Financial portfolio theory has the idea that owning too much of a particular stock is bad as it exposes you to greater company-specific risk, which unlike systemic risk is not generally compensated for by higher returns (assuming investors are demanding proper risk premiums etc.) This leaves room for a particular kind of human error: you have to sell things which are doing well, as they come to represent a greater proportion of your portfolio that is optimal. This is emotionally difficult. 

How do you compete with AWS? Even if you set your sights a little lower in the cloud infrastructure space, does Azure, Google Cloud Platform or Aliyun look much easier? These are big companies with a lot of money, a lot of engineers and a lot of infrastructure. They also have a suite of existing cloud services, letting them act as a “one stop shop” for customers.

There is an ad running in San Francisco that quoted the New York Times, which I think is quoting an old Department of Labor study, to say in 2020 there will be 1.4m new programming jobs in the US and only 400k new trained people to fill them.

One of the common “China is ahead of the rest of the world” stats is the percentage of mobile payments in China versus everywhere else. Like much about the PRC, assuming that signals a future direction of mobile payments in the rest-of-the-world is oversimplified. Doesn’t mean that it’s s wrong, but getting the story right is important if you want to think about the diffusion of other technologies. 

Following up on the post the other day, I have been reading some articles by economist Genda Yūji. His article from last year on the lack of wage increases despite tight labor markets is insightful. The whole thing is worth a look, but in terms of the training discussion going on in the US, I thought this historical view was interesting:

Wonderful quote from Howard Marks’ Mastering The Market Cycle: 

I’ve been on vacation this past week in Japan, which continues to be an exceptionally nice place to visit. One of the many things that strikes me as unusual is the number of older people, mostly men, doing certain kinds of work - things like waving a flag to direct traffic around construction, which led me to a quick look at the Japanese labor market. 

For an individual or organization, working out what you are really good at, what you can do that delivers the most value, unlocks a lot of good things. 

I’ve been catching up on season two of The Intersection podcast, which focuses on the corner of Shoreline and Space park way in Mountain View, right in the heart of Google. 

One of the other ideas from Transaction Cost Economics I liked was the remidiableness criterion, due to Williamson. The core question in TCE is why do firms staff certain work internally while sourcing other work from the market?