Podcast
E57: Understanding Omicron, tech stocks plummet, VC's great resignation, Jack Dorsey's departure
- The speakers plan to eliminate future podcast hiatuses by implementing a permanent "no weeks off rule."
- The Omicron variant is anticipated to be a "major upgrade" with 30 spike protein mutations, making it a "completely fucking nothing burger" regarding severity but highly transmissible, with a likely R0 range of 7 to 20 and estimates as high as 40.
- Hospitalization trends for the variant are expected to be determined within the "next two weeks" to assess if severe cases spike, despite predictions that no policy measure can stop the variant's rapid spread.
- Policymakers are expected to respond to public hysteria with lockdowns adverse to the economy, though there is hope that bans on reopening schools will not be enacted; however, such measures are predicted to be a "disaster for the economy."
- The pandemic is predicted to become a "seasonal disease" similar to the flu that is unlikely to be eradicated, with vaccines and booster shots identified as the only effective countermeasures.
- The stock market is expected to continue re-rating high-multiple companies like Snowflake and Peloton, causing their valuations to shrink due to interest rate hikes forcing a discount of future revenue from a 10-year horizon down to a "three-year or five-year horizon."
- Private businesses planning IPOs in the "next 12 to 18 months" are in a "challenging spot" due to compressed public market multiples.
- Inflation is expected to persist for "a few years" due to structural under-investment in infrastructure and supply chains, with distortions expected to fully pass through to consumers by "2022."
- A "decade" involving "trillions of dollars" is required to fix structural inflation through decentralized supply chain investments in rare earths and materials.
- Freight rates and lumber prices, which peaked in September, are expected to "continue to drop week after week" as supply chains balance out, while structural worker shortages caused by the loss of 2.1 million immigrants during the Trump tenure are expected to force wages to "only go up."
- A change to the US conforming mortgage formula in January is predicted to allow homeowners to pull more equity, creating an "impetus to spend."
- The current market volatility is expected to result in a "violent snap back" similar to the 2018 recovery, though it remains "too early to tell" if the current situation is merely short-term.
- Smart market participants are predicted to continue selling stock or "trimming positions" as a de-risking strategy, while the statistical likelihood of replicating the massive returns of the last decade is expected to be "very low" for successful venture capitalists.
- A "second act" phenomenon is expected where successful VCs shift focus to "climate change solutions" and other meaningful causes after taking time off, with "deep physical science and R&D" business models remaining a "great bet" for long-dated cash flow.
- The tech community's presence in Miami is expected to continue a trend of taking over esoteric events, now being called "NFT Basel," while a shift in Twitter's leadership is expected to result in "even greater censorship" and a slide away from First Amendment principles.
- If Twitter restricts user-generated content involving public figures without consent, it is expected to eliminate democratization and serve as a "real big boon" for TikTok.
- "Learning loss" policies and union arrogance are expected to result in increased political backlash, citing the elections of Glenn Youngkin and Eric Adams as examples.
- Mike Bloomberg's $750 million donation is anticipated to create a network of 150,000 kids in charter schools over the "next four or five years."