đ How To Handle Anger Like Abraham Lincoln
Capital Allocation, Hot Letters, & U.S. Manufacturing
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Todayâs estimated read time: 3 minutes & 27 seconds.
This is written by Jetâs Pizza enthusiast, Paul.
One Cool Website
The best CEOs have one skill in common. Capital allocation. Capital comes in three forms: time, money, and people. These three forms of capital are the lifeblood of a company. The best CEOs analyze all the potential uses of this capital and commit to the one with the highest return on investment.
You are the CEO of your life. Each day, you decide which activities to spend time on, products to buy, and people to trust. Future you is the beneficiary (or victim) of your capital allocation decisions. Donât worry, Iâve got a free tool to make you a better CEO.
Colossus. Colossus is a searchable repository of podcasts with the masters of capital allocation. It is the single best internet resource for building a better capital allocation muscle. IT IS ABSURD THAT IT IS FREE!! I doubt Colossus will be free forever, so get in before itâs too late.
Enjoy learning!
Paul
One Thing Iâm Working On
Practice makes progress.
Your palms are sweating, your mind is racing, your muscles tense up, and you canât catch your breath. âOh my god. Am I having a heart attack?â
Nope. You are having a panic attack. Youâve just been fired as the CEO of Rettiwt.
Youâve been a success your whole life. How could this happen? You went to an elite technical university, received a Ph.D. in Computer Science from Stanford, became a distinguished software engineer, got promoted to CTO, and eventually became the CEO of Rettiwt. Youâve been building Rettiwt for 11 years. And in the span of 5 minutes, youâve lost it all. You are in a fragile mental state. You think about lashing out, telling the chairman to f*** off or bad-mouthing your colleagues. Does getting upset improve your options? No.
Parag Agrawal faced this situation on Friday after Elon Musk bought Twitter (Rettiwt backward) and fired him. Parag and you are not so different. You would feel those same emotions if you got fired, broken up with, or cut from the team. I know I have. You, me, and Parag canât stop that emotional response. It is our biology. Itâs our body and mind trying to protect us. Preparing for fight or flight.
In todayâs world, that response rarely does me any good. I regret the decisions I make while on that emotional rollercoaster. So, Iâm working on accepting those responses BUT increasing the gap between my bodyâs reaction and my response. I give myself space to scream, yell, or cry but restrict decision-making.
The tool Iâve used is Abraham Lincolnâs Hot Letters. Lincoln would write a letter to the person(s) causing him pain. Heâd put the letter in his desk drawer where it would stay, forever. Itâs freeing to capture all that emotional output on paper. After getting my thoughts on paper, I am much calmer.
Give your own hot letters a try!
Paul
One Prediction For The Future
Life is changing fast.
The U.S. manufacturing sector will see a resurgence over the next 30 years. Since the 1970s, U.S. enterprises have moved their manufacturing units to the East. Developing nations in the East offered lower labor costs. In 1979, 19.4 million Americans worked in the manufacturing sector. Today, that number is closer to 12 million. Most of our Fortune 500s are merely R&D plus a solid brand; they no longer produce their own products in-house.
But, the supply chain shock caused by COVID shutdowns exposed the weakness of this business model. Whether it is a pandemic or a political decision, the East can cripple the U.S. economy. The U.S. government is keenly aware of this fact. Congress just passed the CHIPS Act of 2022 to strengthen domestic semiconductor manufacturing, design, and research, fortify the economy and national security, and reinforce Americaâs chip supply chains.
My bet is that this move to onshore production will continue to gain steam. When national security is on the line, people get sh*t done. The government will create incentive structures for companies that onshore production. These incentives will drive more firms to build, buy, or partner with U.S. manufacturing plants. This shifting dynamic will drive the need for more labor working in the plants, creating robots for the plants, managing the plantâs fleet of robots, or creating new technologies to improve the manufacturing process.
Paul
Bread Believer Of The Week!!
You da realest
The Bread Believer of the week is âŠ..drum roll please đ„⊠Brian Metzger!!! Brian is an investment banker, UofI alum, and just a high-quality dude. He helped connect us to the President of Illinoisâ Investment Banking Academy for a potential partnership. Thatâs a ride-or-die Bread Crumbs believer right there.
Brian - Kick your feet up, order yourself some Birds Nest wings, and flip on SNF. May all your fantasy players put up double-digit numbers today!
Hope you have a great week! Cheers to you đ„
Paul
1 Great Book
There is no better bargain than a great book.
I just finished this fantastic read by legendary investor Howard Marks. Mastering the Market Cycle is as much for finance nerds as it is for finance novices. It helps the reader understand the history of market cycles and how to navigate them. Grab a copy of this masterpiece, here!
Paul
Photo of the Week
Hereâs a young (and very skinny) me trying to water ski.
- Paul
Thatâs it for this week. See yâall next Sunday. Breadman gets paid.
Paul & Luke