Lauren Rublin: "few see a deep or lengthy recession in 2023"

[F]ew see a deep or lengthy recession in 2023. 

~ Lauren R. Rublin, moderator of the 2023 Barron's Roundtable, January 9, 2023

Roundtable participants:

If we have a recession, it will be mild.

~ David Giroux, CIO, T. Rowe Price Investment Management

The magic money tree is over.  That and a global energy shock will likely lead to a modest global recession.

~ William Priest, co-CIO, Epoch Investment Partners

If the Fed stays on course on rate hikes, we are going to have a recession.

~ Scott Black, founder, Delphi Management

My assumption is that there won't be a recession, even though we could have two quarters of disappointing GDP.  But any downturn will be brief, so I am assuming no recession.

~ Abby Joseph Cohen, Professor of Business, Graduate School of Business, Columbia University

January 16, 2023

Peter Zeihan on China: "they are going away"

There's no version of this where China comes through looking good.  And the challenge for the rest of us is to figure out figure out "how do we, in as smooth and quick as a process as possible, figure out how we can get along without them?"  Because they are going away.  And they're going away this decade, for certain.

~ Peter Zeihan, interview with Joe Rogan, The Joe Rogan Experience, January 7, 2023

My comment: 

The big reveal with Peter Zeihan is that he has an agenda: decouple with China.  If you press him on this, I'm pretty sure he welcomes US government policy to expedite the process.  There are several problems with this line of reasoning: 

1) If Zeihan is correct, the decoupling will happen naturally. 

2) Trade is mutually beneficial, i.e. cutting off the second largest economy in the world will inflict massive pain on the US economy, not just China's. 

3) Interfering in trade leads to conflict. 

I'm not suggesting China doesn't have its flaws (as do we), but if Zeihan actually cared about the Chinese people, he would encourage diplomacy and trade, not vilification and ostracism.

James Clear on writing a bestselling book

Write something timeless, write something universal, write something that fascinates you.  And do all of that with the intention of creating something genuinely remarkable, or that creates value for people.

~ James Clear, author of Atomic Habits, podcast interview, The Tim Ferris Show, 1:23:35 mark, January 4, 2023

Modern MBA: Airbnb is losing its competitive edge to hotels

While Airbnb continues to outperform the hotel industry in terms of scale and listings, the challenge the tech company faces today is the realization that quantity is not quality.  Safety issues, service inconsistency, guest volatility, intrusive hosts, privacy concerns and excessive policies have resulted in Airbnb travelers feeling more like burdens than guests to their hosts these days.  On the flipside, regulation has also caught up.  With mandatory city fees, licensing and permit costs now factored into each booking, Airbnb can no longer use the tagline that they're cheaper or more unique than a hotel when they're already being taxed like one.  And since affordability was a major driving force behind the company's early popularity, it's an open question mark as to how Airbnb will navigate these choppy waters ahead.  When the playing ground becomes level and price becomes equal across hotels and Airbnbs, service will inevitably become a competitive advantage.  The reliability, predictability and consistency in guest experience is really where hotels have continued to edge out Airbnb across business and leisure travel for the past several decades and why the industry as a whole doesn't think of Airbnb as a threat.

~ Modern MBA, "Why Airbnb Fails to Disrupt the Hotel Industry," 24:30 mark, YouTube, April 9, 2022

Charlie Munger on personality types to avoid

Crooks, crazies, egomaniacs, people full of resentment, people full of self-pity, people who feel like victims, there's a lot of things that aren't going to work for you.  Figure out what they are, then avoid them like the plague.

~ Charlie Munger

Eric Savitz on the costs of electric vehicles

As the electric-vehicle market grows, cracks are emerging in the sector’s business model.  Stellantis (STLA) CEO Carlos Tavares noted that it costs legacy car makers about 40% more, on average, to build an EV than a comparable gas-powered car.  He says auto makers are in the untenable position of either passing along those costs, resulting in high-price vehicles that won’t generate a mass market, or eating the additional outlays and hurting profitability.  He says that companies must find ways to absorb the extra costs while protecting margins and not pricing at levels unaffordable to the middle-class car buyer.  And they have to do that, he adds, while navigating through sharp swings in battery-related commodity prices.

~ Eric J. Savitz, "CES Returns With a Bang. The Optimism? Not So Much.," Barron's, January 7, 2022

Barron's: Semiconductors made in the US cost 50% more than those made in Asia

Morris Chang, the founder of Taiwan Semiconductor Manufacturing, has said the U.S. government’s push for domestic semiconductor manufacturing won’t be cheap for consumers, even after TSMC spends billions of dollars on new plants in Arizona. 

Chang has said that factories in the U.S. won’t be cost competitive with the firm’s Taiwan fabrication plants, or fabs. Chips currently made at the company’s Oregon site cost 50% more than the same semiconductors made in Asia, Chang said during an interview last year at the Brookings Institution.

~ Tae Kim, "Tech's Bill is Coming Due. We'll All Pay.," Barron's, January 7, 2023