“I wanted to be a doctor, but my dad wants me to be a TikTok influencer”– the generation after Gen Z

Me back in 2020 at @pikbakinghouse store, trying to sell Hawaiian Papaya Ci Mehong Style.

In recent months, commodities like nickel, bauxite, and even seaweed have dominated headlines and filled the election debate, but one commodity stands out among the rest, and it’s not what you might expect: followers.

The realization hit home when President Joko Widodo began engaging influencers during the 2019 election. Suddenly, it became clear that social media followers were a valuable commodity, perhaps one of the most crucial in today’s digital age.

Fast forward to now, and the importance of followers has reached unprecedented heights. This trend is especially evident in the lead-up to the 2024 election, with many candidates incorporating follower count into their campaign strategies. Some are even going so far as to recruit celebrities and their spouses as legislative candidates, leveraging their massive social media followings.

What’s intriguing is how this trend extends to unexpected individuals, like my friend’s mom, Tjioe Nofia Handayani, affectionately known as Ci Mehong. Despite her seemingly niche market of selling high-end goods like geoduck and abalone, her years of dedication and countless social media posts have amassed her nearly 400,000 Instagram followers and over 420,000 on TikTok. For once, this might just be the best way to capitalize on the massive followers that she has.

This phenomenon has prompted some to reconsider traditional paths to influence and power. While I have other friends of which many have grown up in families entrenched in politics, the allure of social media influence may signal a new era in politics and beyond.

Interestingly, this shift in focus towards digital influence might explain why consumer industries, typically buoyed by election cycles, haven’t seen the expected boost. Instead, much of the campaign funds are likely being funneled into digital marketing and endorsements, capitalizing on the power of this new hot commodity.

So, perhaps the next time a member of Gen Z expresses aspirations to own a nickel or gold mine, they might consider the potential of becoming an influencer instead. After all, in this digital age, followers aren’t just numbers; they’re pure currency, paving the way to fame, fortune, and influence. It’s a whole new frontier where likes and shares hold more power than gold nuggets.

Danzel Aryo Soerjohadi

Investments at Heyokha Brother


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“I wanted to be a doctor, but my dad wants me to be a TikTok influencer”– the generation after Gen Z

Me back in 2020 at @pikbakinghouse store, trying to sell Hawaiian Papaya Ci Mehong Style.

In recent months, commodities like nickel, bauxite, and even seaweed have dominated headlines and filled the election debate, but one commodity stands out among the rest, and it’s not what you might expect: followers.

The realization hit home when President Joko Widodo began engaging influencers during the 2019 election. Suddenly, it became clear that social media followers were a valuable commodity, perhaps one of the most crucial in today’s digital age.

Fast forward to now, and the importance of followers has reached unprecedented heights. This trend is especially evident in the lead-up to the 2024 election, with many candidates incorporating follower count into their campaign strategies. Some are even going so far as to recruit celebrities and their spouses as legislative candidates, leveraging their massive social media followings.

What’s intriguing is how this trend extends to unexpected individuals, like my friend’s mom, Tjioe Nofia Handayani, affectionately known as Ci Mehong. Despite her seemingly niche market of selling high-end goods like geoduck and abalone, her years of dedication and countless social media posts have amassed her nearly 400,000 Instagram followers and over 420,000 on TikTok. For once, this might just be the best way to capitalize on the massive followers that she has.

This phenomenon has prompted some to reconsider traditional paths to influence and power. While I have other friends of which many have grown up in families entrenched in politics, the allure of social media influence may signal a new era in politics and beyond.

Interestingly, this shift in focus towards digital influence might explain why consumer industries, typically buoyed by election cycles, haven’t seen the expected boost. Instead, much of the campaign funds are likely being funneled into digital marketing and endorsements, capitalizing on the power of this new hot commodity.

So, perhaps the next time a member of Gen Z expresses aspirations to own a nickel or gold mine, they might consider the potential of becoming an influencer instead. After all, in this digital age, followers aren’t just numbers; they’re pure currency, paving the way to fame, fortune, and influence. It’s a whole new frontier where likes and shares hold more power than gold nuggets.

Danzel Aryo Soerjohadi

Investments at Heyokha Brother


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As an analyst, my days are filled with spreadsheets and data, a routine that ticks away relentlessly across 52 weeks of the year. But once annually, I step into a different role – The Fed… of the afterlife.

Or so my late-grandpa used to tell me. Every year I would gather around with my family, and we would celebrate Chinese New Year together. Aside from our family secret soup recipe (which I annually make, after the passing of my grandma), we also did some other things including “printing money”.

We would fold this yellowish broken white paper with silver rectangles in a certain way that it resembled a “boat” or “gold”. After hours of folding, we would then pray and burn these money, to “send it to heaven” for Mak Cho and Kong Cho, as he used to say. Now that he passed away, we are sending it to him and my grandma as well.

My grandpa, an enthusiast in economics used to pass down his vast knowledge in economics in the simplest way for young-Aryo to understand. One in particular that I remember on top of my head was:

“at times when life is hard, and there is war and crisis, hold into gold. You see, this paper money? You can rip it, this stock paper? You can rip it. But this gold? Stays.”

Surely an oversimplification of the complex economy, but his love for economics and business actually makes me interested in pursuing this career as well. His vast understanding about economics never cease to amaze me.

This used to be adult work; they would talk about business, economy, educations, Perkutut bird and Lo Han fish (yes, this was around two decades ago) while their hands would elegantly fold the papers, turning it into the desired shape. The kids? We would try to make some before giving up after 3 “monies” because it took us 5 minute to make one, with the “acceptance rate” of < 30% by the Chair of The Fed (read: my grandpa).

Now that I am an adult, with a printing prowess of 20 seconds per “money” and an acceptance rate of 95%, I’ve earned my place at the table alongside my brother and cousins. And with this newfound status comes the opportunity to contribute to our familial discussions—a privilege that prompts today’s question of the day:

“Wouldn’t Engkong appreciate receiving his ‘money’ stash 4-6 months ahead of Chinese New Year? If every family floods ‘heaven’ with these offerings simultaneously, wouldn’t it trigger some serious afterlife inflation? Perhaps next year, we should dispatch them earlier, allowing Engkong to dabble in the ALSX (After Life Stock Exchange) and rake in even more celestial riches!”


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As an analyst, my days are filled with spreadsheets and data, a routine that ticks away relentlessly across 52 weeks of the year. But once annually, I step into a different role – The Fed… of the afterlife.

Or so my late-grandpa used to tell me. Every year I would gather around with my family, and we would celebrate Chinese New Year together. Aside from our family secret soup recipe (which I annually make, after the passing of my grandma), we also did some other things including “printing money”.

We would fold this yellowish broken white paper with silver rectangles in a certain way that it resembled a “boat” or “gold”. After hours of folding, we would then pray and burn these money, to “send it to heaven” for Mak Cho and Kong Cho, as he used to say. Now that he passed away, we are sending it to him and my grandma as well.

My grandpa, an enthusiast in economics used to pass down his vast knowledge in economics in the simplest way for young-Aryo to understand. One in particular that I remember on top of my head was:

“at times when life is hard, and there is war and crisis, hold into gold. You see, this paper money? You can rip it, this stock paper? You can rip it. But this gold? Stays.”

Surely an oversimplification of the complex economy, but his love for economics and business actually makes me interested in pursuing this career as well. His vast understanding about economics never cease to amaze me.

This used to be adult work; they would talk about business, economy, educations, Perkutut bird and Lo Han fish (yes, this was around two decades ago) while their hands would elegantly fold the papers, turning it into the desired shape. The kids? We would try to make some before giving up after 3 “monies” because it took us 5 minute to make one, with the “acceptance rate” of < 30% by the Chair of The Fed (read: my grandpa).

Now that I am an adult, with a printing prowess of 20 seconds per “money” and an acceptance rate of 95%, I’ve earned my place at the table alongside my brother and cousins. And with this newfound status comes the opportunity to contribute to our familial discussions—a privilege that prompts today’s question of the day:

“Wouldn’t Engkong appreciate receiving his ‘money’ stash 4-6 months ahead of Chinese New Year? If every family floods ‘heaven’ with these offerings simultaneously, wouldn’t it trigger some serious afterlife inflation? Perhaps next year, we should dispatch them earlier, allowing Engkong to dabble in the ALSX (After Life Stock Exchange) and rake in even more celestial riches!”


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That day, I strolled along the main road of Cikini around Menteng. Jakarta’s weather was neither too hot nor rainy. It seemed as if the capital was in a good mood.

Quietly, I admired the colonial architecture still present in the Cikini area. The cafe’s interior and the sidewalk were only separated by a glass window. I began to imagine how Dutch ladies in that era would leisurely drink tea, sip coffee, and exchange gossip, without the rush of work or the immediacy of WA messages or emails demanding immediate responses. Honestly, in that moment, a feeling of jealousy emerged within me.

Engrossed in my own thoughts, out of nowhere, an old man approached and said:

“Sir, I’m actually embarrassed to say… I need a little bit of money to go home by train from Gondangdia station. But my wallet is completely empty, sir. Please help me get home.”

I sensed a tone of despair from the man when he showed me his tattered, empty wallet.

Perhaps due to my preoccupied mind, I automatically mustered a “Sorry, sir…”, assuming it was another one of those frauds in my beloved Jakarta.

As if he could read my mind, the slight look of desperation on the man’s face immediately turned into one of disappointment as he apologised, “I’m sorry for disturbing you, sir… I really am.”

Just like that, the man shook his head and walked away. It was hard to guess why the man shook his head. What was he feeling? Who knows?

About five minutes later, a wave of regret slowly washed over me. I felt something odd, something unusual. The man didn’t force me. In fact, he apologised. A single glance at his eyes confirmed that he was embarrassed to do so. Or maybe he’s a great actor. Who knows?

Stricken with confusion and regret, I turned around to look for the man. But he had disappeared, as if he were a ninja.

So I let out a sigh, turned around again, and continued my journey. However, this time, I didn’t gaze at the beautiful Dutch-styled window displays along Cikini road. The only thing I could picture was the man’s gloomy face, which continued to resurface in my mind. I kept asking myself, “What if the man really couldn’t come home?”

I should have followed my heart more often. Occasionally, I ought to try listening to my inner voice and extend a helping hand to those suffering like the man. However, in my case, it was far too late now.

At times, the fast-paced lifestyle of being a “Jakarta person” can numb our conscience, credited to our frequent experiences of deception and dishonesty. The fear of being taken advantage of often compels us to shut ourselves off from our inner voice. I found myself in a moment of silence, deeply contemplative. However, this time, it wasn’t about the Dutch ladies.

This time, my thoughts shifted to a culture that we face daily. In an organisation whose culture focuses on office politics and backstabbing, members would be busy “building gates” to fortify themselves. In this survival mode, our inner voice often gets ignored. But so what?

