Published on: 2 Dec, 2018

At the end of each week, we will share with your our favourite reads. We would be grateful if you could reciprocate. This week’s reads focus on changing the world, midlife crisis, Nirvana’s ‘Nevermind’, Cryptocurrencies and Real Estate.

1. Long read: Adm. McRaven Urges Graduates to Find Courage to Change the World
Authors: Admiral McRaven
Source: University of Texas (

As a start-up, we run into people every now and then who try to use their muscle to put us in our place. In the narrow context of our lives and in the broader context of the world we live in, we loved this commencement speech given by US Navy veteran, Admiral McRaven (ninth commander of U.S. Special Operations Command) to the University of Texas.

What the Admiral does in his speech is to use his Navy Seal training course as a metaphor for our lives. Three of his vignettes stand out:

“Every morning in basic SEAL training, my instructors, who at the time were all Vietnam veterans, would show up in my barracks room and the first thing they would inspect was your bed. If you did it right, the corners would be square, the covers pulled tight, the pillow centered just under the headboard and the extra blanket folded neatly at the foot of the rack — that’s Navy talk for bed.

It was a simple task — mundane at best. But every morning we were required to make our bed to perfection. It seemed a little ridiculous at the time, particularly in light of the fact that were aspiring to be real warriors, tough battle-hardened SEALs, but the wisdom of this simple act has been proven to me many times over.

If you make your bed every morning you will have accomplished the first task of the day. It will give you a small sense of pride, and it will encourage you to do another task and another and another. By the end of the day, that one task completed will have turned into many tasks completed. Making your bed will also reinforce the fact that little things in life matter. If you can’t do the little things right, you will never do the big things right.

And, if by chance you have a miserable day, you will come home to a bed that is made — that you made — and a made bed gives you encouragement that tomorrow will be better. If you want to change the world, start off by making your bed.”

“Several times a week, the instructors would line up the class and do a uniform inspection. It was exceptionally thorough. Your hat had to be perfectly starched, your uniform immaculately pressed and your belt buckle shiny and void of any smudges. But it seemed that no matter how much effort you put into starching your hat, or pressing your uniform or polishing your belt buckle — it just wasn’t good enough. The instructors would find “something” wrong.

For failing the uniform inspection, the student had to run, fully clothed into the surfzone and then, wet from head to toe, roll around on the beach until every part of your body was covered with sand. The effect was known as a “sugar cookie.” You stayed in that uniform the rest of the day — cold, wet and sandy.

There were many a student who just couldn’t accept the fact that all their effort was in vain. That no matter how hard they tried to get the uniform right, it was unappreciated. Those students didn’t make it through training. Those students didn’t understand the purpose of the drill. You were never going to succeed. You were never going to have a perfect uniform.

Sometimes no matter how well you prepare or how well you perform you still end up as a sugar cookie. It’s just the way life is sometimes.

If you want to change the world get over being a sugar cookie and keep moving forward.”

“During the land warfare phase of training, the students are flown out to San Clemente Island which lies off the coast of San Diego. The waters off San Clemente are a breeding ground for the great white sharks. To pass SEAL training there are a series of long swims that must be completed. One is the night swim.

Before the swim the instructors joyfully brief the trainees on all the species of sharks that inhabit the waters off San Clemente. They assure you, however, that no student has ever been eaten by a shark — at least not recently. But, you are also taught that if a shark begins to circle your position — stand your ground. Do not swim away. Do not act afraid. And if the shark, hungry for a midnight snack, darts towards you — then summon up all your strength and punch him in the snout, and he will turn and swim away.

There are a lot of sharks in the world. If you hope to complete the swim you will have to deal with them.

So, if you want to change the world, don’t back down from the sharks.”

2. Long read: Extreme Athleticism Is the New Midlife Crisis
Author: Paul Flannery
Source: Medium (

Canadian psychologist Elliot Jacques’s 1957 paper on “Death and the Mid-Life crisis” brought out the aspect of realisation of mortality as we approach mid-life. In this piece, Paul Flannery links the rise in middle aged people taking up extreme endurance activities as a response to such realisation and suggests that it is perhaps a more positive and constructive way of dealing with that anxiety.

“Getting older can trigger a kind of introspection, and often that introspection focuses on how much time has passed, how much is left, and what to do with it. That can create anxiety, and that anxiety can be multiplied by depression, stress, or good old-fashioned existential ennui.

