What We’re Reading (Week Ending 28 March 2021)

The best articles we’ve read in recent times on a wide range of topics, including investing, business, and the world in general.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 28 March 2021:

1. Elevate Our Minds – Kazuo Inamori

I can’t observe nature, the formation of matter in the universe, the birth of life or the process of evolution and not see a destiny that is more than coincidental.

The world seems to have a “flow” that evolves and develops everything. I call this “the will of the universe.” This will is filled with love, sincerity and harmony. Our personal destiny depends on whether or not the energy emitted by our mind is in harmony with the universal will.

Fortune smiles upon us when we make a wish with a pure mind that is in harmony with this universal will.

Our attitude and heart play a decisive role in achieving wonderful results in our life and work.

A loving, sincere and harmonious heart leads to success. Such a heart is a natural part of our spiritual selves. “Love” rejoices in other people’s happiness as if it were our own. “Sincerity” is a mindset that seeks good for the sake of society and others. “Harmony” compels us to always wish for happiness, not just for ourselves, but for everyone around us.

A loving, affectionate, sincere and harmonious heart is the foundation that leads a person to success.

Wonderful success can come only from the designs of a pure mind. No matter how strong our desires may be, if they are generated from our selfishness, success cannot be sustained.

The stronger an irrational desire is, the more it will conflict with society and the more catastrophic its results will be.

To sustain success, our desire and enthusiasm must be pure. In other words, you must make sure that your desire is pure before you make it permeate your subconscious mind. And, only continuous efforts stemming from pure hearts will enable us to realize our goals.

2. Unlocking the Covid Code – Jon Gertner

In the sphere of public health, one of the first big breakthroughs enabled by faster genomic sequencing came in 2014, when a team at the Broad Institute of M.I.T. and Harvard began sequencing samples of the Ebola virus from infected victims during an outbreak in Africa. The work showed that, by contrasting genetic codes, hidden pathways of transmission could be identified and interrupted, with the potential for slowing (or even stopping) the spread of infection. It was one of the first real-world uses of what has come to be called genetic surveillance. A few years later, doctors toting portable genomic sequencers began tracking the Zika virus around Central and South America. Sequencers were getting better, faster and easier to use.

To many, the most familiar faces of this technology are clinical testing companies, which use sequencing machines to read portions of our genetic code (known as “panels” or “exomes”) to investigate a few crucial genes, like those linked to a higher risk of breast cancer. But more profound promises of genome sequencing have been accumulating stealthily in recent years, in fields from personal health to cultural anthropology to environmental monitoring. Crispr, a technology reliant on sequencing, gives scientists the potential to repair disease-causing mutations in our genomes. “Liquid biopsies,” in which a small amount of blood is analyzed for DNA markers, offer the prospect of cancer diagnoses long before symptoms appear. The Harvard geneticist George Church told me that one day sensors might “sip the air” so that a genomic app on our phones can tell us if there’s a pathogen lurking in a room. Sequencing might even make it possible to store any kind of data we might want in DNA — such an archival system would, in theory, be so efficient and dense as to be able to hold the entire contents of the internet in a pillowcase…

…As machines improved, the impact was felt mainly in university labs, which had relied on a process called Sanger sequencing, developed in the mid-1970s by the Nobel laureate Frederick Sanger. This laborious technique, which involved running DNA samples through baths of electrically charged gels, was what the scientists at Oxford had depended upon in the mid-1990s; it was also what Dave O’Connor, a virologist at the University of Wisconsin, Madison, was using in the early 2000s, as he and his lab partner, Tom Friedrich, tracked virus mutations. “The H.I.V. genome has about 10,000 letters,” O’Connor told me, which makes it simpler than the human genome (at three billion letters) or the SARS-CoV-2 genome (at about 30,000). “In an H.I.V. genome, when we first started doing it, we would be able to look at a couple hundred letters at a time.” But O’Connor says his work changed with the advent of new sequencing machines. By around 2010, he and Friedrich could decode 500,000 letters in a day. A few years later, it was five million.