On the other hand, in an organisation where members genuinely care for each other and sincerely communicate with each other, we become part of the lives of fellow members of the organisation- in other words, a true community. We all yearn to be part of something greater than ourselves, feel safe and happy, and dare to be ourselves.

This courage to “be ourselves” comes down to the desire to build bridges instead of gates. It involves listening to the whispers of the heart that keep us from becoming overly cautious “Jakarta people”. These whispers from the heart make us willing to be attentive listeners, opening ourselves to the stories of our neighbours.

I try to remind myself that listening with genuine attention and appreciation is the key to good social relationships. It is the foundation for building social bridges—pathways that lead us to happiness, success, good health, and the many joys life has to offer.

Written by Wuddy Warsono, CFA


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That day, I strolled along the main road of Cikini around Menteng. Jakarta’s weather was neither too hot nor rainy. It seemed as if the capital was in a good mood.

Quietly, I admired the colonial architecture still present in the Cikini area. The cafe’s interior and the sidewalk were only separated by a glass window. I began to imagine how Dutch ladies in that era would leisurely drink tea, sip coffee, and exchange gossip, without the rush of work or the immediacy of WA messages or emails demanding immediate responses. Honestly, in that moment, a feeling of jealousy emerged within me.

Engrossed in my own thoughts, out of nowhere, an old man approached and said:

“Sir, I’m actually embarrassed to say… I need a little bit of money to go home by train from Gondangdia station. But my wallet is completely empty, sir. Please help me get home.”

I sensed a tone of despair from the man when he showed me his tattered, empty wallet.

Perhaps due to my preoccupied mind, I automatically mustered a “Sorry, sir…”, assuming it was another one of those frauds in my beloved Jakarta.

As if he could read my mind, the slight look of desperation on the man’s face immediately turned into one of disappointment as he apologised, “I’m sorry for disturbing you, sir… I really am.”

Just like that, the man shook his head and walked away. It was hard to guess why the man shook his head. What was he feeling? Who knows?

About five minutes later, a wave of regret slowly washed over me. I felt something odd, something unusual. The man didn’t force me. In fact, he apologised. A single glance at his eyes confirmed that he was embarrassed to do so. Or maybe he’s a great actor. Who knows?

Stricken with confusion and regret, I turned around to look for the man. But he had disappeared, as if he were a ninja.

So I let out a sigh, turned around again, and continued my journey. However, this time, I didn’t gaze at the beautiful Dutch-styled window displays along Cikini road. The only thing I could picture was the man’s gloomy face, which continued to resurface in my mind. I kept asking myself, “What if the man really couldn’t come home?”

I should have followed my heart more often. Occasionally, I ought to try listening to my inner voice and extend a helping hand to those suffering like the man. However, in my case, it was far too late now.

At times, the fast-paced lifestyle of being a “Jakarta person” can numb our conscience, credited to our frequent experiences of deception and dishonesty. The fear of being taken advantage of often compels us to shut ourselves off from our inner voice. I found myself in a moment of silence, deeply contemplative. However, this time, it wasn’t about the Dutch ladies.

This time, my thoughts shifted to a culture that we face daily. In an organisation whose culture focuses on office politics and backstabbing, members would be busy “building gates” to fortify themselves. In this survival mode, our inner voice often gets ignored. But so what?

On the other hand, in an organisation where members genuinely care for each other and sincerely communicate with each other, we become part of the lives of fellow members of the organisation- in other words, a true community. We all yearn to be part of something greater than ourselves, feel safe and happy, and dare to be ourselves.

This courage to “be ourselves” comes down to the desire to build bridges instead of gates. It involves listening to the whispers of the heart that keep us from becoming overly cautious “Jakarta people”. These whispers from the heart make us willing to be attentive listeners, opening ourselves to the stories of our neighbours.

I try to remind myself that listening with genuine attention and appreciation is the key to good social relationships. It is the foundation for building social bridges—pathways that lead us to happiness, success, good health, and the many joys life has to offer.

Written by Wuddy Warsono, CFA


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During the holiday season, I spent Christmas playing golf with my old man and my not so little brother—a tradition we cherished back in my high school and college days, though less frequent now. Our family used to gather for dinner daily, but with everyone caught up in weekday and weekend commitments, those moments have become rare. My brother, pursuing a law degree at Universitas Indonesia, has followed my footsteps into the realm of competitions, while I delved into equity research, he opts for moot court competitions, filling his days sometimes even to weekends.

The scorching sun failed to deter over 50 golfers from joining us on the course that day, with more than four flights ahead of us, slowing our pace. Surprisingly, this delay allowed us to engage in more conversations, a silver lining despite the temperature reaching 35 degrees. Exhausted as we appeared, our caddies, Lydia and Sari, kindly offered us a taste of the variety of food they had on hand—a mini-market on wheels. Jackfruits, rujak, batagor, siomay, iced tea, and more – a tempting array. I couldn’t help but think, “Ah, the impulsive spender,” wondering if they were avid Shopee or TikTok users.

Thus, began my inquiry into the eCommerce habits of our caddies on the 7th hole. Lydia and Sari, Shopee enthusiasts, favoured it primarily for ShopeePayLater, aiding them in managing their monthly cash flow. Interestingly, when it came to TikTokShop (TTS) and Shopee, they leaned towards TTS. Their rationale? Spending 4-5 hours daily on TikTok, they appreciated influencers seamlessly incorporating product details in their videos, creating an impulsive consumer experience. These purchases vary from cute dresses, kitchen equipment, beauty products (make up, micellar water, eyelash and brow pencils), even food and snacks.

The financing aspect emerged as a significant factor. They revealed that paying in bulk at the end of the month suited them. Spending around IDR 1-2 million monthly, which accounted for a substantial portion of their assumed monthly income of IDR 6-8 million,  made up 10-30% of their earnings. When asked about credit cards, Lydia and Sari found the idea daunting, fearing hidden fees. According to Sari, the fees for their current Paylater service were minimal (which is probably not the case, as it accounts for 5-10% of loan taken). Interestingly, Paylater limit amount also acted as a status symbol – When Sari said that her Shopee Paylater limit was IDR 12 million, Lydia proudly stated  her IDR 17 million limit, emphasising her timely payments.

Curiosity led me to ask, “Are you eagerly awaiting a Paylater option for TikTok?” Their response was a resounding “Of course!” They believed it could be a game changer – a no brainer reason to change to TTS.

Wow I thought. Imagine potentially prompting a massive migration of Shopee and Lazada users to TTS. The prospect of doubling GMV to USD 12 billion suddenly seemed conservative. Perhaps GOTO had struck gold with this collaboration, I mused.

While I pondered these eCommerce dynamics, my dad achieved something equally remarkable – a Birdie! We are mere 20-30 handicap golfers, this is a big deal for us. Distracted momentarily, I returned my focus to the game.

But really, the GOTO and TikTok partnership was probably akin to an Albatross or, at the very least, an Eagle 🦅.

Danzel Aryo Soerjohadi

Investments at Heyokha Brothers


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During the holiday season, I spent Christmas playing golf with my old man and my not so little brother—a tradition we cherished back in my high school and college days, though less frequent now. Our family used to gather for dinner daily, but with everyone caught up in weekday and weekend commitments, those moments have become rare. My brother, pursuing a law degree at Universitas Indonesia, has followed my footsteps into the realm of competitions, while I delved into equity research, he opts for moot court competitions, filling his days sometimes even to weekends.

The scorching sun failed to deter over 50 golfers from joining us on the course that day, with more than four flights ahead of us, slowing our pace. Surprisingly, this delay allowed us to engage in more conversations, a silver lining despite the temperature reaching 35 degrees. Exhausted as we appeared, our caddies, Lydia and Sari, kindly offered us a taste of the variety of food they had on hand—a mini-market on wheels. Jackfruits, rujak, batagor, siomay, iced tea, and more – a tempting array. I couldn’t help but think, “Ah, the impulsive spender,” wondering if they were avid Shopee or TikTok users.

Thus, began my inquiry into the eCommerce habits of our caddies on the 7th hole. Lydia and Sari, Shopee enthusiasts, favoured it primarily for ShopeePayLater, aiding them in managing their monthly cash flow. Interestingly, when it came to TikTokShop (TTS) and Shopee, they leaned towards TTS. Their rationale? Spending 4-5 hours daily on TikTok, they appreciated influencers seamlessly incorporating product details in their videos, creating an impulsive consumer experience. These purchases vary from cute dresses, kitchen equipment, beauty products (make up, micellar water, eyelash and brow pencils), even food and snacks.

The financing aspect emerged as a significant factor. They revealed that paying in bulk at the end of the month suited them. Spending around IDR 1-2 million monthly, which accounted for a substantial portion of their assumed monthly income of IDR 6-8 million,  made up 10-30% of their earnings. When asked about credit cards, Lydia and Sari found the idea daunting, fearing hidden fees. According to Sari, the fees for their current Paylater service were minimal (which is probably not the case, as it accounts for 5-10% of loan taken). Interestingly, Paylater limit amount also acted as a status symbol – When Sari said that her Shopee Paylater limit was IDR 12 million, Lydia proudly stated  her IDR 17 million limit, emphasising her timely payments.

Curiosity led me to ask, “Are you eagerly awaiting a Paylater option for TikTok?” Their response was a resounding “Of course!” They believed it could be a game changer – a no brainer reason to change to TTS.

Wow I thought. Imagine potentially prompting a massive migration of Shopee and Lazada users to TTS. The prospect of doubling GMV to USD 12 billion suddenly seemed conservative. Perhaps GOTO had struck gold with this collaboration, I mused.

While I pondered these eCommerce dynamics, my dad achieved something equally remarkable – a Birdie! We are mere 20-30 handicap golfers, this is a big deal for us. Distracted momentarily, I returned my focus to the game.

But really, the GOTO and TikTok partnership was probably akin to an Albatross or, at the very least, an Eagle 🦅.

Danzel Aryo Soerjohadi

Investments at Heyokha Brothers


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When is the sunset most colourful? After a normal day with some clouds, the hottest day with scorching hot sun, or after a heavy storm by the beach the whole day?

I enjoyed my time in Bali reading a lot of books, some on investing, philosophy, and longevity. Slow times like this I like. In the fast-moving investment world, slow thinking is rare. At Heyokha, we take this very seriously. Speeding through at 100km/h to the wrong direction would just make things worse. We took one week to rethink our investment strategy, philosophy, and operations, to come back stronger than ever. 

One of the ideas that resonated with me as I sip my pina colada, reading The Most Important Thing by Howard Marks is that the highest return is made after the crisis. Howard Marks was notorious for investing USD 600mn per day for 10 days straight during the 2008 crisis, which made him one of the most profitable investments over his career. Superior investors are contrarians, second level thinkers, immutable by emotions – theirs and the markets, yet flexible thinkers. To invest during and after a crisis, when the outlook seems bleak or chaotic even usually turns out to provide the best return for investors. 

