Food: US$5 coffee treat
The Nespresso machine in the office is actually pretty good. Still, every now and then I treat myself to a barista made coffee. The smell of the fresh coffee beans, the look of the milk pattern at the surface of the drink and the feel of the ceramic cup are part of the package. For this morning’s treat, the bonus is the teaspoon that had paw prints all over its handle.
Love: Developmental milestones for 18-year-olds
Julie Lythcott-Haims identified a checklist of 8 developmental milestones an 18-year old should be able to do:
- Talk to strangers;
- Find his or her way around campus;
- Manage assignments, workload and deadlines;
- Contribute to running a household;
- Handle interpersonal problems;
- Cope with ups and downs of life;
- Earn and manage money
- Take risks, and learn grit (trying and failing and trying again) and resilience (thick skin)
The author further advocated orphans as role models. For real-life orphans, she quoted Malcolm Gladwell who cited Obama, Clinton, Sotomayer and De Blasio as “eminent orphans”. For fictional orphans, she mentioned Harry Potter, Oliver Twist and Jane Eyre.
I would add to the fictional list Heidi. The lass definitely checks the above milestones, even at age five. I am watching a serialized animation of the story on YouTube with my daughter. It is very well made and the quality of the videos is great even on TV. In one of the episodes, Heidi even managed to exchange a fossil for a loaf of bread to give to Peter’s grandmother – that’s #7 checked.
Growth: Pronoia vs random universe
Thanks to Khe Hy for the reference to Kevin Kelly’s 68 bits of unsolicited advice on turning 68 years old last week.
The word that struck me most was “pronoia”, which essentially describes a state of mind in which a person thinks the world around them conspires to do them good. This chimes with Romans 8:28 “God causes all things to work together for good to those who love God”.
During the same week, I also chanced upon the 2020 March edition of Psychology Today. The leading article, Coming to Terms with Coincidence, advocated the opposite of pronoia (and paranoia), that the world is fundamentally random, and that coming to terms with it can be liberating and empowering. Importantly, the article also acknowledged that “The universe may not be purposeful, but humans are. Purpose and meaning emerged in the universe with life itself.”
As a human being, I seek purpose and meaning. I find a belief system essential in guiding me in this journey in a messy world. Hence I choose pronoia.
Investment: A view of how private equity works
I had worked in companies that invests in alternative assets, including private equities funds. Prior to reading Matt Stoller’s article, embarrassingly, I had not come across the Akerlof-Romer paper he cited. In any case, the Stoller made some very convincing arguments that the private equity game is coming to a head.
Thinking back to the pitches I had seen from the various GPs, however, I could not square some facts:
- Amount of dry powder: At the end of 2019, the industry had US$1.5 trillion dry powder, compared with world GDP of US$89 trillion. That would place it #13 in the list of countries with largest GDP in 2019, displacing Spain and Australia. There are a lot of moves that are possible with this stash;
- Friends in connected places: this was mentioned in the article, e.g. Robert Rubin was a central figure in the last three bailouts mentioned. There are many more politically connected figures in the larger firms such as Carlyle, KKR, Apollo and Bain. To those who had worked their lives to be part of the charmed inner circle of money and power, I can only imagine that the level of effort they would take to maintain status quo is even stronger than Dragi’s “whatever it takes”. Witness the debate on tax treatment of carried interest – more than a decade after GFC, nothing much has changed;
- The number of employees in “hostage”: the best negotiating chip the industry has with governments all over the world is the number of employees in its portfolio companies. Carlyle alone boasts 900,000 employees in its portfolio companies across six continents. If things don’t go their way, the lives of 900,000 people will be dislocated.
To assuage the public that things are mending, there might be a sacrificial lamb or two. Think of this as a PE equivalent of Lehman Brothers. Otherwise, once this episode is over, I would think the PE industry would be in an even stronger position than now. Increasing power will be concentrated at the hands of a decreasing few. Disentangling this would be a task no lesser than that of de-sinicization.
Awe: Black holes dance
Another week another daisy-petal pattern, this time traced by a black hole orbiting another larger black hole. The video shows the flash of light as the smaller black hole crashes through the enormous disk of gas surrounding the larger black hole, and reminds me of the space jumps I see in movies.
