This week’s links: 2/3/19

Downsides to rushed tax policy for investments: opportunity zones in Portland – Bloomberg

The “Bubble Model” suggests there is a bubble in the stock market, and it’s begun to burst – GMO

  • About 2017-18: “While there were some signs of highly speculative behavior in the form of the stunning rise in the price of Bitcoin, or activity around Big Data and Artificial Intelligence, newspapers were not filled with stories of barbers or shoe shiners turned stockbrokers. So while one condition for a bubble was satisfied, high valuation, the other condition, euphoria, was arguably absent.”
  • The technicals: “Euphoria manifests as explosive dynamics, expressed quantitatively as a negative mean reversion speed […] While most of the time valuation is mean reverting, on rare occasions valuation is temporarily explosive, or mean averting. This mean aversion goes hand in hand with expensive valuation and is the defining characteristic of a bubble […] However, a negative mean reversion speed means that price moves away from fundamental value and mean aversion, not mean reversion, holds […] Between 1881 and today there are only five periods of explosive dynamics: 1) the late 1910s; 2) 1929; 3) the early 1980s; 4) the late 1990s; and 5) 2017-18. The first four periods are well known to market historians, while the fifth period, which begins in 2017, is still playing out. The late 1910s is the period of the Forgotten Depression, an era of deflationary pressures and a depression economy. The 1929 bubble marks the end of the Roaring Twenties and the beginning of the depression era of the 1930s. The early 1980s mark the end of the stagflation of the 1970s and the beginning of the almost 20-year bull market that culminated with the bubble of the late 1990s.”

The insurance market supporting the NFL is evaporating – ESPN

Another healthcare system failure: access to insulin – NYTimes

30 Best Pieces of Advice for Entrepreneurs in 2018 – First Round

  • “To land the leap between familiar and intimate, break out of the habit of conversational cowardice. This refers to our tendency to keep discussions safe and limited to the surface, out of a fear of looking ignorant.”
    • Good questions: “tell me about the business model – who pays whom and who delivers value to whom? what makes someone unsuccessful in this job?
  • Early in her product manager career, she conducted internal interviews with all divisions at all rungs of the ladder, around three questions: what’s your least favorite part of the product, and how do you think we got there? of what part of the product are you most proud of? what do you think customers are most excited for, why?
  • Assess product/market fit with these questions: how would you feel if you could no longer use Product X? What type of people do you think would benefit most from Product X? What is the main benefit you get from X? How can we improve X?
  • “Get three to four people from the hiring panel to join in on the offer call. When the candidate calls in, explain that other folks are in the room because you are all thrilled to extend an offer. (That’s the cue for the cheering and clapping.) Let everyone in the room go around and share how the candidate impressed them during the interviews. The specifics make a big difference in signaling you’ve found strong alignment. Then walk through the actual offer details more privately with the candidate.”
  • “Ignore what she calls false signals of success — capital raised, press, social media followers — in favor of a more meaningful signal: customer behavior.”
  • Investor update email template:

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