The new 3Rs - risk, relearn, rethink...are you ready for 2025?

2025 will test us. The geopolitical landscape is changing, new tech capabilities are emerging faster than ever, and the financial architecture of the world is being completely reinvented. The risks' require us to be ready to relearn and rethink just about everything we know.

S3T Podcast Jan 10, 2025

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In this Issue

🌍 2025: A Year of Change: Geopolitics and finance are shifting fast, demanding fresh thinking and flexibility. Leaders must embrace collaboration and optimism to navigate uncertainty.
📉 Market Risks Loom: Deleveraging may trigger selloffs, affecting big tech and crypto. Private equity’s push for 401K access raises risks for retirement savers.
🔋 Energy and Tech Push Forward: Grid upgrades and renewables expand, while US oil production faces long-term limits. NVIDIA’s AI PCs and OpenAI’s struggles reveal evolving tech landscapes.
🛠️ Change Leadership Tools: Foster an ownership mindset in partners for better execution. S3T’s learning series offers actionable steps for driving change.
📊 Leadership Resources to Guide You: Dashboards, playbooks, and learning tools help leaders tackle volatility, leverage innovation, and succeed in a fast-changing world.

Good to read the fine print...(USA Today Wed Jan 3)

[perspective]

2025: the year of rethinking and relearning

The global economy is evolving rapidly—branching and transforming in unexpected ways:

Market deleveraging and volatility loom large on the horizon.
IPOs are rebounding, while private equity could reshape retirement savings.
The tech divide is widening, reinforcing economic disparities between those in tech careers and those left out...in spite of attempts to attract young people into STEM.

In this era of reinvention, the shifting financial architecture of the world economy and the accelerating pace of innovation demand new approaches. Expect plenty of mixed signals (The front page image above is a great example). Get ready to relearn and rethink just about everything you know.

Here are 4 ways we’ll need to rethink and relearn in 2025:

Patience vs. Procrastination
Know when waiting is productive and when it’s avoidance. Insight often comes in moments of stillness—but timing is everything.
Unlearning and Pivoting
Let go of old assumptions and be ready to adapt. Complex problems demand fresh perspectives and flexibility.
Collaboration Over Division
Solving big problems requires trust and blending diverse expertise. Open communication will be a critical skill.
Optimism with Precision
Say, “Let’s try,” even when unsure. Look for moments of clarity to act decisively and drive progress.

Each of these shifts will help us navigate the uncertainties and opportunities ahead.

[macro-economics]

See the S3T Economics Dashboard for the Top 500+ US & Intl real-time economic indicators.

Market Risk & Volatility on the Horizon

Large investors may moderate their big tech holdings in anticipation of a long overdue correction, as the Fed's continued war on inflation pushes investors to reduce use of borrowed funds ("de-leveraging") - as crypto investors know, this can force spectacular selloffs and market crashes.
Best 10 minute overview of crypto impact to macroeconomics in 2025 and beyond: NLWs Ghost of Bitcoin Future podcast episode. NLW expects large nations to adopt a non-inflationary asset (such as bitcoin) as they realize “they are trading their production for depreciating currency.” For latest prices and market cap rankings, see the S3T Crypto Market Caps chart.
Private Equity - looking for more $ to chew thru - is lobbying the incoming Trump administration to grant them a long held wish: use 401K funds to buy and sell companies. Caution for retirement savers: Money could be locked in for a long time, fees will be higher, and transparency/ accountability will be subjective. See this deeper dive.

"Retirees have historically not had access to private equity funds for good reason, which is that private equity investments are opaque, they are risky, and they might not even be that good for the ordinary investor.”

- Brendan Ballou, author Plunder: Private Equity’s Plan to Pillage America.

Underlying issue: Private Equity returns are supposedly driven by improved operating efficiencies imposed by the PE firms. The reality is, their returns in recent times have been driven by leverage and broad market valuation fads, McKinsey finds here, and here.

👉 Full Access Members: The S3T Macro Panorama sets these developments in their full context.

Energy investment and production

Power grid investment is booming, not just from the energy competition between Crypto mining vs. AI. Demand for more power lines and equipment is being driven by dispersed solar & wind collection points.
Look for increased US oil production but the economic benefits may not be that positive warns the Economist. Context to understand: The Permian Basin that straddles TX and NM - what some consider to be the world's biggest oilfield - is believed to hold enough oil to sustain US oil production through 2030, but not much further.

[emerging tech]

NVIDIA gets into the PC business with Digits, an AI Supercomputer based on its Blackwell chip. The unit appears set to democratize AI model training. This appears to compete directly with territory Apple's high end MacBooks hoped to hold on to.
Big Tech hopes to disrupt Washington, but has deep disagreements with Trump's MAGA base on trade, immigration, manufacturing and more.
OpenAI's $200 per month ChatGPT Pro Plan is losing money because it's being used more than expected, another sign that OpenAI still hasn't figured out its business model.

[change leadership learning series]

This week's lesson: The top 4 ways to cultivate an ownership mindset in your vendors and partners.

An ownership mindset improves our ability to fine-tune our execution and achieve the required outcomes. Change Leaders gain an edge by cultivating an ownership mindset in the vendors and partners they work with. Learn the 4 top ways to kindle an ownership mindset in your vendors and partners. Click the link above to get started.

Once you've completed this segment, you'll be ready to move on to 201C: Activating Change Leadership at the Industry or Macro Level! That lesson will arrive in next week's newsletter.

Click here for an overview of the full Change Leadership Learning Series.

[panoramas]

[playbooks]

Full List of S3T Playbooks

Opinions expressed are those of the individuals and do not reflect the official positions of companies or organizations those individuals may be affiliated with. Not financial, investment or legal advice, and no offers for securities or investment opportunities are intended. Mentions should not be construed as endorsements. Authors or guests may hold assets discussed or may have interests in companies mentioned.