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January 17, 2023

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An asymptote is a straight line that continuously approaches a given curve however shouldn’t be infinitely far-off.

In different phrases, the method can’t be improved any additional.

This occurs to all issues in nature. Economists generally name this “diminishing marginal utility.” In layman’s phrases, that is additionally referred to as the “plateau” of the expansion curve…generally the “S” curve.

They’re all asymptotes.

Are we hitting limits on a number of domains on the identical time?

Provide chain effectivity asymptote: To the uninitiated, provide chain effectivity is a robust measure of productiveness good points in an financial system. With out productiveness good points, there will be no financial progress.

I first realized this as a provide chain administration advisor over 10 years in the past. That no firm I used to be working with was capable of improve their forecast accuracy past 75% (on the product – firm stage). The accuracy of the overwhelming majority of firms is between 65% and 75%.

For all of the speak about IoT/Trade 4.0, I feel the web good points within the provide chain are more likely to be marginal. They’ll come from startups becoming a member of technology-driven SC administration, not from firms which can be already environment friendly.

Microchip nanometer asymptote: We’ve already reached 3 nanometers thick. Any diluent, we’re speaking a few single atom etch stage.

A silicon atom is 0.2 nanometers. It could be unimaginable to create a silicon transistor smaller than that. In need of advances in quantum computer systems or new supplies for making chips, it appears that evidently present expertise has reached its measurement restrict.

  1. Does it imply there shall be no pace/processor good points however new good points?
  2. It must come from new adoptions, that’s, develop sideways. However is not there an inherent productiveness acquire?

Asymptote of concepts: We come throughout this disturbing doc from Nature just lately in “Articles and patents have gotten much less disruptive over time.”

I am going to straight quote the article right here:

“Utilizing knowledge from 45 million articles and three.9 million patents from six large-scale knowledge units, together with a brand new quantitative metric, the CD index, which characterizes how articles and patents change quotation networks in science. and expertise. We discovered that paperwork and patents are much less more likely to break with the previous in ways in which push science and expertise in new instructions. This sample holds universally throughout fields and is strong throughout a number of completely different quotation and text-based metrics.”

Inside science, it’s well-known that Physics has not moved a lot within the final 70+ years. To the purpose that it has develop into one thing of a popular culture joke:

Market effectivity asymptote: We wrote about our personal analysis on market efficiencies and got here to the conclusion that true and excellent effectivity (ie zero arbitrage) is probably not doable.

Rate of interest asymptote: Rates of interest have been round because the 1300s in response to this text from The Economist:

So the ‘zero’ and damaging charge regime we have skilled within the final 15 years (greater than 20 if you happen to depend from the dotcom period), is absolutely a part of a large lengthy development. As soon as this asymptote is reached, rates of interest have nowhere to go anytime quickly however up…

It raises some vital questions:

  1. As soon as the Fed beats the final bout of inflation and inflation returns to 2%, will they maintain the fed funds charge again to 2%?
  2. Because the rate of interest is known as a reflection of productiveness good points in an financial system (which in flip is mirrored within the accuracy of the forecast above), are we taking a look at many years of low productiveness/low progress?


Human nature won’t relaxation on asymptotes. Nice advances will come. Perhaps with the following Einstein as a genius. Till then, we are going to proceed working.

We imagine that the market will proceed to be inefficient sufficient for us to proceed to generate revenue for ourselves and our shoppers.

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