Macro & Economics
Capital Cycle
Nvidia and the semiconductor sector are a classic capital-cycle story: demand creates too much supply, and a boom leads to a bust.
Law of Large Numbers
The larger they get, the more important the law of large numbers will become, as they are limited by the size of their markets.
Deflationary Force (AI as)
The productivity of software engineers will go up a lot. This is a deflationary force — and one that will displace a lot of jobs.
Vendor Financing
The vendor essentially co-signs loans for customers lacking investment-grade ratings. Nvidia is in discussions to guarantee roughly $250 billion in lease and debt financing for an OpenAI data center campus.
Special Purpose Vehicles (SPVs)
Large portions are being packaged into special purpose vehicles (SPVs) — opaque investments that regulators struggle to value, sold to pension funds, private investors, and insurance companies.
Liz Truss Moment
Every day we are getting closer to a 'Liz Truss moment.' She announced a highly inflationary 'pro-growth' budget. The UK bond market responded with a 'mini-crash,' while the stock market experienced a much bigger decline.
Developed Markets Premium
In the past, developed markets traded at a premium to emerging markets; we had a stable political system, a stable and more diverse economy. That premium was earned, not given. And it is quietly eroding.
Nonlinearity
Nonlinear means that when you double the dose of, say, a medication, or when you double the number of employees in a factory, you don't get twice the initial effect, but rather a lot more or a lot less.
Economic Growth Formula
You can explain economic growth with a simple formula: growth in the employed population plus productivity growth.
Complex Systems
Complex systems are full of interdependencies — hard to detect — and nonlinear responses.