On my last day, Bali was hit with a heavy storm throughout the day. Just when the rain slowed down, I took a quick run to the beach while my friends and most of the population stayed tuck under their comfortable blanket cursing at the storm. I arrived just in time to see the most magnificent hues of yellow, orange, pink, and purple in the sky. As I sat down by the beach, I thought: Indeed, the most colourful sunset is right after a chaotic storm, my biggest return of the trip.

Danzel Aryo Soerjohadi

Investments at Heyokha Brothers


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When is the sunset most colourful? After a normal day with some clouds, the hottest day with scorching hot sun, or after a heavy storm by the beach the whole day?

I enjoyed my time in Bali reading a lot of books, some on investing, philosophy, and longevity. Slow times like this I like. In the fast-moving investment world, slow thinking is rare. At Heyokha, we take this very seriously. Speeding through at 100km/h to the wrong direction would just make things worse. We took one week to rethink our investment strategy, philosophy, and operations, to come back stronger than ever. 

One of the ideas that resonated with me as I sip my pina colada, reading The Most Important Thing by Howard Marks is that the highest return is made after the crisis. Howard Marks was notorious for investing USD 600mn per day for 10 days straight during the 2008 crisis, which made him one of the most profitable investments over his career. Superior investors are contrarians, second level thinkers, immutable by emotions – theirs and the markets, yet flexible thinkers. To invest during and after a crisis, when the outlook seems bleak or chaotic even usually turns out to provide the best return for investors. 

On my last day, Bali was hit with a heavy storm throughout the day. Just when the rain slowed down, I took a quick run to the beach while my friends and most of the population stayed tuck under their comfortable blanket cursing at the storm. I arrived just in time to see the most magnificent hues of yellow, orange, pink, and purple in the sky. As I sat down by the beach, I thought: Indeed, the most colourful sunset is right after a chaotic storm, my biggest return of the trip.

Danzel Aryo Soerjohadi

Investments at Heyokha Brothers


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“Then the seven years of plenty which were in the land of Egypt ended, and the seven years of famine began to come, as Joseph had said. The famine was in all lands, but in all the land of Egypt there was bread.”
Genesis 41: 53-54

Biagio d’Antonio’s The Story of Joseph (c.1485)

The disturbing almanack

In the past, that is not too distant was a decade of abundance, peace, and order. Food, energy, resources, and capital were plenty and affordable if not cheap by today’s standards. Today, we have the exact reverse.

Six months ago, we wrote about the rising food security risk globally (link). Since then, food prices have cooled down in the wake of recessionary fears driven by the global central bank tightening cycle. The FAO food price index has fallen by 14.7% in USD terms from its peak in April 2022.

The question: is the food security risk now no longer a concern?

Anecdotal evidence of the rising popularity of food-protectionism measures would suggest the contrary. In 2H2022, Malaysia banned chicken export, India restricted the export of rice, and recently Mexico halted 24 key food exports.

Furthermore, the recent surge of the US dollar actually has worsened the food security risk for many countries. At the same time whereby the FAO food price index fell by 14.7 percent from its March 2022 peak, the dollar index rose by 21.5 percent. This means that most countries experienced a 3.65 percent higher food prices. It was no relief.

Furthermore, we still identify three major supply-side overhangs for food security: (1) the high possibility of a third consecutive La Nina; (2) escalation of political risk in Europe; (3) gas-crisis-driven fertiliser cost.

While the almanack that we provide might feel disturbing if not stomach-churning, we think that the mounting pressures of food security could signify the value of food technology. A vertical that has perhaps been taken for granted in the decades of plenty. Ironically, it is also the sector that allows humanity to thrive and defy the infamous Malthusian catastrophic prophecy.

Malthusian prophecy and its 180-degree reality

Students of economics would have been familiar with the Malthusian Trap. The 18th-century British philosopher and economist Thomas Malthus was well-known by the history book for his grim prediction in 1798. Malthus argued that food production will not be able to keep up with the growth of human populations. As a result, disease, famine, war, and calamity are seen as humanity’s inescapable fate.

Proponents of this school of thought might resort to an extreme solution to this problem like extreme population control. This reminds us of Thanos, the villain of the Marvel Universe, and his conquest to wipe out one-half of the universe’s population to maintain prosperity and peace in the galaxy.

Fortunately, the reality has fared better than the doomsday prediction. Humanity has prevailed and continued to expand the frontiers of welfare. For instance, Our World in Data showed that life expectancy has more than doubled from 29 years old in the 1800s to 71 years old in 2015. At the same time, the global population went up sevenfold from about 1 billion to 8 billion in 2022.

Moreover, data from the 1820s to 2015 suggests that the poverty eradication curve is getting steeper rather than flatten. The share of the global population that lives in poverty plunged from over 94 percent in 1820 to 9.6% percent in 2015.

These are signs that indicate the world’s productivity has exceeded the growth of the population. What went different from Malthus’ view?

The uncounted factors that matter: the man-made miracles

Robert Malthus’ theory of growth lacks respect for the fundamental reality of technological progress. This is implied by assuming that food production would only be growing at an arithmetic progression. In reality, innovation and technology have pushed the boundaries and changed the course of history. Especially in the front of productivity.

Three foundational food production technologies allow the humanities to dodge the Malthusian trap:

1. Fertilizers

One of the cornerstones of modern food production lies in ammonia which contains nitrogen and hydrogen. Nitrogen is one of the most important crop nutrients, a secret sauce of yield improvement. Ammonia can effectively bind nitrogen to be applied directly on crops or to be processed further for fertilisers like urea, DAP, and NPK.

The advent of haber-bosch process in 1908 allowed the synthetic production of ammonia. ­It is a game-changer and worthy to hold the title of one of the greatest inventions of the 20th century. Erisman et al. (2012) estimated that the existence of nitrogen fertilisers have helped to feed 48 percent of the global population in 2008. In today’s number, that is equal to 3.8 billion people.

Back in March 2022 blog (link), we discussed ammonia as the main feedstock of fertiliser was caught in a perfect storm of geopolitical conflict, energy crisis, tight agricultural market, and supply chain constraint.

So far, we see a minimum disentanglement of these factors. As such, that might keep ammonia prices at elevated heights for a long time. Note that fertiliser crisis could cause a decline in the harvest that will worsen the global food stock.

2. Seeds technology

Source: Heyokha Research, USGS, Goldman Research

You reap what you saw. Seeds technology plays a vital role in fulfilling global food needs mainly through variants of better vigour and productivity.

In the case of the US, seed technologies have played an enormous role in jacking up the corn yield from merely 2 tons per hectare to 12 tons per hectare, a six-fold increase. This is a perfect showcase of what 160 years’ worth of long and continuous research effort could bring, defying the Malthusian trap.

In that regard of such immense research effort and multi-billion research budget, we perceive seeds technology businesses to be something secular whose profits are beyond justifiable for society. Their business enhances the economics of farming and helps feed the world in the process.

The advent of gene editing technologies (CRISPR) and super-computer could expand the frontier of seed technology in form of genetic modified organism (GMO) and genetic-edited (GE) seeds. Recent article from Financial Times (link) reported that gene-editing using CRISPR technology could cut product development cycle (variety development including regulatory approval) from 16.5 years to 5 years and research budget from $115 mn to $ 10.5 mn per product. Compared to GMO, gene editing using CRISPR is more precision in terms of adding or cutting the gene. Nevertheless, the technology mastery is still limited to a few and still in due process for more regulatory acceptance. Genetic-edited crop is the new unexplored frontier.

3. Crop protection

Besides fertilizers, the development of chemicals in crop protection has also contributed to feeding the world. For instance, pesticides could improve crop quality and increase crop yield by 30 percent on average (Bromilow, 2005). Pesticides are not something new, it has been widely used since the last 1940s.

Unfortunately, most crop protection products also require petrochemical-based feedstock. This suggests that a severe and prolonged energy crisis could adversely impact global food security by affecting the affordability and availability of fertilisers and crop protection chemicals. From that point, a vicious cycle in global food security could emerge from the subsequent decline in crop yields.

A difficult but hopeful journey ahead

It has been an adage of the investment world to invest in the pain points. Crop solution companies are essentially the direct solution to the looming food security risk. These companies range from fertilisers, seeds technology, and crop protection chemicals.

Given the R&D barrier of the business and the deeper pockets of the farmers, crop solution companies would be one of the few businesses that can thrive in this era of inflation. Crop solution companies’ pricing power is bound to rise in times like this. It is pretty obvious since crop solution products are the must-have ingredients for farmers to extract the risk premium and the cure to the crisis itself.

Although the short-term outlook might be difficult, the long story of humanity would suggest that this is a beginning of a hopeful tomorrow. Today’s market risk premium unveils the challenges and opportunities that lie ahead of us. It’s been years since capital was substantially directed toward resources, the bedrock of civilization. We believe persistent commodities’ risk premiums will redirect the capital into sectors that become the seeds of the next decade of plenty.

 

Bibliography

Bromillow. (2005). Pesticides. Encyclopedia of Soils in the Environment, Vol. 3, Elsevier, 188-195.

Ritchie, Hannah;. (2017, November 07). How many people does synthetic fertilizer feed? Retrieved from Our World in Data: https://ourworldindata.org/how-many-people-does-synthetic-fertilizer-feed


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“Then the seven years of plenty which were in the land of Egypt ended, and the seven years of famine began to come, as Joseph had said. The famine was in all lands, but in all the land of Egypt there was bread.”
Genesis 41: 53-54

Biagio d’Antonio’s The Story of Joseph (c.1485)

The disturbing almanack

In the past, that is not too distant was a decade of abundance, peace, and order. Food, energy, resources, and capital were plenty and affordable if not cheap by today’s standards. Today, we have the exact reverse.

Six months ago, we wrote about the rising food security risk globally (link). Since then, food prices have cooled down in the wake of recessionary fears driven by the global central bank tightening cycle. The FAO food price index has fallen by 14.7% in USD terms from its peak in April 2022.

The question: is the food security risk now no longer a concern?

Anecdotal evidence of the rising popularity of food-protectionism measures would suggest the contrary. In 2H2022, Malaysia banned chicken export, India restricted the export of rice, and recently Mexico halted 24 key food exports.

Furthermore, the recent surge of the US dollar actually has worsened the food security risk for many countries. At the same time whereby the FAO food price index fell by 14.7 percent from its March 2022 peak, the dollar index rose by 21.5 percent. This means that most countries experienced a 3.65 percent higher food prices. It was no relief.

Furthermore, we still identify three major supply-side overhangs for food security: (1) the high possibility of a third consecutive La Nina; (2) escalation of political risk in Europe; (3) gas-crisis-driven fertiliser cost.

