The Digest #73

Published on March 19, 2021

“Over the course of my career, there have been a handful of times when I felt the logic for calling a top (or bottom) was compelling and the probability of success was high. This isn’t one of them. There’s increasing mention of a possible bubble based on concerns about valuations, federal government spending, inflation and interest rates, but I see too many positives for the answer to be black-or-white.”

— Howard Marks, 2020 in Review, March 4, 2021

Market design to accelerate COVID-19 vaccine supply, March 12, 2021. The benefits of accelerating vaccine capacity far outweigh the costs according to an article in the journal Science: “We estimate below that installed capacity for 3 billion annual vaccine courses has a global benefit of $17.4 trillion, over $5800 per course. Investing now in expanding capacity for an additional annual 1 billion courses could accelerate completion of widespread immunization by over 4 months, providing additional global benefits of $576 to $989 per course. This dwarfs prices of $6 to $40 per course seen in deals with vaccine producers, indicating the wide gap between social and commercial incentives.” (American Association for the Advancement of Science)

Major Changes Ahead for the Affordable Care Act, March 15, 2021. The American Rescue Plan Act of 2021 was ostensibly a pandemic relief bill, but it contains numerous changes to the Affordable Care Act that dramatically enhance benefits for those who purchase healthcare on the government exchange. This article outlines several of the most important changes which include elimination of the subsidy “cliff” and far more generous premium subsidies. The changes are limited to 2021 and 2022 but there will be pressure to make them permanent. Anyone who uses the ACA exchanges to purchase health insurance should definitely read this article which summarizes the important changes. (Kaiser Family Foundation)

Dopamine, Smartphones & You: A battle for your time by Trevor Haynes, May 1, 2018. Technology can be addictive. This is no accident. The technology industry has long been familiar with the underlying principles of human psychology that drive addiction and purposely tailor their products to build habits. This is especially pernicious when it comes to children and technology, a phenomenon that has been accentuated during the pandemic. “I feel tremendous guilt,” admitted Chamath Palihapitiya, former Vice President of User Growth at Facebook, to an audience of Stanford students. He was responding to a question about his involvement in exploiting consumer behavior. “The short-term, dopamine-driven feedback loops that we have created are destroying how society works.” (Harvard University)

Reverse Wealth Transfer on Steroids by Joshua M. Brown, March 16, 2021. It needed to be said: “Stop funding other people’s SPAC launches. They don’t love you back. This is a reverse wealth transfer. The sponsor – already a billionaire or a hundred-millionaire – ends up with 20 percent of the company that the SPAC acquires and all sorts of related fees paid to them. You, on the other hand, end up with a stock that went up and then went back down in almost all cases, with a few notable exceptions. You are supplying them with the means to take over companies at a cost outlay of effectively zero.” (The Reformed Broker)

Chris Bloomstran on Warren Buffett and Berkshire, March 15, 2021. In a newsletter a few weeks ago, I included a link to Christopher Bloomstran’s annual letter to Semper Augustus clients which includes an extensive discussion regarding Berkshire Hathaway. In this podcast interview with Tobias Carlisle, Bloomstran expands on many of the topics covered in his letter and also comments on the Berkshire Hathaway 2020 annual report. (The Acquirers Podcast)

A collection of all my episodes on happiness by Naval Ravikant, March 12, 2021. “Even smart, critical thinkers go along with many of society’s truths, knowing deep down they are lies. Here’s a simple example: “Money won’t make you happy” is a social truth, but it’s not an individual truth. Look at all the individuals trying to make money. They know money can remove a lot of sources of unhappiness and get them to a point where happiness is under their control. It becomes their choice, as opposed to being inflicted upon them by external forces. That is just one of many lies society tells you.” (

Holding Competing Ideas at Once | Porting Models Across Investments, March 13, 2021. “In this episode, John Mihaljevic co-hosts a discussion of (1) the ability to hold two competing ideas at once, led by Phil Ordway; and (2) porting mental models and concepts from one investment to the next, led by Elliot Turner.” (This Week in Intelligent Investing)

The OODA Loop: How Fighter Pilots Make Fast and Accurate Decisions, March 15, 2021. The military has developed several mental models that have literally been tested in the line of fire. Some of these mental models have applications beyond military life. “One such military mental model is the OODA Loop. Developed by strategist and U.S. Air Force Colonel John Boyd, the OODA Loop is a practical concept designed to function as the foundation of rational thinking in confusing or chaotic situations. “OODA” stands for “Observe, Orient, Decide, and Act.” (Farnam Street)

Retail Investors Lose Consistently When They Actively Trade their Own Account by Pam Martens and Russ Martens, March 18, 2021. Individual investors routinely squander their only real edge over institutions when they attempt to actively trade their accounts. This article reports on an exchange that took place during a House financial services committee hearing on March 17. An excerpt: “It’s like saying let’s send the local Little League team up against the New York Yankees or the Boston Red Sox or the LA Dodgers. Frankly, you have these institutions that have maximum informational advantage, maximum technological advantage, maximum sophistication. They get to use all of that they have paid billions for, for the purpose of extracting wealth.” (Wall Street on Parade)

The Death of Seneca

Lucius Domitius Ahenobarbus, later known as Emperor Nero, was only twelve years old when he was adopted by Roman Emperor Claudius in 49 AD. To prepare the boy for public life, the stoic philosopher Seneca was enlisted as his tutor. 

Seneca diligently educated the young man, helped him prepare for his first public speech in the Senate, and is credited with many of Nero’s administrative successes during the early years of his reign which started in 54 AD. 

Unfortunately, Nero ended up casting aside Seneca’s stoic virtues and soon became a tyrant. Nero eventually suspected Seneca of plotting against him in 65 AD and ordered him to commit suicide, an event recounted by Barry Strauss in his book, Ten Caesars:

The most famous casualty of Nero’s counterattack on the conspirators was his former mentor, Seneca. Although he was probably not guilty, Seneca was ordered to commit suicide. He slit his wrists, choosing the common Roman manner of killing oneself, but the bleeding was slow and painful. Finally, after an extended audience with friends, Seneca suffocated himself in the steam of a hot bath. …

Seneca had one thing in common with the conspirators: like almost all of them, he was a follower of Stoic philosophy. A centuries-old Greek philosophical school, Stoicism became the favored philosophy of the Roman elite. It was pragmatic and public spirited while also consistent with old-fashioned Roman values. The Stoics emphasized the four cardinal virtues of justice, courage, temperance, and practical wisdom. Stoics taught austerity and self-control. Since Romans traditionally prided themselves on seriousness, simplicity, and strictness, since they valued public service and practical wisdom, and since they prized honor and pursued courage, they found Stoicism compatible.

For an article inspired by Seneca, I recommend Cultivating the State of Flow.

The Death of Seneca, Peter Paul Rubens, 1615

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The Digest #73