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1. Perfection is an illusion - the true path lies in continual learning and growth

2. Each moment is precious and deserves our undivided attention

3. Losses and failures are inevitable, but they offer invaluable lessons. Extract the wisdom they provide, then leave them behind

4. Negative emotions, complaining, and thought patterns are draining and unproductive. Conserve your energy by cultivating a positive mindset

Also: Happy Father’s Day to all the fathers out there!

Today, we're sharing our fascinating interview with the Financial Times’ Rana Foroohar, who writes about everything from insurance to globalization to big tech.

All this, and more, in just 6 minutes to read.

— Matthew

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Trivia

Exploring Markets, Power and Risk

Not long ago, Rana Foroohar’s home insurance premium in Brooklyn suddenly doubled overnight — from $17,000 to $36,000. It’s a staggering increase by any measure. And, after digging deeper, she uncovered an unsettling reality: Insurers are repricing risk in the face of climate change.

The experience, which became a recent column in the Financial Times, exemplifies Foroohar's knack for spotting trends and her fascination with how markets price (or misprice) risk. As a global business columnist and associate editor at the Financial Times — and the author of several acclaimed books — she’s developed a keen eye for compelling stories in a noisy world.

In her work, Foroohar examines the concentration of wealth and the profound influence in the tech sector, the potential challenges artificial intelligence poses, and the need for localized economies. She’s also written about how to fix America’s loneliness crisis.

Foroohar's analysis is both incisive and engaging. She draws on her conversations with economists, policymakers, businesspeople, and notable investors, including Warren Buffett and Carl Icahn.

In this wide-ranging Q&A, Foroohar shares her insights on the evolving dynamics of markets, the growing wealth gap, and the cozy relationship between Wall Street and Washington. She also offers a thought-provoking look at the intersection of markets, power, and risk.

This interview has been edited lightly for brevity and clarity.

Where did you grow up, and how did you become interested in markets?

I grew up in rural Indiana. My dad is a Turkish immigrant, so I spent much time in Turkey as a kid. My mom grew up in Chattanooga, so I spent a lot of time in the South, too. I started as a pre-med student at Barnard College, which ended in disaster when I got a C- in organic chemistry. 

I eventually started writing and found my way to Forbes Magazine at 24 as a fact checker. Forbes was much more influential at the time and was always being sued by rich people, so the fact-checking process was very important and a great way to reverse-engineer things. 

Business and economics were far less crowded than politics. But business is much more interesting and understandable because it has real metrics, as opposed to politics, which is a lot of opinion. 

Your subjects are quite broad. How do you decide what to write about? 

Two or three themes have galvanized me. Follow the money: Where’s the money? Where’s the power? 

A few years ago, I realized a tremendous amount of capital had flowed from finance into tech. Tech has become the place where money and power live. That led me to write my second book, Don’t Be Evil, about hyper-concentration with the Big Three. 

The other criterion is the concentration of power. Where there’s a lot of concentration, there tends to be risk. Another theme that interests me is when markets do not price risk effectively. I find interesting stories when you look at not what’s going right but what might go wrong. This is why insurance pricing interests me. Insurance is at the core of all these risk vectors, from climate to macroeconomic changes to monetary policy to tech changes. 

Take Miami. It fascinates me that they’re building multi-million dollar condos in places that are underwater. Understanding risk can lead to interesting stories and interesting investment opportunities. 

Is anything being overlooked in markets right now?

Two things aren’t necessarily well understood: supply chains and supply chain risk. Western companies touch Chinese interests in various ways, for instance, and many aren’t aware of it. 

We’re going into a whole new world for businesses to operate after the end of cheap money, cheap energy, and cheap labor. That’s all going away. I’m not sure people can get their brains around the shift. 

What do you think about the ever-growing role and influence of Big Tech?

I’ve been a bit of a Cassandra on market corrections, but I thought the big one was coming for some time. We haven’t seen this kind of corporate concentration since the Gilded Age. The big companies today are adding more and more market caps, but they’re creating fewer jobs relative to their market caps.  

There’s a complete pulling away of Wall Street and Main Street. You have a handful of firms doing very well. Still, you have a country that’s sort of just muddling along. Despite the kind of moderate wage inflation that we've seen, workers may be doing less well on a real basis because all the things that make you middle class — housing, education, health care — have been rising at triple the core inflation rate.

This is a paradigm that, frankly, can’t go on forever. We’ve propped up markets with low interest rates for 40 years, which has begun to change. But let’s face it: Rates are still nowhere near the double digits I grew up with in the 70s. I remember gas lines. I remember my parents putting away so much money for emergencies. And yet today, amid the rising market, half the people in America can’t rustle up $1,000 in a pinch. That’s dangerous to me. 

Why hasn’t the bubble burst, then?

Monetary and fiscal stimulus helps. But housing affordability has become a real issue, and it’s worth paying close attention to.

We’re also potentially going to see a major pivot. Will the U.S. Dollar be the global reserve currency? There are contenders out there, including crypto. 

My husband thinks I’m crazy. He’s like, just buy QQQ. Sometimes, I feel like the only person holding gold and some bonds. I’m not a gold bug by any means — it’s not a productive asset — but I think the dollar picture might not hold forever. 

Much of the market euphoria of late is tied to artificial intelligence. You’ve written about how investors might want to temper their expectations here amid the hype. Why? 

We’ll get some productivity shifts from AI. But when I think about the Industrial Revolution, which played out over 70 years, there were booms and busts, and companies went under. Warren Buffett once told me that he doesn’t like edgy tech investments because even if you know what will happen in the world, you don’t know which of the 800 companies out there will be the winner. 

With AI, Nvidia seems to be the winner for now. But to me, it’s at a level that has to be corrected. 

The narrative right now is that AI will change the world. If you don’t believe that, you’re a dummy. But that’s classic Kindleberger bubble behavior: a linear storyline not backed up by many facts. I don’t think AI euphoria can keep these valuations high forever. 

The journalism industry has faced major headwinds in recent decades. How do you assess what you’ve seen at the FT and broadly?

There are two business models right now. One is the scale model: The New York Times has about 10 million paid subscribers, so they’ve reached escape velocity. The FT model is the high-end subscription model, which I think is the safest model. We have a high paywall, and people know the product is worth every penny. Many of our journalists are former investors, professors, or philosophers. We have a lot of brain power, and people are allowed to be creative. 

You’ve written about the cozy relationship between Wall Street and Washington. Can the average American expect this to continue?

The Biden Administration has turned up the heat on antitrust because it’s the easiest, fastest hack into the money culture. Lobbying is such a huge thing. Some regulators aren’t fooling around. They want to make markets safer and better, and they want them to work the way they should, with more competition. 

One of your books discusses the benefits and need for localized economies. What sort of challenges do you see in getting back to strong local economies in the U.S.?

Here’s an example: I’ve been talking with the Commerce Department, chip makers, and educators in New York State because they’re getting a big dump of money for chips. But the talent pool isn’t there because those areas have been so hallowed out.

We must start from scratch and recraft how we train people. Otherwise, I fear we’ll have a boom and bust like the energy sector, where everyone goes into, then leaves it. Building a talent pipeline is a big deal in these economies. 

One challenge we face in our liberal democracy is short-termism. We plan for two or four years, and it’s tough when most planning is done around the four-year presidential cycle.

What notable investors have you interviewed over the years? 

Warren Buffett, Carl Icahn, Bill Ackman, and Bill Gross, to name a few. 

Dive deeper

You can follow Rana on X (formerly Twitter), follow her work at the FT, visit her website, or check out her excellent books.

See you next time!

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