While the almanack that we provide might feel disturbing if not stomach-churning, we think that the mounting pressures of food security could signify the value of food technology. A vertical that has perhaps been taken for granted in the decades of plenty. Ironically, it is also the sector that allows humanity to thrive and defy the infamous Malthusian catastrophic prophecy.

Malthusian prophecy and its 180-degree reality

Students of economics would have been familiar with the Malthusian Trap. The 18th-century British philosopher and economist Thomas Malthus was well-known by the history book for his grim prediction in 1798. Malthus argued that food production will not be able to keep up with the growth of human populations. As a result, disease, famine, war, and calamity are seen as humanity’s inescapable fate.

Proponents of this school of thought might resort to an extreme solution to this problem like extreme population control. This reminds us of Thanos, the villain of the Marvel Universe, and his conquest to wipe out one-half of the universe’s population to maintain prosperity and peace in the galaxy.

Fortunately, the reality has fared better than the doomsday prediction. Humanity has prevailed and continued to expand the frontiers of welfare. For instance, Our World in Data showed that life expectancy has more than doubled from 29 years old in the 1800s to 71 years old in 2015. At the same time, the global population went up sevenfold from about 1 billion to 8 billion in 2022.

Moreover, data from the 1820s to 2015 suggests that the poverty eradication curve is getting steeper rather than flatten. The share of the global population that lives in poverty plunged from over 94 percent in 1820 to 9.6% percent in 2015.

These are signs that indicate the world’s productivity has exceeded the growth of the population. What went different from Malthus’ view?

The uncounted factors that matter: the man-made miracles

Robert Malthus’ theory of growth lacks respect for the fundamental reality of technological progress. This is implied by assuming that food production would only be growing at an arithmetic progression. In reality, innovation and technology have pushed the boundaries and changed the course of history. Especially in the front of productivity.

Three foundational food production technologies allow the humanities to dodge the Malthusian trap:

1. Fertilizers

One of the cornerstones of modern food production lies in ammonia which contains nitrogen and hydrogen. Nitrogen is one of the most important crop nutrients, a secret sauce of yield improvement. Ammonia can effectively bind nitrogen to be applied directly on crops or to be processed further for fertilisers like urea, DAP, and NPK.

The advent of haber-bosch process in 1908 allowed the synthetic production of ammonia. ­It is a game-changer and worthy to hold the title of one of the greatest inventions of the 20th century. Erisman et al. (2012) estimated that the existence of nitrogen fertilisers have helped to feed 48 percent of the global population in 2008. In today’s number, that is equal to 3.8 billion people.

Back in March 2022 blog (link), we discussed ammonia as the main feedstock of fertiliser was caught in a perfect storm of geopolitical conflict, energy crisis, tight agricultural market, and supply chain constraint.

So far, we see a minimum disentanglement of these factors. As such, that might keep ammonia prices at elevated heights for a long time. Note that fertiliser crisis could cause a decline in the harvest that will worsen the global food stock.

2. Seeds technology

Source: Heyokha Research, USGS, Goldman Research

You reap what you saw. Seeds technology plays a vital role in fulfilling global food needs mainly through variants of better vigour and productivity.

In the case of the US, seed technologies have played an enormous role in jacking up the corn yield from merely 2 tons per hectare to 12 tons per hectare, a six-fold increase. This is a perfect showcase of what 160 years’ worth of long and continuous research effort could bring, defying the Malthusian trap.

In that regard of such immense research effort and multi-billion research budget, we perceive seeds technology businesses to be something secular whose profits are beyond justifiable for society. Their business enhances the economics of farming and helps feed the world in the process.

The advent of gene editing technologies (CRISPR) and super-computer could expand the frontier of seed technology in form of genetic modified organism (GMO) and genetic-edited (GE) seeds. Recent article from Financial Times (link) reported that gene-editing using CRISPR technology could cut product development cycle (variety development including regulatory approval) from 16.5 years to 5 years and research budget from $115 mn to $ 10.5 mn per product. Compared to GMO, gene editing using CRISPR is more precision in terms of adding or cutting the gene. Nevertheless, the technology mastery is still limited to a few and still in due process for more regulatory acceptance. Genetic-edited crop is the new unexplored frontier.

3. Crop protection

Besides fertilizers, the development of chemicals in crop protection has also contributed to feeding the world. For instance, pesticides could improve crop quality and increase crop yield by 30 percent on average (Bromilow, 2005). Pesticides are not something new, it has been widely used since the last 1940s.

Unfortunately, most crop protection products also require petrochemical-based feedstock. This suggests that a severe and prolonged energy crisis could adversely impact global food security by affecting the affordability and availability of fertilisers and crop protection chemicals. From that point, a vicious cycle in global food security could emerge from the subsequent decline in crop yields.

A difficult but hopeful journey ahead

It has been an adage of the investment world to invest in the pain points. Crop solution companies are essentially the direct solution to the looming food security risk. These companies range from fertilisers, seeds technology, and crop protection chemicals.

Given the R&D barrier of the business and the deeper pockets of the farmers, crop solution companies would be one of the few businesses that can thrive in this era of inflation. Crop solution companies’ pricing power is bound to rise in times like this. It is pretty obvious since crop solution products are the must-have ingredients for farmers to extract the risk premium and the cure to the crisis itself.

Although the short-term outlook might be difficult, the long story of humanity would suggest that this is a beginning of a hopeful tomorrow. Today’s market risk premium unveils the challenges and opportunities that lie ahead of us. It’s been years since capital was substantially directed toward resources, the bedrock of civilization. We believe persistent commodities’ risk premiums will redirect the capital into sectors that become the seeds of the next decade of plenty.

 

Bibliography

Bromillow. (2005). Pesticides. Encyclopedia of Soils in the Environment, Vol. 3, Elsevier, 188-195.

Ritchie, Hannah;. (2017, November 07). How many people does synthetic fertilizer feed? Retrieved from Our World in Data: https://ourworldindata.org/how-many-people-does-synthetic-fertilizer-feed


Share

Everyone has a plan ‘till they get punched in the mouth. This frequently cited quote by Mike Tyson gains more relevance today. Politicians may aspire with plans to increase their odds of being elected. Greening economy projects, waging war against inequality, exerting political dominance over other countries, and other populist policies are some of the examples. However, all these means nothing if their leadership fails to bring food on the table.

In our past blog (link), we pointed out how supply chain issues, tight agriculture market, energy crisis, and geopolitical tension crystallised in the great rally of ammonia and fertiliser prices. If we consider the factors at play, this might be the warning shot of an upcoming food crisis.

Skyrocketing food prices have been associated with social unrest and we are at all-time high

Source: Lagi, et al. (2011)

It is pretty straight forward why high and volatile food prices could destabilise a society.  Food is both essential and have a significant share of our daily spending. Based on 2018 Euromonitor data, food on average accounted for 28.7% of  consumer spending in 51 countries throughout the globe. For some countries like Bangladesh, Myanmar, Kenya and Ethiopia, this figure can be as high as 53% to 59% .

There are anecdotal evidence in the past whereby food problems led into social unrest. In 1789, the famine led French peasants to storm the Bastille prison and ended up overturning the French empire. In the modern era, the high food prices in 2008 and 2011 sparked numerous civil unrests in the Middle East.

Before the recent boom, commodities were the sucker’s bet of the last decade. At the start of its gracious fall in the 2010s, the substantial commodity investments in the 2000s left the world with abundant stocks of commodities. This time around, the prolonged relaxed financial conditions and minimum investments in this sector drift the world into the opposite setting. There is a lot of liquidity, yet so few goods.

If we consider commodity as a currency of its own, we are seeing where Gresham’s rule of bad money drives out good money in action. The rapid expansion of liquidity without a respective production expansion of commodities led to the appreciation of the latter.

Today, food prices already exceeded the highs of 2011 and are yet to lose their steam.

Source: Bloomberg

Countries are taking food protectionism measures to stabilise domestic food prices

We find the severity of the potential food crisis cannot be underestimated. Case in point would be the magnitude of Russia-Ukraine war in escalating this matter.

Both Russia and Ukraine play significant roles in the agriculture or fertiliser market. Russia is the biggest exporter of wheat (18% of global export) and a major exporter of sunflower oil (18% of global export) and fertilizers (20% of global ammonia export). On the other hand, Ukraine is also a major exporter of wheat (15% of global export) and the biggest sunflower oil exporter (37.5% of global export).

The prolonged Russia-Ukraine conflict adversely impacts both near and long-term supply. Near-term supply has been affected because of the logistical hurdles made by the war. The future supply is at risk because Ukraine might miss this spring planting season. The ramifications of sudden drop in food exports at a time of tight stock will be painful and costly to bear by the rest of the world.

For some countries, such as those in the African continent, food affordability and availability will become major issues. From the following graph, we could see how Russia and Ukraine war could jeopardise the procurement of wheat in Africa.

Source: UNCTAD (March 2022)

This concern over food insecurity gained the spotlight in the world’s most populated country, China. During the 13th National Committee of the Chinese People’s Political Consultative Conference on 7 March 2022, China President Xi Jinping underscored the importance of food security and ordered greater self-reliance in its production. Below was his speech as quoted by South China Morning Post:

Vigilance in food security must not slacken, we must not think that food ceases being an issue after industrialisation, and we cannot count on international supplies to solve the problem… We must plan ahead by adhering to the principles of domestic production and self-reliance while ensuring an appropriate level of imports and technology-backed development… the rice bowls of the Chinese people are filled with Chinese grain”

There is no smoke without fire. The mounting food security risk is even more visible with the spreading food protectionism measures. China, Russia, Ukraine, Algeria, Hungary, Moldova, Turkey, Egypt, Serbia, and Indonesia are growing list of countries that curbs food or fertiliser exports.

A resource-rich country like Indonesia may fare better in facing a food crisis

Source: World Bank & United Nations

Indonesia has adequate resiliency in the mounting food insecurity globally. In terms of food production, the country is well-known to have a 59% share in global palm oil production. This vegetable oil is extremely efficient. Palm oil supplies 40% of the world’s vegetable oil demand with only 6% of land used for vegetable oils. These economics made the commodity simply irreplaceable.

Furthermore, the USDA ranked Indonesia as the fourth biggest producer of rice with a 7% global market share. This country is also ranked the twelfth largest producer of corn with 1% global market share.

Given this natural advantage, Indonesia is inherently a net exporter of foods. The skyrocketing price of global food prices would suggest that the country will see its surplus widen. As such, Indonesia should benefit from either relative resiliency in inflation or a widening trade surplus.

According to The Economist’s research on the food security index 2021, Indonesia ranked 37th of 113 countries globally in terms of the availability of food supply. Ample land for production, low volatility of production, and strong food security policies and agency are reasons why Indonesia fared well on this subject.