For decades, the midlife crisis has been expressed in tired pop-culture tropes in which (usually) white men buy sports cars and carry on affairs with younger women in a doomed and desperate bid to feel young again. But increasingly, people are responding to the anxieties of middle age not by clinging to the last vestiges of expiring youth but to taking on challenges that seem to belong to the young alone: by pushing the limits of what they’re physically capable of through endurance athletics and extreme fitness. The focus is less on what happened before the crisis and more on what happens after. Call it the midlife correction.

Today, almost a third of all triathlon participants in the United States are between the ages of 40 and 49, according to the U.S. Triathlon organization. That’s the largest age demographic by decade and one of the most competitive. The same holds true for the Boston Marathon, where more than 8,200 runners in their 40s crossed the finish line in April, a little more than 31 percent of the total field. The largest field of competitors at the 2017 New York Marathon was between the ages of 40 and 44. In London in 2015, those 40–49 runners had faster overall times than the 20–29-year-olds.”

3. Long read: Nirvana’s “Nevermind” – The 1991 album that gave rise to a rock genre and captured the spirit of a new generation.
Author: Hua Hsu
Source: New Yorker (

One of the things great writers can do is pick quirky/interesting subjects of popular interest to write on and then bring unusually deep perspective to bear on the matter. This super essay from the New Yorker in Nirvana’s superhit 1991 song “Nevermind” falls in that category. This essay is part of the New Yorker’s “Touchstones” series in which New Yorker writers guide us through the works that shaped them as critics and as people.

Nirvana brought a new type of music – grunge – into the mainstream and behind Nirvana was a smart businessman. In the author’s words, “When Nirvana released its second album, “Nevermind,” in the fall of 1991, everything changed—for me, and for the pop-music ecosystem. The band, which now consisted of Cobain, the bassist Krist Novoselic, and the drummer Dave Grohl, had signed with a major label, Geffen Records. A few years earlier, Geffen had begun wagering that “alternative rock”—a category that began appearing on the Billboard charts around that time—could be a profitable niche. The label had signed Sonic Youth, respected pioneers of New York’s avant-garde rock scene, and a band whose trajectory and choices Cobain admired. Perhaps there was a strange excitement to smuggling something unusual into the mainstream. The cover of “Nevermind,” which featured a naked baby swimming toward a dollar bill, seemed a sly and hilarious allusion to signing with Geffen.”

With the launch of Nevermind came a song which for many people instantly evokes 1991 whenever the first few chords are played. “The perfect distillation of Nirvana’s newly refined sound was “Smells Like Teen Spirit,” which Cobain later described as his jokey attempt to write “the ultimate pop song.” On September 29, 1991, the music video for “Smells Like Teen Spirit” premièred on MTV’s late-night alternative-music show, “120 Minutes.” The video quickly went from the “120 Minutes” niche to the “Buzz Bin”—MTV’s showcase for up-and-coming bands—to constant rotation.”

Central to the electric appeal of this song was lead singer Kurt Cobain’s ability to toggle between “soft and quiet” to “loud and hard”. For many of us who could not stand hard rock, this song was a reminder of how powerful the effect can be if an artist can combine two genres in one song. In the author’s words, “Cobain admired how the Pixies could move from “soft and quiet” to “loud and hard.” You can hear a similar dynamism in the opening of Nirvana’s “Smells Like Teen Spirit,” in which Cobain’s low-key guitar suddenly gives way to Grohl’s end-of-days drumming.”

Then in the liner notes of Nirvana’s 1992 album “Incesticide”, Kurt Cobain said something which made him a god for many of us who at that point in our life – like the author – were still seeking an identity: “If any of you in any way hate homosexuals, people of different color, or women, please do this one favor for us—leave us the fuck alone! Don’t come to our shows and don’t buy our records.”

The rest of the story of this remarkable man’s remarkable life unfortunately fits the pattern of many rock star’s lives – blazing stardom followed by heroin addiction followed by suicide in 1994. But the memories of 1991, of a remarkable album and of a remarkable artist will never die.

4. Short read: Will UK House Prices Ever Rise Again?
Author: Merryn Somerset Webb
Source: Financial Times (

Across the English speaking world – including India – a delusion that grips affluent people is that there is some sort of law in Finance which says that house prices have to rise, if not tomorrow, if not next year, then at least in the next decade. This delusion is fuelled by a belief that somehow land/housing is in limited supply and hence should go up in price.

This article busts that myth in the context of the UK. Deutsche Bank’s long term asset return study shows that UK house prices have risen by just 3% a year in inflation-adjusted terms since 1939. But before that they fell by 50% in inflation adjusted terms from 1290 to 1939!! So why have house prices shown an upward drift in the last 80 years?