By 2015, the pace of improvement was breathtaking. “When I was a postdoctoral fellow, I actually worked in Fred Sanger’s lab,” Tom Maniatis, the head of the New York Genome Center, told me. “I had to sequence a piece of DNA that was about 35 base pairs, and it took me a year to do that. And now, you can do a genome, with three billion base pairs, overnight.” Also astounding was the decrease in cost. Illumina achieved the $1,000 genome in 2014. Last summer, the company announced that its NovaSeq 6000 could sequence a whole human genome for $600; at the time, deSouza, Illumina’s chief executive, told me that his company’s path to a $100 genome would not entail a breakthrough, just incremental technical improvements. “At this point, there’s no miracle that’s required,” he said. Several of Illumina’s competitors — including BGI, a Chinese genomics company — have indicated that they will also soon achieve a $100 genome. Those in the industry whom I spoke with predicted that it may be only a year or two away.

These numbers don’t fully explain what faster speeds and affordability might portend. But in health care, the prospect of a cheap whole-genome test, perhaps from birth, suggests a significant step closer to the realization of personalized medicines and lifestyle plans, tailored to our genetic strengths and vulnerabilities. “When that happens, that’s probably going to be the most powerful and valuable clinical test you could have, because it’s a lifetime record,” Maniatis told me. Your complete genome doesn’t change over the course of your life, so it needs to be sequenced only once. And Maniatis imagines that as new information is accumulated through clinical studies, your physician, armed with new research results, could revisit your genome and discover, say, when you’re 35 that you have a mutation that’s going be a problem when you’re 50. “Really, that is not science fiction,” he says. “That is, I’m personally certain, going to happen.”

3. Outgrowing Software – Ben Evans

Walmart was built on trucking and freeways (and computers), but Walmart is a retailer, not a trucking company: it used trucks to change retail. Now people do the same with software.

But it’s also interesting to look at the specific industries that have already been destabilised by software, and at what happened next. The first one, pretty obviously, was recorded music. Tech had a huge effect on the music business, but no-one in tech today spends much time thinking about it. 15 and 20 years ago music was a way to sell devices and to keep people in an ecosystem, but streaming subscription services mean music no longer has much strategic leverage – you don’t lose a music library if you switch from iPhone to Android, or even from Spotify to Apple Music. Meanwhile, the absolute size of the market is tiny relative to what tech has become – total recorded music industry revenues were less than $20bn last year (half the peak in 2000), where Apple’s were $215bn. No-one cares about music anymore.

Something similar happened in books. Amazon has half the market, ebooks became a real business (though they remain a niche), and self-publishing has become a new vertical, but I suspect Apple wouldn’t bother to do ebooks again if it had the choice. Just as for music, there’s no strategic leverage, and total US book market revenues last year were perhaps $25bn, where Amazon’s US revenue was $260bn. No-one in tech cares about online book sales or ebooks.

More fundamentally, though, for both music and books, most of the arguments and questions are music industry questions and book industry questions, not tech or software questions. Spotify is suing Apple over the App Store commission rules, but otherwise, all the Spotify questions are music questions. Why don’t artists make more from streaming? Ask the labels. Why didn’t the internet kill labels or publishers? Ask music people and book people.

4. Inside Facebook Reality Labs: Wrist-based interaction for the next computing platform – Facebook

The future of HCI [human-computer interaction] demands an exceptionally easy-to-use, reliable, and private interface that lets us remain completely present in the real world at all times. That interface will require many innovations in order to become the primary way we interact with the digital world. Two of the most critical elements are contextually-aware AI that understands your commands and actions as well as the context and environment around you, and technology to let you communicate with the system effortlessly — an approach we call ultra-low-friction input. The AI will make deep inferences about what information you might need or things you might want to do in various contexts, based on an understanding of you and your surroundings, and will present you with a tailored set of choices. The input will make selecting a choice effortless — using it will be as easy  as clicking a virtual, always-available button through a slight movement of your finger.

But this system is many years off. So today, we’re taking a closer look at a version that may be possible much sooner: wrist-based input combined with usable but limited contextualized AI, which dynamically adapts to you and your environment.