Furthermore, Indonesia’s food security improvement between 2012 and 2021 ranks 24th among world countries. Based on our past on-the-ground observation, infrastructures development and strengthening of food security policies and enforcement are the reasons for the improvement. We discussed more detail about Indonesia infrastructure development in our Q1 2019 report (link).

We think that Indonesia’s resiliency in food security is pretty much reflected in the marginal food cost increase relative to the global average from 2010-to 2021.

Source: Global Food Security Index (2021)

In the world of commodities shortage and abundant liquidity, those who own the former will stand to benefit. Besides food, Indonesia produces lots of commodities and has been regarded as resource-rich land for decades. How will the booming commodity market affect Indonesia? How it be different this time? Stay tuned to our blog!


Share

Everyone has a plan ‘till they get punched in the mouth. This frequently cited quote by Mike Tyson gains more relevance today. Politicians may aspire with plans to increase their odds of being elected. Greening economy projects, waging war against inequality, exerting political dominance over other countries, and other populist policies are some of the examples. However, all these means nothing if their leadership fails to bring food on the table.

In our past blog (link), we pointed out how supply chain issues, tight agriculture market, energy crisis, and geopolitical tension crystallised in the great rally of ammonia and fertiliser prices. If we consider the factors at play, this might be the warning shot of an upcoming food crisis.

Skyrocketing food prices have been associated with social unrest and we are at all-time high

Source: Lagi, et al. (2011)

It is pretty straight forward why high and volatile food prices could destabilise a society.  Food is both essential and have a significant share of our daily spending. Based on 2018 Euromonitor data, food on average accounted for 28.7% of  consumer spending in 51 countries throughout the globe. For some countries like Bangladesh, Myanmar, Kenya and Ethiopia, this figure can be as high as 53% to 59% .

There are anecdotal evidence in the past whereby food problems led into social unrest. In 1789, the famine led French peasants to storm the Bastille prison and ended up overturning the French empire. In the modern era, the high food prices in 2008 and 2011 sparked numerous civil unrests in the Middle East.

Before the recent boom, commodities were the sucker’s bet of the last decade. At the start of its gracious fall in the 2010s, the substantial commodity investments in the 2000s left the world with abundant stocks of commodities. This time around, the prolonged relaxed financial conditions and minimum investments in this sector drift the world into the opposite setting. There is a lot of liquidity, yet so few goods.

If we consider commodity as a currency of its own, we are seeing where Gresham’s rule of bad money drives out good money in action. The rapid expansion of liquidity without a respective production expansion of commodities led to the appreciation of the latter.

Today, food prices already exceeded the highs of 2011 and are yet to lose their steam.

Source: Bloomberg

Countries are taking food protectionism measures to stabilise domestic food prices

We find the severity of the potential food crisis cannot be underestimated. Case in point would be the magnitude of Russia-Ukraine war in escalating this matter.

Both Russia and Ukraine play significant roles in the agriculture or fertiliser market. Russia is the biggest exporter of wheat (18% of global export) and a major exporter of sunflower oil (18% of global export) and fertilizers (20% of global ammonia export). On the other hand, Ukraine is also a major exporter of wheat (15% of global export) and the biggest sunflower oil exporter (37.5% of global export).

The prolonged Russia-Ukraine conflict adversely impacts both near and long-term supply. Near-term supply has been affected because of the logistical hurdles made by the war. The future supply is at risk because Ukraine might miss this spring planting season. The ramifications of sudden drop in food exports at a time of tight stock will be painful and costly to bear by the rest of the world.

For some countries, such as those in the African continent, food affordability and availability will become major issues. From the following graph, we could see how Russia and Ukraine war could jeopardise the procurement of wheat in Africa.

Source: UNCTAD (March 2022)

This concern over food insecurity gained the spotlight in the world’s most populated country, China. During the 13th National Committee of the Chinese People’s Political Consultative Conference on 7 March 2022, China President Xi Jinping underscored the importance of food security and ordered greater self-reliance in its production. Below was his speech as quoted by South China Morning Post:

Vigilance in food security must not slacken, we must not think that food ceases being an issue after industrialisation, and we cannot count on international supplies to solve the problem… We must plan ahead by adhering to the principles of domestic production and self-reliance while ensuring an appropriate level of imports and technology-backed development… the rice bowls of the Chinese people are filled with Chinese grain”

There is no smoke without fire. The mounting food security risk is even more visible with the spreading food protectionism measures. China, Russia, Ukraine, Algeria, Hungary, Moldova, Turkey, Egypt, Serbia, and Indonesia are growing list of countries that curbs food or fertiliser exports.

A resource-rich country like Indonesia may fare better in facing a food crisis

Source: World Bank & United Nations

Indonesia has adequate resiliency in the mounting food insecurity globally. In terms of food production, the country is well-known to have a 59% share in global palm oil production. This vegetable oil is extremely efficient. Palm oil supplies 40% of the world’s vegetable oil demand with only 6% of land used for vegetable oils. These economics made the commodity simply irreplaceable.

Furthermore, the USDA ranked Indonesia as the fourth biggest producer of rice with a 7% global market share. This country is also ranked the twelfth largest producer of corn with 1% global market share.

Given this natural advantage, Indonesia is inherently a net exporter of foods. The skyrocketing price of global food prices would suggest that the country will see its surplus widen. As such, Indonesia should benefit from either relative resiliency in inflation or a widening trade surplus.

According to The Economist’s research on the food security index 2021, Indonesia ranked 37th of 113 countries globally in terms of the availability of food supply. Ample land for production, low volatility of production, and strong food security policies and agency are reasons why Indonesia fared well on this subject.

Furthermore, Indonesia’s food security improvement between 2012 and 2021 ranks 24th among world countries. Based on our past on-the-ground observation, infrastructures development and strengthening of food security policies and enforcement are the reasons for the improvement. We discussed more detail about Indonesia infrastructure development in our Q1 2019 report (link).

We think that Indonesia’s resiliency in food security is pretty much reflected in the marginal food cost increase relative to the global average from 2010-to 2021.

Source: Global Food Security Index (2021)

In the world of commodities shortage and abundant liquidity, those who own the former will stand to benefit. Besides food, Indonesia produces lots of commodities and has been regarded as resource-rich land for decades. How will the booming commodity market affect Indonesia? How it be different this time? Stay tuned to our blog!


Share

Who would’ve thought that someone is willing to pay a hefty price for turds? Although some might find this to be stomach-churning, it is a reality. According to Bloomberg, manure is selling for USD 40 to 70 per ton, an all-time high level since 2012.

Major reasoning behind this phenomenon could be traced from the ongoing fertiliser crisis, especially from one of its key ingredients: ammonia.

Ammonia is a compound of nitrogen and hydrogen (NH3). The high nitrogen component, a key macronutrient for plants, makes ammonia an essential feedstock for all nitrogen-based fertilisers. Alternatively, it can be applied directly to the soil as well.

Based on our study, the dynamic of ammonia market is reflecting today’s problems on multiple fronts, namely: supply chain, agricultural, energy, and geopolitical tension. Its price performance is a perfect example of what could happen when an inelastic demand faces a serious setback in supply.

Perhaps, ammonia could be good long exposure for the ongoing problems in the world. Below is our learning on this matter:

The now deep-pocketed farmers could afford the unprecedented upswings of ammonia price

Source: Bloomberg

The soaring price of ammonia has a profound impact on the agriculture market as fertilisers typically contribute up to 20% of in-farm cash costs. The ammonia market, however, is also affected by the agriculture market as the chemical is their essential derivative demand – 80% of ammonia use case comes from fertiliser.

Given such a relationship, ammonia price can only elevate that much for a considerable time because there are people who are willing to pay for it. In this case, it is the farmers who account for most of the demand.

As of 23 February 2022, the Bloomberg agriculture commodity price index was indicated 67% higher than on the end of 2019 level. The favorable agricultural prices certainly have buoyed the fertiliser market as it deepens farmers’ pockets. Nutrien, the world’s largest plant nutrition producer, sees crops producers’ margin to expand by more than two hundred percent for 2021 and 2022 compared to the 2019 level.

Source: Nutrien

We see the outlook for agricultural commodities to remain bright as the tight market is yet to see relief. Global grains stocks-to-use ratio that indicate the carryover availability to fulfill the full-year demand has been in a free-fall in the last couple of years. The weak prices of 2012-2020 might had disincentivized investments in this space and resulted in a weak production capacity to timely respond to demand.

The combination of economic reopening and stimulus packages during the pandemic is also providing strong support for the demand for agricultural commodities.

Source: Bloomberg

Provided by these circumstances, farmers should be well-incentivised to continue applying fertilizers for maintaining or boosting their production. Especially, when they know that in some parts of the world crop yield might be adversely impacted by La Nina.

It is amazing to see this rock-solid demand could afford multiple setbacks on the supply side.

The supply-side problems have dislocated ammonia market by at least 48%

Normally, ammonia plants are built altogether with the downstream fertiliser plants. The statistics of the International Fertilizers Associations (IFA) indicated only 18.4 mn tons of 185.3 mn tons global capacity production in ammonia was traded globally in 2020. Only 10% of global production was intended for trade, causing the merchant ammonia market prone to disruptions.

Based on our estimate, the current ammonia market’s equilibrium faced a dislocation of at least 48% from the 2020 locus due to the following supply-side issues:

  • Energy-crisis sent one-third of European ammonia plants to shutdown

Ammonia production process requires hydrogen and involved an energy-intense process. Most of the ammonia plants today are using natural gas as their feedstock for their hydrogen rather than coal or water due to environmental and economical considerations. Natural gas as a feedstock could govern 70-90% of the cash production cost of ammonia, excluding energy cost.

According to Bloomberg Intelligence, currently, about one-third of Europe’s ammonia production plants are being shut down due to the pricey natural gas cost. Such supply gap translates into additional demand to the merchant ammonia market and pinched 30% of the merchant ammonia balance.

The reasoning behind the energy crisis was a combination between structural changes and geopolitical tension:

Source: Bloomberg

In Q4 2021, we saw the tight energy market take the spotlight and send costs sky-high. The sector underinvestment over the last five years driven by lackluster prices, ESG scrutiny, and global-wide consolidation jolted fossil fuel prices up when it faces a robust demand from economic reopening. We had written some of these matters in our previous blog post in June 2021 (link).

In the case of natural gas, we saw its energy cost per unit has exceeded brent oil in both Europe (Dutch TTF) and Asia (JKM). Indicating the two regions’ competition to secure supply. This was primarily due to the region’s structural shift of adopting natural gas in their path of decarbonization. This structural shift is expected to result in a shortage of LNG in the future according to McKinsey.

