market will do tomorrow. The below chart reminds me that holding cash is, most often, a drag on the portfolio. I've held ~10% cash or cash equivalent (FLOT ETF) for a while and it's 'burning a hole in my pocket.'

The index is now well below the 50DMA and approaching the 200DMA. This doesn't signal whether we are in a bear market or bull market, it just signals what happened in the past. Likewise, extrapolating what will happen tomorrow is a waste.

I spoke with someone recently who completely exited the market almost a year ago trying to time the market, convinced a crash was coming. He missed out on ~30% returns (depending on the portfolio of course). It pays greatly to stay calm.

Economy

The Dollar

The dollar remains strong relative to the rest of the world and adjusted for inflation. There's always a ton of news on the weakening of the dollar, but when we look at the last ten years, things are more than fine (for the dollar):

I'm not worried about the dollar right now.

Unemployment

The unemployment rate is comfortably low:

The unemployment rate is nice to see on a long-term basis so that we can see exactly how people are working. The economy feels like it's primed for another disaster, but that could be my own paranoia (it probably is). I have nothing to base this off of, and neither does anyone else.

Sectors

Information technology took such a hit this week, yet remains king over the 5y range:

Internet Gems

Google Gets Serious

I couldn't be more excited for this, but Google and Sundar seem to be fed up with the current state of how they're viewed as lackadaisical. Building for our AI future (blog.google)

This may seem trivial, but I think it points to the current market sentiment of "get to work." There is little to no room for activities that do not directly contribute to business success.

From the blog:

One final note: All of the changes referenced above will help us work with greater focus and clarity towards our mission. However, we also need to be more focused in how we work, collaborate, discuss and even disagree. We have a culture of vibrant, open discussion that enables us to create amazing products and turn great ideas into action. That's important to preserve. But ultimately, we are a workplace, and our policies and expectations are clear: this is a business, and not a place to act in a way that disrupts coworkers or makes them feel unsafe, to attempt to use the company as a personal platform, or to fight over disruptive issues or debate politics. This is too important a moment as a company for us to be distracted.

We have a duty to be an objective and trusted provider of information that serves all of our users globally. When we come to work, our goal is to organize the world’s information and make it universally accessible and useful. That supersedes everything else and I expect us to act with a focus that reflects that. 

Here is a picture from inside Google of the protest, and some of the employees that were fired:

Robert Greene and Andrew Huberman

I'm not a huge fan of Huberman, but Robert Greene is a gem of a thinker. He was recently interviewed by Huberman. I rarely listen to postcasts or watch youtube videos. I made an exception here and I'm very glad I did.

The title is misleading, as Greene and Huberman talk about life more than anything.

Portfolio

Here are the current portfolio holdings by weight and some performance numbers: