ESG is Bullsh*t

June 12, 2022

“Bottoms in the investment world don’t end with four-year lows; they end with 10- or 15-year lows.” 

– Jim Rogers

RESEARCH

LongTail Alpha on trend-following across a variety of interest rate environments.

Source: LongTail Alpha

GMO gets into growth traps and the challenging performance growth stocks have faced.

“Even against the backdrop of lousy overall returns for growth since last summer, growth traps have managed to underperform the broad growth universe by their largest margin for any comparable period in history. “

Man Institute walks through bear markets and recessions.

BONUS CONTENT

Peter Zeihan’s new book will be released on Tuesday, June 14th and is a must-read on the changing world order. He looks at the impact of depopulation, deglobalization, and implications on commodities, supply chains, and more.  You can hear him discuss the book and current events on The Meb Faber Show podcast here.

Our team read an advanced copy of the book; check out some of our favorite passages below 

The new norm – When the Cold War ended, the Americans had the opportunity to do nearly anything. Instead, both on the Left and the Right, we started a lazy descent into narcissistic populism. The president election record that brought us Clinton and W Bush and Obama and Trump and Biden isn’t an aberration, but instead a pattern of active disinterest. It is our new norm. 

Famines – There will be no shortage of famines in the post-Order world. Likely in excess of 1 billion people will starve to death, and another 2 billion will suffer chronic malnutrition. Some two-thirds of China’s population faces one of those two fates. And remember, China is also history’s most quickly aging society. The people who will be called upon to manage – or suffer through – mass malnutrition and famine are going to be old.

Greentech – Zones for which today’s greentech makes both environmental and economic sense compires less than one-fifth of the land area of the populated continents, most of which is far removed form our major population centers.

Economic free fall – The concept of more has been our guiding light as a species for centuries. From a certain point of view, the past seventy years of globalization has simply been “more” on steroids, a sharp uptake on our long-cherished economic understandings. Between the demographic inversion and the end of globalization, we are not simply ending our long experience with more, or even beginning a terrifying new world of less; we face economic free fall as everything that has underpinned humanity’s economic existence since the Renaissance unwinds all at once.  

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PODCASTS

Professor Damodaran discusses how inflation impacts valuations, the importance of stories, and why he thinks ESG is “a feel good scam that is making a lot of people wealthy.”

From The Episode:“I think an ESG expert is an oxymoron. How can you be an expert on a discipline that has nothing to it? Are you some kind of Dali Lama and Mother Theresa rolled into one that you can see virtue and recognize when you see it.”

Investing in mediocrity[5/20/22–24 minutes]Apple | Spotify | Google

This fun episode investigates whether luck or skill is behind success in financial markets, and why ‘strategic mediocrity’ may be the key to winning big.

From The Episode:“When I did simulations as to what it takes to land somewhere in the top decile, it became very clear that if you consistently stay in the top third, but never end up number 1, 2, or 3, that over time, you would end up in the top decile of the competitive universe.” – Ben Trotsky, ex-PIMCO

Karniol-Tambour touches on inflation protection & commodities, country diversification, and a systematic and fundamental approach to sustainable investing.

From The Episode:“To me, inflation-linked bonds are probably the best stagflation assets that one could own and are pretty under-owned relative to how valuable they could be.”

The new TK-01 is a super-automatic espresso machine grinds fresh beans and brews with ease. It’s equipped with a grinder to grind whole beans before each brew, as well as a pre-ground coffee bypass chute. The machine froths both dairy and alternative milks exactly to your liking at the touch of a button. It has simple self-cleaning functions for the milk and coffee systems.

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