Source: McKinsey

With over 20% gas share in their energy mix, gas demand was amplified because intermittent renewable energy did not work during winter. About 10% to 20% of energy sources had to be switched to ‘dirtier’ hydrocarbon and gas has been the top preference.

This condition is worsened as Russia’s gas flows which account for 40% of Europe’s gas supply are reduced significantly. Russia’s gas flow in December 2021 was 10.3 bcm, about 26% lower than the same period last year.

The recently escalated tension of Russia-Ukraine has resulted in the postponement of the Nordstream II pipeline operation, carving out a significant potential gas supply for the region.

The Dutch TTF’s futures are now trading above USD 20 per MMBTU until mid-2023. This price has priced in the delay of the potential gas supply and implies LNG in Europe won’t be adequate to fill in the gas stock-up in the region for the whole year which starts at a very low base as inventory level is lower than five-year lows.

Warmer winter from La Nina for Europe could help to ease the replenishment of gas production but at this rate, this effect would be rather blunt. With natural gas availability remaining uncertain, we believe that the shutdown of European ammonia producers would take some time and the country will be a dominant buyer in the market.

  • Missing fertiliser exports from Russia and China

In attempts to control food prices and security domestically, Russia and China have imposed restrictions on fertilisers export to ensure the availability and affordability for local farmers until 1H22. We estimated this resulted in 18% of missing supply from the merchant ammonia market.

The uncertainty looms whether as the policy would be carried as the initial plan since the tight market in agriculture, potash, nitrogen (ammonia), and phosphate market persist. Not to mention the escalating tension between Ukraine and Russia lingering the uncertainty in the already tight agricultural and energy market.

  • Supply chain constraints kept prices high

Source: Bloomberg

The supply chain problems constraint that was initiated from the COVID-19 pandemic still haunt the economy. The steep freight cost has reportedly caused some producers to switch their inventory policy from just-in-time to just-in-case, stretching up the freight capacity even more.

For Europe and Asia, the steep freight market capped the potential cost savings from importing through LNG freight. Based on the normal calculation, we estimated about half the price of the current LNG price in Europe and Asia is going to the freight.

In addition to supply chain issues, health protocols also delayed the recovery and development of plants. Those factors combined slows down the plant turnaround process from 20 days to 60 days, according to one of our sources in the industry. Another case in point is the development of the Ma’Aden Ammonia-3 plant’s commercialization has been stalled from December 2021 and is expected to be delayed until Q3 2022, a nine-month delay.

Ammonia could be a good long-exposures on today’s world problem

In short, tight agricultural market, energy crisis, geopolitical tension, and supply chain issues are factors that keep ammonia prices high. At the current goldilocks situation, we see European fertiliser companies purchase to set the support price for ammonia as they become the dominant buyer in the market. It still unclear on how long this confluence of problems could be untangled.

So far, the pockets of farmers have been deep enough to pay the high price of ammonia from the tailwind of their commodities. Given the tight relationship of ammonia in the multiple problematic verticals of today’s economy, perhaps ammonia exposure could be a prospective long-exposure towards todays’ world problems?


Share

Who would’ve thought that someone is willing to pay a hefty price for turds? Although some might find this to be stomach-churning, it is a reality. According to Bloomberg, manure is selling for USD 40 to 70 per ton, an all-time high level since 2012.

Major reasoning behind this phenomenon could be traced from the ongoing fertiliser crisis, especially from one of its key ingredients: ammonia.

Ammonia is a compound of nitrogen and hydrogen (NH3). The high nitrogen component, a key macronutrient for plants, makes ammonia an essential feedstock for all nitrogen-based fertilisers. Alternatively, it can be applied directly to the soil as well.

Based on our study, the dynamic of ammonia market is reflecting today’s problems on multiple fronts, namely: supply chain, agricultural, energy, and geopolitical tension. Its price performance is a perfect example of what could happen when an inelastic demand faces a serious setback in supply.

Perhaps, ammonia could be good long exposure for the ongoing problems in the world. Below is our learning on this matter:

The now deep-pocketed farmers could afford the unprecedented upswings of ammonia price

Source: Bloomberg

The soaring price of ammonia has a profound impact on the agriculture market as fertilisers typically contribute up to 20% of in-farm cash costs. The ammonia market, however, is also affected by the agriculture market as the chemical is their essential derivative demand – 80% of ammonia use case comes from fertiliser.

Given such a relationship, ammonia price can only elevate that much for a considerable time because there are people who are willing to pay for it. In this case, it is the farmers who account for most of the demand.

As of 23 February 2022, the Bloomberg agriculture commodity price index was indicated 67% higher than on the end of 2019 level. The favorable agricultural prices certainly have buoyed the fertiliser market as it deepens farmers’ pockets. Nutrien, the world’s largest plant nutrition producer, sees crops producers’ margin to expand by more than two hundred percent for 2021 and 2022 compared to the 2019 level.

Source: Nutrien

We see the outlook for agricultural commodities to remain bright as the tight market is yet to see relief. Global grains stocks-to-use ratio that indicate the carryover availability to fulfill the full-year demand has been in a free-fall in the last couple of years. The weak prices of 2012-2020 might had disincentivized investments in this space and resulted in a weak production capacity to timely respond to demand.

The combination of economic reopening and stimulus packages during the pandemic is also providing strong support for the demand for agricultural commodities.

Source: Bloomberg

Provided by these circumstances, farmers should be well-incentivised to continue applying fertilizers for maintaining or boosting their production. Especially, when they know that in some parts of the world crop yield might be adversely impacted by La Nina.

It is amazing to see this rock-solid demand could afford multiple setbacks on the supply side.

The supply-side problems have dislocated ammonia market by at least 48%

Normally, ammonia plants are built altogether with the downstream fertiliser plants. The statistics of the International Fertilizers Associations (IFA) indicated only 18.4 mn tons of 185.3 mn tons global capacity production in ammonia was traded globally in 2020. Only 10% of global production was intended for trade, causing the merchant ammonia market prone to disruptions.

Based on our estimate, the current ammonia market’s equilibrium faced a dislocation of at least 48% from the 2020 locus due to the following supply-side issues:

  • Energy-crisis sent one-third of European ammonia plants to shutdown

Ammonia production process requires hydrogen and involved an energy-intense process. Most of the ammonia plants today are using natural gas as their feedstock for their hydrogen rather than coal or water due to environmental and economical considerations. Natural gas as a feedstock could govern 70-90% of the cash production cost of ammonia, excluding energy cost.

According to Bloomberg Intelligence, currently, about one-third of Europe’s ammonia production plants are being shut down due to the pricey natural gas cost. Such supply gap translates into additional demand to the merchant ammonia market and pinched 30% of the merchant ammonia balance.

The reasoning behind the energy crisis was a combination between structural changes and geopolitical tension:

Source: Bloomberg

In Q4 2021, we saw the tight energy market take the spotlight and send costs sky-high. The sector underinvestment over the last five years driven by lackluster prices, ESG scrutiny, and global-wide consolidation jolted fossil fuel prices up when it faces a robust demand from economic reopening. We had written some of these matters in our previous blog post in June 2021 (link).

In the case of natural gas, we saw its energy cost per unit has exceeded brent oil in both Europe (Dutch TTF) and Asia (JKM). Indicating the two regions’ competition to secure supply. This was primarily due to the region’s structural shift of adopting natural gas in their path of decarbonization. This structural shift is expected to result in a shortage of LNG in the future according to McKinsey.

Source: McKinsey

With over 20% gas share in their energy mix, gas demand was amplified because intermittent renewable energy did not work during winter. About 10% to 20% of energy sources had to be switched to ‘dirtier’ hydrocarbon and gas has been the top preference.

This condition is worsened as Russia’s gas flows which account for 40% of Europe’s gas supply are reduced significantly. Russia’s gas flow in December 2021 was 10.3 bcm, about 26% lower than the same period last year.

The recently escalated tension of Russia-Ukraine has resulted in the postponement of the Nordstream II pipeline operation, carving out a significant potential gas supply for the region.

The Dutch TTF’s futures are now trading above USD 20 per MMBTU until mid-2023. This price has priced in the delay of the potential gas supply and implies LNG in Europe won’t be adequate to fill in the gas stock-up in the region for the whole year which starts at a very low base as inventory level is lower than five-year lows.

Warmer winter from La Nina for Europe could help to ease the replenishment of gas production but at this rate, this effect would be rather blunt. With natural gas availability remaining uncertain, we believe that the shutdown of European ammonia producers would take some time and the country will be a dominant buyer in the market.

  • Missing fertiliser exports from Russia and China

In attempts to control food prices and security domestically, Russia and China have imposed restrictions on fertilisers export to ensure the availability and affordability for local farmers until 1H22. We estimated this resulted in 18% of missing supply from the merchant ammonia market.

The uncertainty looms whether as the policy would be carried as the initial plan since the tight market in agriculture, potash, nitrogen (ammonia), and phosphate market persist. Not to mention the escalating tension between Ukraine and Russia lingering the uncertainty in the already tight agricultural and energy market.

  • Supply chain constraints kept prices high

Source: Bloomberg

The supply chain problems constraint that was initiated from the COVID-19 pandemic still haunt the economy. The steep freight cost has reportedly caused some producers to switch their inventory policy from just-in-time to just-in-case, stretching up the freight capacity even more.

For Europe and Asia, the steep freight market capped the potential cost savings from importing through LNG freight. Based on the normal calculation, we estimated about half the price of the current LNG price in Europe and Asia is going to the freight.

In addition to supply chain issues, health protocols also delayed the recovery and development of plants. Those factors combined slows down the plant turnaround process from 20 days to 60 days, according to one of our sources in the industry. Another case in point is the development of the Ma’Aden Ammonia-3 plant’s commercialization has been stalled from December 2021 and is expected to be delayed until Q3 2022, a nine-month delay.

Ammonia could be a good long-exposures on today’s world problem

In short, tight agricultural market, energy crisis, geopolitical tension, and supply chain issues are factors that keep ammonia prices high. At the current goldilocks situation, we see European fertiliser companies purchase to set the support price for ammonia as they become the dominant buyer in the market. It still unclear on how long this confluence of problems could be untangled.

So far, the pockets of farmers have been deep enough to pay the high price of ammonia from the tailwind of their commodities. Given the tight relationship of ammonia in the multiple problematic verticals of today’s economy, perhaps ammonia exposure could be a prospective long-exposure towards todays’ world problems?


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While having a getaway from a tumultuous year of a volatile market, one of our team members decided to share his bitter and sweet experience while enjoying delicacies in two different restaurants. The story reminds us of maintaining an underdog spirit to avoid being complacent and getting spoiled. The story in his own words is as follows:

The tale

I recently visited a gorgeous restaurant in Jakarta. The place was busy again after the Covid hiatus. I was so delighted to see the restaurant making a strong comeback, and I was also elated to recognize that we are supporting a local business that had fought Covid and won.

