The Rational Cloning: Weekly Ideas #83

Tweets/Ideas That Make You Go… Hmm 🤔

Welcome to the 83rd edition of the Rational Cloning Newsletter (Weekly Ideas Series).

Helping you discover the best ideas of others.

Happy cloning.

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Tweets/Ideas That Make You Go… Hmm 🤔

• Conclusion of Druckenmiller’s latest speech on our entitlements, our spending, the debt and the Fed.

  • Stan talks, I listen.

• 'We're going to have a 'non-recession' recession' Apollo CEO via CNBC

• 'In recent years, commodity prices have reached a 50-year low relative to overall equity markets. Historically, lows in the ratio have corresponded with the beginning of new commodity supercycles.'

• I always found this thought provoking and inspirational. Worth re-reading every few years, I think, even if you're well into your career, and even if you're not an entrepreneur.

• I considered moving out of the USA. After some research, I realized leaving is stupid. There is no chance the USA will stop being the global superpower. And the best country for opportunity. The reason surprised me:

• This was a really good conversation with Stephen Schwarzman. Paraphrased: "The best deals we did required the fewest meetings and had the least disagreements"

• FinTwit loves good annual letters. I think the $FRPH management writes a pretty good one. Short and to the point.

• Human civilization runs on fossil fuels. We wouldn't have a food supply without them. Most of humanity would be dead. I'm more concerned about running out of them than anything else. It's real weird to me that people think we can just stop using them like it's no big deal.

• The Great Simplification: Joseph Tainter Transcript

  • The human strategy for perhaps the last 5,000 years at least are the strategy among much of the human earth has been to grow in complexity and to solve problems, to grow in complexity and to solve problems that way. I realized that to understand why societies collapse, which is to say why they suddenly lose complexity was just the flip side of understanding how and why they increase in complexity. The ideas that I developed have to do or apply both to increase in complexity and also to collapse.

  • So complexity as I approach it has two dimensions, what I call structure and organization. The structure of a society and the organization of a society. The structure of a society is all the parts and bits and things that go to make it up. Those can be social roles, positions, technologies, aspects of our economy, aspects of our way of life.

  • Energy and complexity spiral together. As one increases, the other increases. As energy increases, complexity increases and then as complexity increases, energy has to increase also. This is what I mean by the energy complexity spiral.

  • It takes energy to get energy. What matters is how much you get for what you put in. Now, this is referred to by variety of terms. It's referred to as energy gain. It's also referred to as energy return on investment or energy return on energy invested. That's usually given by the acronym EROI, E-R-O-I. It sounds like something out of archaic Greek, but in fact, it refers to the situation we're facing today.

  • In 1940, we produced oil and gas in the United States at an EROI of 100:1. For every barrel of oil we'd invest in finding and producing oil, we got a 100 barrels back. Today, that's now down to 15:1 and the trend is not reversible.

  • A rapid simplification is my definition of collapse. That a collapse is the rapid loss of a level of complexity, an established level of complexity. That's the language that I used when I published the collapse book in '88. I didn't use the term simplification in that, but I could have, because a rapid simplification and a rapid collapse are the same thing. A collapse is a loss of an established level of complexity, a rapid loss of an established level of complexity.

• CREDIT BUBBLE STOCKS (Earnings Roundup - Q1 2023): “We'll go into more detail on some of these later, but posting some highlights:”

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Check out previous issues of Weekly Ideas👇 

• The Rational Cloning: Weekly Ideas #82

• The Rational Cloning: Weekly Ideas #81

• The Rational Cloning: Weekly Ideas #80

• The Rational Cloning: Weekly Ideas #79

• The Rational Cloning: Weekly Ideas #78

The Rational Cloner’s Library

• The 2023 Game Plan

• Table of Contents

• Fertilizers

• Royalty Companies

• Tobacco

• Black Stone Minerals (BSM)

• Mosaic Musings #1: Tin [Molecule Crisis Series]

• Mosaic Musings #2: Disinflation → Inflation Inflection Point?

• Mosaic Musings #3: Royalty Companies: Inflation, I win; Disinflation, I Don’t Lose Much.

Authored Books

• Nick and Zak's Adventures in Capitalism: Words of Wisdom from the Nomad Partnership Letters

• The Little Book of Investing Ideas: A Curated Collection of Investing Wisdom