From 600+ conversations with the world’s leading thinkers.
For large corporations, globalization opened up opportunities without the correlate responsibilities which usually travel with that- so things that banks must do at home (in terms of being carefully regulated) they didn't have to do abroad... This took globalization out of balance, into a vicious cycle – and we're now dealing with the consequences of that.
If we consider the United States, where potentially 40 million people could discover through brain imaging or blood tests that they have amyloid in their brains, the question arises: how can healthcare systems afford to provide a $100,000 per year therapy to so many people? It's simply not feasible.
Even though Brent has been successful in terms of becoming a larger and more liquid benchmark, it is the 'least worst' option.
It really turns our economies away from risk-return (where they create profit without counting the huge damage they cause) to risk-return-impact (where impact is measured alongside profit and reflected in the value of companies).
Globally, we have neglected this topic [agriculture] for decades. We have, worldwide, over a billion undernourished people. Food prices have risen over the past few years, with our own research showing these should accelerate up from 2010. The world's demographics are also alarming: The world's population has quadrupled in the twentieth century, doubling between 1960 and 2007. For the first time in history, we have seen the global urban population exceed the rural one, and, over the past forty years, agricultural-land has increased by only 10%. Two words, food security, are central to our model.
If all the money that's ever been invested in hedge funds had been put in treasury bills instead, the results would have been twice as good.
In a geopolitical recession, suddenly the biggest macro risks are by their nature political. And you focus less on growth and more on stability and resilience, and that's a problem because the free market model tells you 'don't focus on resilience and stability, focus first and foremost on growth and everything else will take care of itself'.
If you're aiming to compete for the same clientele as major banks like JP Morgan Chase, you're entering a highly competitive arena with slim profit margins. However, targeting a segment that such banks deem too risky or uninteresting presents a lucrative opportunity. We considered focusing on demographics or small-medium enterprises that were essentially deemed un-fundable by mainstream financial institutions. The idea was to make these groups profitable and easier for any entity, including banks, to underwrite.
Over this 99.9% of human existence, when technology advances, population advances and counterbalances any potential increase in human prosperity. Suddenly once technological progress reaches a tipping point, families start to invest in education, they economise on the number of children, and technological progress is converted into richer people rather than into more people.
Our philosophy has been about trying to control the entire customer experience. A lot of people, when they think about branding, they think about advertising and marketing. But we actually don't do any advertising or marketing. Instead, we invest all of that money into the customer experience, and then our customers do our marketing for us through word of mouth.
We compute some level of default and losses because of those defaults- and perform IRR calculations to create yields and then we haircut it some more because, in truth, we have no idea!
People like to compare such rare payoffs to lottery tickets. This is way off. We know from the availability heuristic that people overestimate the likelihood of an event based on their ability to envision it—the risk of plane crash versus car crash is the best example of this.