Almost everything about the place has gone back to normal. However, that, unfortunately, includes the poor-mannered and unhelpful staff. How did I forget about that?

Despite my colleague’s warmhearted gestures like making jokes and chatting friendly with the restaurant staff, they gave us a stiff face. We certainly felt that the staff acted like they were doing us a big favour by interacting with us. Others sought ways not to have to do much while pretending to be hardworking. When the wrong food was delivered to us, no apologies were offered, not even in the most basic form.

How could this happen? Is the restaurant staff not grateful for our support?

Maybe they are not aware of it because the restaurant is busy once again. Maybe because the restaurant staff did not have to do the heavy lifting to make their business successful. The location is superb and the design is first class. The hardware is great.

The problem is with the software. We understand that the restaurants under the same group are not nearly as bad. If anything, the service is known to be outstanding. In other places, however, the hardware, the place, and the design were not nearly as good as for this particular restaurant.

Sometimes the gorgeous hardware, or the ecosystem, works against you. Perhaps it’s too easy for complacency to set in when people would come anyway, thanks to the restaurant’s unique setup.

A few days later, during a holiday in Bali, my family went to dinner in the quiet Sanur area. The restaurant we picked looked gorgeous (now a negative word in my mind) from the outside. But this time around, I did not expect much after the previous experience described earlier. Maybe my defense mechanism kicked in, attempting to manage my expectations after a massive disappointment just days earlier.

To my pleasant surprise, the staff working there were adept, fully engaged, and movingly knowledgeable. No one was glued to their phone. Instead, they were super disciplined, yet very friendly. Their smiles were genuine, even when we did not attempt to make jokes.

The food was no disappointment either. The duck was juicy, and the sauce complemented it very well. It was not too fatty but it did not lack fat. The eggplants were also outstanding. It was soft, tender, and packed with amazing flavours. Even the dessert, cheesecake with mango toppings, did not fail to bring out joy to my table.

Later on, I learned that the restaurant was initially part of a big-name hotel. It is now completely separated and they needed to survive on their own with no more ecosystem support from the big-name hotel. The food was great and tasted even better with such a good service.

The name of this splendid place is Naga Eight. Considering that they just re-started, maybe it’s still too early to tell what will happen in the future. If they can maintain the “day-one” spirit, I think it could one day be a dining institution in Bali.

With the “day-one” mindset and full acceptance that one has no support from any big ecosystem, suddenly Team Naga Eight stops rehearsing their limitations: they have been granted the chance of a lifetime.

Naga Eight, the underdog spirit

Companies’ value creation starts from the people

In Indonesia, many investors are eyeing technology companies as they started to populate the public equity market. We find it quite often that investors overweight their tech stocks investment consideration for the ecosystem and may slightly overlook other aspects of the business as a result.

While the tech ecosystem may provide a better chance of winning as it provides a captive market that may translate into faster and cheaper user acquisition, it is not a necessary nor a sufficient condition for success. As in the tale of the two restaurants, the ecosystem may provide a comfort zone that could be counterproductive for the company’s growth like a spoiled child knowing there will be a divine hand to lift them.

The only way to reduce such risk is by paying more attention to the management team’s execution capability and their attitude towards the game. Like a horse race, it takes both a good horse and jockey to win the race.

If we recall the blitzscaling stories of new-economy companies that are worth hundreds of billions or even trillions of dollars today, a major part of their success can be attributed to the management’s attitude and character instead of just where the company come from. After all, a company is run by the people.

In the industry where there are numerous cases of David and Goliath, the threat of the underdogs should not be taken lightly. Their hunger for victory is what we are looking for. Underdog companies are more likely to question the way they conduct business and more willing to reinvent themselves while ecosystem players tend to be more constrained by their patron.

In start-up companies whose profits are often still imaginary, management team spirit is indeed a reality.

Last words…

The story of Naga Eight reminds us of a scene from Dark Knight Rises (2012). The hero of the story Bruce Wayne (the Batman) successfully made an impossible jump to escape the Lazarus Pit Prison after numerous failed attempts only when he did it without the rope that keeps death away.

Only when he knows that failure is not an option, he can exceed his limitations and achieve the impossible.

Doctor                  : “You do not fear death. You think this makes you strong. It makes you weak.
Bruce Wayne      : “Why?
Doctor                  : “How can you move faster than possible, fight longer than possible,

                                without the most powerful impulse of the spirit? The fear of death.

Bruce Wayne      :”I do fear death. I fear dying in here while my city burns.

                                And there’s no one there to save it.

Doctor                  : “Then make the climb.”

Bruce Wayne      : “How?

Doctor                  : “As the child did – without the rope. Then fear will find you again.”


Share

While having a getaway from a tumultuous year of a volatile market, one of our team members decided to share his bitter and sweet experience while enjoying delicacies in two different restaurants. The story reminds us of maintaining an underdog spirit to avoid being complacent and getting spoiled. The story in his own words is as follows:

The tale

I recently visited a gorgeous restaurant in Jakarta. The place was busy again after the Covid hiatus. I was so delighted to see the restaurant making a strong comeback, and I was also elated to recognize that we are supporting a local business that had fought Covid and won.

Almost everything about the place has gone back to normal. However, that, unfortunately, includes the poor-mannered and unhelpful staff. How did I forget about that?

Despite my colleague’s warmhearted gestures like making jokes and chatting friendly with the restaurant staff, they gave us a stiff face. We certainly felt that the staff acted like they were doing us a big favour by interacting with us. Others sought ways not to have to do much while pretending to be hardworking. When the wrong food was delivered to us, no apologies were offered, not even in the most basic form.

How could this happen? Is the restaurant staff not grateful for our support?

Maybe they are not aware of it because the restaurant is busy once again. Maybe because the restaurant staff did not have to do the heavy lifting to make their business successful. The location is superb and the design is first class. The hardware is great.

The problem is with the software. We understand that the restaurants under the same group are not nearly as bad. If anything, the service is known to be outstanding. In other places, however, the hardware, the place, and the design were not nearly as good as for this particular restaurant.

Sometimes the gorgeous hardware, or the ecosystem, works against you. Perhaps it’s too easy for complacency to set in when people would come anyway, thanks to the restaurant’s unique setup.

A few days later, during a holiday in Bali, my family went to dinner in the quiet Sanur area. The restaurant we picked looked gorgeous (now a negative word in my mind) from the outside. But this time around, I did not expect much after the previous experience described earlier. Maybe my defense mechanism kicked in, attempting to manage my expectations after a massive disappointment just days earlier.

To my pleasant surprise, the staff working there were adept, fully engaged, and movingly knowledgeable. No one was glued to their phone. Instead, they were super disciplined, yet very friendly. Their smiles were genuine, even when we did not attempt to make jokes.

The food was no disappointment either. The duck was juicy, and the sauce complemented it very well. It was not too fatty but it did not lack fat. The eggplants were also outstanding. It was soft, tender, and packed with amazing flavours. Even the dessert, cheesecake with mango toppings, did not fail to bring out joy to my table.

Later on, I learned that the restaurant was initially part of a big-name hotel. It is now completely separated and they needed to survive on their own with no more ecosystem support from the big-name hotel. The food was great and tasted even better with such a good service.

The name of this splendid place is Naga Eight. Considering that they just re-started, maybe it’s still too early to tell what will happen in the future. If they can maintain the “day-one” spirit, I think it could one day be a dining institution in Bali.

With the “day-one” mindset and full acceptance that one has no support from any big ecosystem, suddenly Team Naga Eight stops rehearsing their limitations: they have been granted the chance of a lifetime.

Naga Eight, the underdog spirit

Companies’ value creation starts from the people

In Indonesia, many investors are eyeing technology companies as they started to populate the public equity market. We find it quite often that investors overweight their tech stocks investment consideration for the ecosystem and may slightly overlook other aspects of the business as a result.

While the tech ecosystem may provide a better chance of winning as it provides a captive market that may translate into faster and cheaper user acquisition, it is not a necessary nor a sufficient condition for success. As in the tale of the two restaurants, the ecosystem may provide a comfort zone that could be counterproductive for the company’s growth like a spoiled child knowing there will be a divine hand to lift them.

The only way to reduce such risk is by paying more attention to the management team’s execution capability and their attitude towards the game. Like a horse race, it takes both a good horse and jockey to win the race.

If we recall the blitzscaling stories of new-economy companies that are worth hundreds of billions or even trillions of dollars today, a major part of their success can be attributed to the management’s attitude and character instead of just where the company come from. After all, a company is run by the people.

In the industry where there are numerous cases of David and Goliath, the threat of the underdogs should not be taken lightly. Their hunger for victory is what we are looking for. Underdog companies are more likely to question the way they conduct business and more willing to reinvent themselves while ecosystem players tend to be more constrained by their patron.

In start-up companies whose profits are often still imaginary, management team spirit is indeed a reality.

Last words…

The story of Naga Eight reminds us of a scene from Dark Knight Rises (2012). The hero of the story Bruce Wayne (the Batman) successfully made an impossible jump to escape the Lazarus Pit Prison after numerous failed attempts only when he did it without the rope that keeps death away.

Only when he knows that failure is not an option, he can exceed his limitations and achieve the impossible.

Doctor                  : “You do not fear death. You think this makes you strong. It makes you weak.
Bruce Wayne      : “Why?
Doctor                  : “How can you move faster than possible, fight longer than possible,

                                without the most powerful impulse of the spirit? The fear of death.

Bruce Wayne      :”I do fear death. I fear dying in here while my city burns.

                                And there’s no one there to save it.

Doctor                  : “Then make the climb.”

Bruce Wayne      : “How?

Doctor                  : “As the child did – without the rope. Then fear will find you again.”


Share

Resolutions are firm decisions to do or not to do something. While such determinations can be reached anytime, it is a common practice to say out loud in the beginning of each year what those things may be, followed by a reflection at the end of the year on how much have been accomplished during the year. Three topics we believe that may stimulate you to decide some resolutions for 2022 are about health, habit and mindset. More specifically:

Healthcare today is really sickcare, how can we change that? Tiny changes may have remarkable results, how do atomic habits work? Unlearning is a big part of learning itself, how a growth mindset can embrace the metaverse? We gather our thoughts and previous research on these subjects to remind ourselves as well as our readers the importance of staying healthy, nurturing good habits and having a growth mindset.

A siren call to the healthcare (or sickcare) system?

Starting an exercise routine, cutting back on alcohol, eating more nutritious food…

Which ones of these appear on your new year resolutions? As we kickstart another year with the pandemic around, staying healthy is one of our top priorities. The soaring covid cases in the Omicron wave got us to pay attention to the healthcare systems around the globe.

And we noticed a few issues with healthcare systems around the world:

1. Healthcare systems focus on treating illnesses than preventing disease and maintaining wellness.

2. Economic incentives for the industry participants have made treatment and medication extremely costly as well as discouraging better health education in communities.