The answer lies in demographics. From 1950 to 2000, the global population doubled from 2.5bn to 6.1bn. Even more specifically, as the baby boomers came into the job market from the 1970s onwards and then created their own families, they started looking for houses. As they became affluent, they started seeking bigger houses. In the Western world, this seems to have been the main driver on house prices. That impulse is now dying down as the West (with the exception of the US) ages.

It is therefore now possible that UK house prices go back to being static for a long period of time. In the East Asian context data is already emerging that family formation is beginning to decline. It is not hard to imagine the consequences this might have for house prices in a market like China.

5. Short read: Why Central Bank Digital Currencies Will Destroy Cryptocurrencies
Author: Nouriel Roubini
Source: Project Syndicate (

In this insightful piece, Roubini explains why it is easy and almost inevitable that Central Banks use their unique place in the financial system to displace cryptocurrencies with their own Central Bank Digital Currencies (CBDCs). If we extrapolate Roubini’s thinking, a broader point emerges: wherever blockchain challenges the authority or the role of the sovereign, it will be easy for the sovereign to step into the blockchain and take control of it.

“…only commercial banks have access to central banks’ balance sheets; and central banks’ reserves are already held as digital currencies…Because individuals, corporations, and non-bank financial institutions do not enjoy the same access, they must rely on licensed commercial banks to process their transactions. Bank deposits, then, are a form of private money that is used for transactions among non-bank private agents. As a result, not even fully digital systems such as Alipay or Venmo can operate apart from the banking system.

By allowing any individual to make transactions through the central bank, CBDCs would upend this arrangement, alleviating the need for cash, traditional bank accounts, and even digital payment services. Better yet, CBDCs would not have to rely on public “permission-less,”“trustless” distributed ledgers like those underpinning cryptocurrencies. After all, central banks already have a centralized permissioned private non-distributed ledger that allows for payments and transactions to be facilitated safely and seamlessly…If a CBDC were to be issued, it would immediately displace cryptocurrencies, which are not scalable, cheap, secure, or actually decentralized….

The main problem with CBDCs is that they would disrupt the current fractional-reserve system through which commercial banks create money by lending out more than they hold in liquid deposits. Banks need deposits in order to make loans and investment decisions. If all private bank deposits were to be moved into CBDCs, then traditional banks would need to become “loanable funds intermediaries,” borrowing long-term funds to finance long-term loans such as mortgages.

In other words, the fractional-reserve banking system would be replaced by a narrow-banking system administered mostly by the central bank. That would amount to a financial revolution – and one that would yield many benefits. Central banks would be in a much better position to control credit bubbles, stop bank runs, prevent maturity mismatches, and regulate risky credit/lending decisions by private banks.”

6. Short read: Why my generation is the last of the hedonists
Author: Janan Ganesh
Source: Financial Times (

Janan Ganesh notes the millenials’ growing abstinence from use of alcohol and drugs and even physical intimacy and wonders if these typical hedonistic pleasures of the previous generation are being replaced by hits from digital tools.

“Consider the well-documented abstention of the young: America’s millennial homebodies, the near-third of British 16- to 24-year-olds who refuse alcohol, their avoidance of illicit drugs, the “sexual recession”. Thus did the shuttered nightclub become this decade’s video-rental chain in receivership.”

The previous generation “tends to an instrumental view of tech: it is there to arrange personal gatherings, and improve the time in between. The emergent suspicion is that, for younger millennials, digital contact with others is socialising.”

“The dread, as voiced by Sean Parker, among others, is a deeper re-wiring of the brain so that it registers the same stimulus from remote interaction as from drugs and physical intimacies. Hence the generational decline in both. If this is going on, it is not just hard to reverse, it is liable to accelerate. Imagine the millennials’ children.”

“History has thrown up these ruptures before: generations divided along the knife’s edge of a new invention. Think of the difference in teenagers just before and just after the advent of the pill. The world did not cave in. Nor is it clear that Generation Sensible is losing out. The internet’s “social-validation feedback loop” (Parker’s phrase) seems insidious to we who grew up without it. But teetotal Instagrammers will wonder if alcohol is any smarter a way of flooding human dopamine receptors. As for the decline in sex, teenage pregnancies have been falling in England and Wales for a decade.”

Note: the above material is neither investment research, nor financial advice. Marcellus is not authorized to provide either. Marcellus does not seek payment for or business from this email in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services.

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