We started imagining the ideal input device for AR glasses six years ago when FRL Research (then Oculus Research) was founded. Our north star was to develop ubiquitous input technology — something that anybody could use in all kinds of situations encountered throughout the course of the day. First and foremost, the system needed to be built responsibly with privacy, security, and safety in mind from the ground up, giving people meaningful ways to personalize and control their AR experience. The interface would also need to be intuitive, always available, unobtrusive, and easy to use. Ideally, it would also support rich, high-bandwidth control that works well for everything from manipulating a virtual object to editing an electronic document. On top of all of this, it would need a form factor comfortable enough to wear all day and energy-efficient enough to keep going just as long.

That’s a long list of requirements. As we examined the possibilities, two things became clear: The first was that nothing that existed at the time came close to meeting all those criteria. The other was that any solution that eventually emerged would have to be worn on the wrist.

Why the wrist? There are many other input sources available, all of them useful. Voice is intuitive, but not private enough for the public sphere or reliable enough due to background noise. A separate device you could store in your pocket like a phone or a game controller adds a layer of friction between you and your environment. As we explored the possibilities, placing an input device at the wrist became the clear answer: The wrist is a traditional place to wear a watch, meaning it could reasonably fit into everyday life and social contexts. It’s a comfortable location for all-day wear. It’s located right next to the primary instruments you use to interact with the world — your hands. This proximity would allow us to bring the rich control capabilities of your hands into AR, enabling intuitive, powerful, and satisfying interaction.

A wrist-based wearable has the additional benefit of easily serving as a platform for compute, battery, and antennas while supporting a broad array of sensors. The missing piece was finding a clear path to rich input, and a potentially ideal solution was EMG.

EMG — electromyography — uses sensors to translate electrical motor nerve signals that travel through the wrist to the hand into digital commands that you can use to control the functions of a device. These signals let you communicate crisp one-bit commands to your device, a degree of control that’s highly personalizable and adaptable to many situations.

The signals through the wrist are so clear that EMG can understand finger motion of just a millimeter. That means input can be effortless. Ultimately, it may even be possible to sense just the intention to move a finger. 

“What we’re trying to do with neural interfaces is to let you control the machine directly, using the output of the peripheral nervous system — specifically the nerves outside the brain that animate your hand and finger muscles,” says FRL Director of Neuromotor Interfaces Thomas Reardon, who joined the FRL team when Facebook acquired CTRL-labs in 2019.

This is not akin to mind reading. Think of it like this: You take many photos and choose to share only some of them. Similarly, you have many thoughts and you choose to act on only some of them. When that happens, your brain sends signals to your hands and fingers telling them to move in specific ways in order to perform actions like typing and swiping. This is about decoding those signals at the wrist — the actions you’ve already decided to perform — and translating them into digital commands for your device. It’s a much faster way to act on the instructions that you already send to your device when you tap to select a song on your phone, click a mouse, or type on a keyboard today.

5. Completing The God Protocols: A Comprehensive Overview of Chainlink in 2021 – SmartContent

In 1997, computer scientist Nick Szabo described what he termed the “God Protocols.” In short, the God Protocols refer to the general idea of a set of computer protocols that could arbitrate and facilitate processes involving an exchange of value between two or more independent parties without any bias, error, or privacy concerns. This perfect third party would be equally accessible to all participants, fairly and flawlessly execute actions according to mutually pre-agreed upon rules and commands, and wouldn’t leak sensitive information to unintended entities.

When extrapolated out to multi-party contracts, the God Protocols are designed to eliminate inefficiencies and counterparty risk by replacing human-based arbitrators/executors with math-based arbitrators/executors, resulting in the correct party consistently getting what they are owed, when they are owed, and from whom they are owed, based entirely on a provably objective interpretation of the events in which the contract is written about. Additionally, the Gods Protocols would extract as little value as possible from the process, only receiving what is needed to cover the costs of performing it…

…The third component to the God protocols is for smart contracts to become aware of events and interact with systems existing outside the native blockchain they run on. External connectivity entails two functions: 1) consuming data originating outside the blockchain and 2) passing instructional commands to external systems for them to perform (e.g., execute a payment on PayPal).

