The Digest #105

Published on March 6, 2022

“Never, never, never believe any war will be smooth and easy, or that any one who embarks on that strange voyage can measure the tides and hurricanes he will encounter. The Statesman who yields to war fever must realise that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events.”

— Winston Churchill


I Had A Funny Feeling in My Gut by David Hoffman, February 10, 1999. I have been thinking about the risk of nuclear war in recent days due to Russia’s invasion of Ukraine and the possibility of an expansion of the war that might draw in NATO countries. It is almost a miracle that the world has avoided nuclear war over the past eight decades, despite many close calls. One of the close calls was on September 26, 1983 when Stanislav Petrov, an officer of the Soviet Air Defense Forces, almost certainly saved the world from nuclear war. “I had a funny feeling in my gut,” Petrov said. “I didn’t want to make a mistake. I made a decision, and that was it.” (Washington Post)

Waging War by Other Means: Juan Zarate Explains the New Sanctions on Russia by Richard Hurowitz, March 4, 2022. Juan Zarate is a former United States treasury official who was involved in dismantling terrorist financing after the September 11 attacks. In this interview, Zarate assesses the unprecedented sanctions on Russia: “In the past, we’ve designed sanctions to squeeze more tightly over time and in different ways in different sectors. That’s not what’s happened here. This is more of a shock-and-awe approach, again with the oil and gas sector being left out. Ordinarily I’d say it’s going to take four to six months to see the effects, to see reserves fall, to see the currency drop. But in this case, a lot of that’s going to happen right away.” (Octavian Report)

Economic Sieges, Warfare & Markets by Jamie Catherwood, March 6, 2022. Over the past eight years, Vladimir Putin restructured Russia’s foreign reserves in a way that he hoped would be resilient during times of war. However, he probably did not count on access to his reserves being cut off. “In the past, armies surrounded fortified cities to block their access to food and necessities. Today, global leaders can turn off Russia’s access to important networks and funding sources. In either era, the most damaging sieges are inflicted when the victims have little-to-no idea that they are imminent, which means that they do not build up a stockpile of food and supplies in advance. The siege will be bad either way, but the opportunity to accumulate supplies beforehand helps matters.” (Investor Amnesia)

How Paper Money Saved the Union by Roger Lowenstein, March 4, 2022. This is an essay adapted from Ways and Means: Lincoln and His Cabinet and the Financing of the Civil Wara new book coming out on March 8. Both the Union and the Confederacy printed fiat currency to fund the Civil War, but the Union used far more restraint and suffered less inflation as a result. “One lesson of the original greenbacks was that, because their issue was held to reasonable limits (one-sixth of the war debt), they proved a boon to America’s credit and to the exercise in nation-making that was Lincoln’s ultimate purpose. They gave Americans their own money and were essential to winning the war.” (WSJ)

Positive Asymmetry, March 6, 2022. A brief article on how adopting a high-trust approach in life can result in positive asymmetry: “Positive asymmetry happens when you have a lot of upside and little downside. Negative asymmetry is when you have little upside and high downside. Finding hidden or overlooked asymmetry is the key to an unstoppable advantage. And there is a lot of it hiding in plain sight.” (Farnam Street)

The Paradox of Trust, October 31, 2019. While I generally agree that trusting people by default is the best approach, society should strive to put in place systems that avoid tempting people into adopting dishonest behavior. One example is the invention of the cash register, a device that reduced the temptation of clerks to steal. Ultimately, we all want to build relationships that embody the concept of a “seamless web of deserved trust” that Charlie Munger has often talked about. (The Rational Walk)

Matt Mullenweg, the CEO shaping the future of the internet by Polina Pompliano, March 2, 2022. It is no exaggeration to say that WordPress revolutionized the internet by making it possible for anyone to start a blog. Matt Mullenweg co-founded the organization that released WordPress in 2003. He is now the CEO of Automattic, the company that oversees WordPress. This is a fascinating profile of the man behind one of the most important software platforms of the internet era. (The Profile)

Surprise, Shock, and Uncertainty by Morgan Housel, March 3, 2022. “What Covid-19 and the Ukrainian invasion have in common is that both have happened many times before but westerners considered them relics of history that wouldn’t resurface in their own modern lives. Maybe the common lesson is that there are difficult parts of humanity that can’t be outgrown.” (Collaborative Fund)

Life Is Up To You: 8 Choices That Will Make Your Life Better by Ryan Holiday, March 2, 2022. “Jump into the colder pool. Walk instead of drive. Pick up the book instead of your phone. Take responsibility instead of hoping it goes unnoticed. It matters big and small, courage is choosing the more difficult option. Make it a habit. Iron sharpens iron, after all. You’ll be better for it—not only for the improvement that comes from the challenge itself, but for the willpower you are developing by choosing that option on purpose.” (

Coping With Market Meltdowns II, March 9, 2020. I wrote this article during the gloom of early March 2020 when the world realized that the coronavirus was not going away. It was a follow-up to an article on coping with market meltdowns that I wrote in early 2009. I’m hoping not to write a third installment. (The Rational Walk)


When Markets Trade on Headlines Rather Than Value, March 6, 2022. This was a good discussion primarily regarding market reaction to the war in Ukraine, among other related topics. “In this episode, co-hosts Elliot Turner, Phil Ordway, and John Mihaljevic discuss (i) times when markets trade on headlines rather than value; and (ii) “safe” assets amidst all the chaos in the world.” (This Week in Intelligent Investing)

The History of Bubbles, Mania & Fraud w/Jamie Catherwood, March 3, 2022. This is an interview of Jamie Catherwood, author of the Investor Amnesia website. Jamie’s articles remind us on a weekly basis that many of the supposedly “unprecedented developments” we see in markets, and the world more generally, rhyme pretty strongly with things that have happened before, sometimes long ago. (We Study Billionaires)

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The Digest #105