Articles I’m reading:
Jeff Bezos’ latest annual letter to shareholders is fresh off the press. His letters are always worth a read, and this one is no exception. This year, Bezos asks the question of whether high standards are intrinsic or teachable (he believes they’re teachable). He then lays out his, and Amazon’s, philosophy for teaching and maintaining high-standards. Here’s a section on the difference between universal and domain specific standards.
Another important question is whether high standards are universal or domain specific. In other words, if you have high standards in one area, do you automatically have high standards elsewhere? I believe high standards are domain specific, and that you have to learn high standards separately in every arena of interest. When I started Amazon, I had high standards on inventing, on customer care, and (thankfully) on hiring. But I didn’t have high standards on operational process: how to keep fixed problems fixed, how to eliminate defects at the root, how to inspect processes, and much more. I had to learn and develop high standards on all of that (my colleagues were my tutors).
Understanding this point is important because it keeps you humble. You can consider yourself a person of high standards in general and still have debilitating blind spots. There can be whole arenas of endeavor where you may not even know that your standards are low or non-existent, and certainly not world class. It’s critical to be open to that likelihood.
It’s a short and thoughtful read. Here’s the link. Oh yeah… Bezos also discloses the number of Prime members for the first time. Amazon now has 100 MILLION prime users… To put that into some perspective, there’s 126 million total households in the US. That’s bananas…
Also, Eric Lonengran, a macro hedge fund manager and author of the excellent Philosophy of Money blog, wrote a post on how we shouldthink about trade deficits. Hint: it’s not as simple as just “deficits are bad!”. Here’s an excerpt and the link.
To make it clear how foolish the ‘deficits are bad’ argument is, consider not just that for every country with a trade surplus there has to be one with a deficit, but every country that has a current account deficit also must have a capital account surplus on its balance of payments, in other words it receives more in inward investment than it sends overseas. In principle, Trump could reduce the trade deficit by making the US a lot less attractive to invest in. In fact, the evidence has shown for a very long time that the capital inflows which America receives on average receive very poor returns, so much so, that America manages to have net external assets. It would make more sense for the Chinese population to complain that its capital is being wasted financing the US government, for a near-zero real return.
Lastly, check out this new tool from Google. It’s called Talk To Books. Here’s the link. It uses AI and natural language processing to respond to your questions/thoughts with relevant excerpts from books. It’s pretty awesome and a great way to go down the rabbit hole on a topic and do some good book discovery.