3. Mental health has been one of the most neglected area of public health. According to the National Institute of Mental Health, nearly one in five U.S. adults had a mental illness in 2019 (51.5 million people).

The U.S. healthcare system over the past decades has been shaped to address the needs of patients instead of maintaining the wellness of the healthy population. Technology has been the greatest driver of improvement in many industries, but healthcare remains the exception. Dr Rafael Grossman, who is the first surgeon in the world to use Google Glass during an operation, believes that the advanced technology has become a tool to improve access to health. He thinks that the collection of data and analysis by AI have become more important in the field in healthcare. These tools enable better diagnosis and prediction of diseases, as well as the likely outcome of a specific intervention through treatment and medication.

However, for participants in the healthcare system, it is not lucrative to help healthcare consumers to prevent health problems. Economic incentives for patenting medical devices and drugs have remained strong barriers to effective disease prevention. More advanced technology may provide a cost-effective solution to correcting this systematic issue. This strategy is unfortunately undesirable to the system participants. The lack of potential for patenting advanced technology impedes one’s incentive to address the problem.

There is no simple solution in transforming the U.S. healthcare system. The best advice to each individual would be to take control and be in charge of maintaining his/her own health.

How do atomic habits work?

Often, we find it challenging to build a good habit or break a bad one. One week, two weeks, then we will likely revert to the old routine.

To be persistent is difficult. This time around, we have turned to the book “Atomic Habits” by James Clear for some guidance.

As stated in the book, atomic habits are defined as:

Atomic:
– An extremely small amount of a thing; the single irreducible unit of a larger system.
– The source of immense energy or power.

Habit:
– A routine or practice performed regularly; an automatic response to a specific situation

Clear introduces the importance of small changes. Little things add up to big things and time can create a multiplier effect. A small change may seem insignificant at first, but over time, the impact can be greater than you would have imagined. Sometimes we find it difficult to form good habits while bad habits linger. Clear explains that this is not uncommon. He elaborates using two reasons for why changing habits can be challenging, first is that we try to change the wrong thing, and second one being that we try to change our habits in the wrong way.

He further explains by using the three levels of change:

1. Outcome change
This level is concerned with changing your results.

2. Process change
This level is concerned with changing your habits and system.

3. Identity change
This level is concerned with changing your beliefs.

Most people managed to get to level 1 or 2 but failed to change their identity / beliefs. The true behavioural change is identity change, once a behaviour becomes part of your identity, you will become more motivated to maintain the habits associated with it.

“Progress requires unlearning. Becoming the best version of yourself requires you to continuously edit your beliefs, and to upgrade and expand your identity. ” – Atomic Habits by James Clear

The above is one of our favourite quotes from the book, it perfectly resonates with our strong belief of the importance of the ability to unlearn.

This also paths a great lead-in for us to introduce the next topic – a growth mindset to embrace the metaverse.

Entering the future with a growth mindset

Our readers would be familiar with the idea of the growth mindset that we introduced in one of our blog posts last year. For those who are new to our blog, you may read the post here.

As we all know, the future is uncertain. But one thing that we can be certain about is that technology will continue and play an even bigger role in driving our future. And metaverse will be one of the important representations of this technology driven future.

The word metaverse was the tech buzzword of 2021. With metaverse becoming a reality and hybrid culture are here to stay, how should individuals seek to familiarize themselves with it?

Having a growth mindset can create a significant impact. People with a fixed mindset may find it difficult to embrace the new concept of metaverse as it blurs the line between the physical world and virtual world. It is against the beliefs of “reality” fixated in our mind. Is the metaverse real? How do we define what is real? In the metaverse, we are represented by our avatars, we see and communicate with other avatars. Are they real? This all comes down to our beliefs. No difference to being in the physical world, we can experience feelings such as happiness, sadness and anger in the metaverse. Such sensations and emotions created by our brain influence how our brain construct reality.

A growth mindset encourages development. People with a growth mindset are not fixated on existing, stereotypical concepts, they are always seeking to find new ways to learn. In the era of digital disruption, this concept is more important than ever. Sometimes, people may struggle to make progress. The problem is that they have been focusing on the wrong thing. Learning is not the spigot to embrace new ideas, it is the unlearning. Unlearning is the ability to adapt and perceive differently. We cannot learn a new skill or concept without unlearning an older one.

Embracing the metaverse means unlearning what we understand today as the internet, what’s real and what’s virtual. Embracing the metaverse means embracing a future of unknown, unknowable and unique.

 

Reference:

Is Mental Illness on The Rise?, https://www.banyanmentalhealth.com/2021/07/01/rise-in-mental-illness/

Going from ‘Sickcare’ to ‘Healthcare’, https://healthmanagement.org/c/healthmanagement/issuearticle/going-from-sickcare-to-healthcare


Share

Resolutions are firm decisions to do or not to do something. While such determinations can be reached anytime, it is a common practice to say out loud in the beginning of each year what those things may be, followed by a reflection at the end of the year on how much have been accomplished during the year. Three topics we believe that may stimulate you to decide some resolutions for 2022 are about health, habit and mindset. More specifically:

Healthcare today is really sickcare, how can we change that? Tiny changes may have remarkable results, how do atomic habits work? Unlearning is a big part of learning itself, how a growth mindset can embrace the metaverse? We gather our thoughts and previous research on these subjects to remind ourselves as well as our readers the importance of staying healthy, nurturing good habits and having a growth mindset.

A siren call to the healthcare (or sickcare) system?

Starting an exercise routine, cutting back on alcohol, eating more nutritious food…

Which ones of these appear on your new year resolutions? As we kickstart another year with the pandemic around, staying healthy is one of our top priorities. The soaring covid cases in the Omicron wave got us to pay attention to the healthcare systems around the globe.

And we noticed a few issues with healthcare systems around the world:

1. Healthcare systems focus on treating illnesses than preventing disease and maintaining wellness.

2. Economic incentives for the industry participants have made treatment and medication extremely costly as well as discouraging better health education in communities.

3. Mental health has been one of the most neglected area of public health. According to the National Institute of Mental Health, nearly one in five U.S. adults had a mental illness in 2019 (51.5 million people).

The U.S. healthcare system over the past decades has been shaped to address the needs of patients instead of maintaining the wellness of the healthy population. Technology has been the greatest driver of improvement in many industries, but healthcare remains the exception. Dr Rafael Grossman, who is the first surgeon in the world to use Google Glass during an operation, believes that the advanced technology has become a tool to improve access to health. He thinks that the collection of data and analysis by AI have become more important in the field in healthcare. These tools enable better diagnosis and prediction of diseases, as well as the likely outcome of a specific intervention through treatment and medication.

However, for participants in the healthcare system, it is not lucrative to help healthcare consumers to prevent health problems. Economic incentives for patenting medical devices and drugs have remained strong barriers to effective disease prevention. More advanced technology may provide a cost-effective solution to correcting this systematic issue. This strategy is unfortunately undesirable to the system participants. The lack of potential for patenting advanced technology impedes one’s incentive to address the problem.

There is no simple solution in transforming the U.S. healthcare system. The best advice to each individual would be to take control and be in charge of maintaining his/her own health.

How do atomic habits work?

Often, we find it challenging to build a good habit or break a bad one. One week, two weeks, then we will likely revert to the old routine.

To be persistent is difficult. This time around, we have turned to the book “Atomic Habits” by James Clear for some guidance.

As stated in the book, atomic habits are defined as:

Atomic:
– An extremely small amount of a thing; the single irreducible unit of a larger system.
– The source of immense energy or power.

Habit:
– A routine or practice performed regularly; an automatic response to a specific situation

Clear introduces the importance of small changes. Little things add up to big things and time can create a multiplier effect. A small change may seem insignificant at first, but over time, the impact can be greater than you would have imagined. Sometimes we find it difficult to form good habits while bad habits linger. Clear explains that this is not uncommon. He elaborates using two reasons for why changing habits can be challenging, first is that we try to change the wrong thing, and second one being that we try to change our habits in the wrong way.

He further explains by using the three levels of change:

1. Outcome change
This level is concerned with changing your results.

2. Process change
This level is concerned with changing your habits and system.

3. Identity change
This level is concerned with changing your beliefs.

Most people managed to get to level 1 or 2 but failed to change their identity / beliefs. The true behavioural change is identity change, once a behaviour becomes part of your identity, you will become more motivated to maintain the habits associated with it.

“Progress requires unlearning. Becoming the best version of yourself requires you to continuously edit your beliefs, and to upgrade and expand your identity. ” – Atomic Habits by James Clear

The above is one of our favourite quotes from the book, it perfectly resonates with our strong belief of the importance of the ability to unlearn.

This also paths a great lead-in for us to introduce the next topic – a growth mindset to embrace the metaverse.

Entering the future with a growth mindset

Our readers would be familiar with the idea of the growth mindset that we introduced in one of our blog posts last year. For those who are new to our blog, you may read the post here.

As we all know, the future is uncertain. But one thing that we can be certain about is that technology will continue and play an even bigger role in driving our future. And metaverse will be one of the important representations of this technology driven future.

The word metaverse was the tech buzzword of 2021. With metaverse becoming a reality and hybrid culture are here to stay, how should individuals seek to familiarize themselves with it?

Having a growth mindset can create a significant impact. People with a fixed mindset may find it difficult to embrace the new concept of metaverse as it blurs the line between the physical world and virtual world. It is against the beliefs of “reality” fixated in our mind. Is the metaverse real? How do we define what is real? In the metaverse, we are represented by our avatars, we see and communicate with other avatars. Are they real? This all comes down to our beliefs. No difference to being in the physical world, we can experience feelings such as happiness, sadness and anger in the metaverse. Such sensations and emotions created by our brain influence how our brain construct reality.

A growth mindset encourages development. People with a growth mindset are not fixated on existing, stereotypical concepts, they are always seeking to find new ways to learn. In the era of digital disruption, this concept is more important than ever. Sometimes, people may struggle to make progress. The problem is that they have been focusing on the wrong thing. Learning is not the spigot to embrace new ideas, it is the unlearning. Unlearning is the ability to adapt and perceive differently. We cannot learn a new skill or concept without unlearning an older one.

Embracing the metaverse means unlearning what we understand today as the internet, what’s real and what’s virtual. Embracing the metaverse means embracing a future of unknown, unknowable and unique.

 

Reference:

Is Mental Illness on The Rise?, https://www.banyanmentalhealth.com/2021/07/01/rise-in-mental-illness/

Going from ‘Sickcare’ to ‘Healthcare’, https://healthmanagement.org/c/healthmanagement/issuearticle/going-from-sickcare-to-healthcare


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We drive our mission with an exceptional culture through applying a growth mindset where re-search.
re-learning and reflection is at our core.