Blockchains are inherently closed and deterministic systems, meaning they have no built-in capabilities to talk to and exchange data between external systems (as doing so could break network consensus). While this generates the valuable security and reliability properties that users seek when using a blockchain, it also severely limits the types of data inputs that smart contracts can ingest and the types of output actions they can trigger on external systems. Most valuable datasets like financial asset prices, weather conditions, sports scores, and IoT sensors, as well as the currently preferred fiat settlement methods like credit cards and bank wires, exist outside the blockchain (off-chain). Given the importance of these resources to real-world business processes, blockchains need a secure bridge to the outside world in order to support a vast majority of smart contract application use cases.

Providing smart contracts connection to the outside world requires an additional piece of infrastructure known as an oracle. An oracle is an external entity that operates on behalf of a smart contract by performing actions not possible or practical by the blockchain itself. This usually involves retrieving and delivering off-chain data to the smart contract to trigger its execution or passing data from the smart contract to an external system to trigger an off-chain event. It can also involve various types of off-chain computations in advanced oracle networks (discussed more below), such as aggregating data from multiple sources or generating a provably fair source of randomness.

Similar to blockchains, the oracle mechanism cannot be operated by a single entity, as that would give the centralized oracle sole control over the inputs the contract consumes, thus control over the outputs it produces. Even if the blockchain is highly secure and the smart contract logic is perfectly written, the oracle will put at risk the entire value proposition of the smart contract if it is not built to the same security and reliability standards as the underlying blockchain network, often referred to as the oracle problem. Why have a blockchain network of thousands of nodes when it’s triggered by a single entity?

6. What If Interest Rates Don’t Matter as Much as We Think? – Ben Carlson

It’s obvious the Fed is propping up risk assets, right?

Well investors in the 1960s, 1970s and 1990s were more than happy to take speculation to another level with rates much much higher than they’ve been since 2008.

The same is true of the housing market…

…Interest rates do matter. They provide a hurdle rate, discount rate, benchmark, alternative to risk assets, however you want to look at it.

But they aren’t the be-all, end-all to the markets some would have you believe.

There are so many other factors at play that determine why investors do what they do with their money — demographics, demand, risk appetite, past experiences and a whole host of psychological and market-related dynamics.

Interest rates don’t turn people into gamblers.

They don’t force investors into lottery-ticket traders looking to get rich overnight.

Humans are just fine doing that on their own, regardless of interest rate levels.

Could there be a psychological impact if rates rise from here or fall from here or go nowhere for years on end?

Of course!

7. Five Investing Powers – Morgan Housel

Low susceptibility to FOMO. But for a different reason than you might think. The urge to buy an investment because its price went up means you probably don’t know why the price has gone up. And if you don’t know why the price has gone up you’re more likely to bail when it goes down. Most good investing is just sticking around for the longest time possible, through thick and thin. Quash the need to own whatever is going up the most and you reduce the urge to abandon whatever eventually goes down. Someone will always be getting richer than you. It’s OK.

Knowing what game you’re playing. An idea that’s obvious but overlooked is that investors on the same field play different games. We buy the same companies, read the same news, talk to the same people, are quoted the same market prices – but we’re everything from day traders to endowments with century-long time horizons. Even investors who think they’re playing the same game – say, stock pickers – have wildly different goals and risk tolerances. My view is that most investing debates do not reflect genuine disagreement; they reflect investors playing different games talking over each other, upset that people who don’t want what you want can’t see what you see. Understanding your game, without being swayed by people playing different games, is a rare investing power.

Recognizing the difference between patience and stubbornness. Two things are true: 1) every asset goes through temporary out-of-favor periods, and 2) the world changes, and some things fall permanently out of favor. Industries go through normal cycles, then they die. Investing strategies work for decades, then they stop. Realizing that patience plays the most important role in investing, but it shouldn’t be used blindly in every situation, is so hard. Dealing with it requires a combination of conviction and flexibility that can feel like a contradiction. The trick – and that’s the right word – is realizing that some behaviors never change but the composition of the economy always does. Having a few immutable beliefs but even more that you’re willing to abandon is a rare investing power.


Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. Of all the companies mentioned, we currently have a vested interest in Amazon, Apple, Facebook, Illumina, and PayPal. Holdings are subject to change at any time.