A Few Things: Genetic Enhancement, Michael Mauboussin, Tim Urban, News You Might Have Missed, What I Learnt in LA, How To Use Bing-GPT, The State of VC.....

March 10 2023

Mar 10

I am sharing this weekly email with you because I count you in the group of people I learn from and enjoy being around.

You can check out last week’s edition here: The Song Of The Cell, Hacking Darwin, Gates Hard Core, Gombrich Little History, Die With Zero, Charts and News You Might Have Missed.....

Believe it or not, that “♡ Like” button is a big deal – it serves as a proxy to new visitors of this publication’s value. If you enjoy this article, don’t be shy :)

Quotes I Am Thinking About:

“Life is a series of natural and spontaneous changes. Don't resist them - that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like.”

- Lao Tzu

“As long as a man stands in his own way, everything seems to be in his way.”

- Ralph Waldo Emerson

“All the world’s a stage and most of us are desperately unrehearsed.”

-Seán O'Casey (Irish playwright)

“The dream was always running ahead of me. To catch up, to live for a moment in unison with it, that was the miracle.”

- Anaïs Nin (French-born essayist & novelist)

“The trick in risk management is in recognizing that normal is not a state of nature, but a state of transition and that trend is not destiny.”

- Peter Bernstein

“Accepting that we cannot predict the future--i.e., that there will always be unexpected and highly consequential events--is the first step in becoming less fragile and more adaptable. People should be highly skeptical of anyone’s, including their own, ability to predict the future, and instead pursue strategies that can survive whatever may occur.”

- Seth Klarman

A. A Few Things Worth Checking Out:

1. This might be the most “out there” podcast you listen to this year. I listened to it twice.

Dr Jonathan Anomaly is a philosopher who writes about the social implications of emerging biotechnologies, teaches classes in ethics and game theory, and helped design the Philosophy, Politics and Economics program at Duke University.

The ability to select from potential embryos is already here. Soon, we will be able to select for height, intelligence, personality types, moral disposition, athletic ability and maybe even enhance traits which aren't present.

He spoke to Chris Williamson on Modern Wisdom. Expect to learn just what the current technology of embryo selection can achieve right now, whether opting to not genetically enhance your child is an unethical practise, the dangers of creating massive societal inequality, why you are already a eugenicist, whether genetic interventions are morally different from environmental ones and much more...

2. The amazing Michael Mauboussin was on the Tim Ferriss podcast. They discussed How Great Investors Make Decisions and Harnessing The Wisdom (vs. Madness) of Crowds.

Michael is Head of Consilient Research on Counterpoint Global at Morgan Stanley Investment Management. Prior to joining Counterpoint Global, Michael was Director of Research at BlueMountain Capital, Head of Global Financial Strategies at Credit Suisse, and Chief Investment Strategist at Legg Mason Capital Management.

3. Tim Urban author of the great Wait But Why blog has written a book titled: “What’s Our Problem”.

He was on the Invest Like The Best podcast with a wide ranging discussion.

A few ideas I walked away with:

a) If human history were a 1,000-page book, then the hunter-gatherer period would be the first 950 pages.

The prehistoric period would be the first 975 pages
“History” as we know it would be pages 976 to 1,000

b) “More technology means better good times, but it also means badder bad times. And the scary thing is, if the good and bad keep exponentially growing, it doesn’t matter how great the good times become. If the bad gets to a certain level of bad, it’s all over for us.”

c) An echo chamber is a collaborative culture of low-rung thinking based on a sacred set of ideas. In an echo chamber, the coolest thing a person can do is talk about the greatness of their sacred ideas and the evils of the other team’s ideas. Changing your mind is not cool in an echo chamber; it makes you appear to lack conviction.

The opposite of an echo chamber is what Tim Urban calls an “idea lab” which is collaborative truth-finding. In a truth lab, arguing is considered a fun thing, and no one gets offended when their ideas are challenged. Idea labs have an emergent property of super intelligence. Individuals rigorously collaborating and challenging each other results in discoveries like relativity and quantum mechanics that no individual on their own could discover.

Echo chambers have an emergent property of stupidity. It consists of a group paying fealty to a set of sacred beliefs that cannot be challenged. It neglects humanity’s ability to collaborate and achieve super intelligence.

Wisdom is an emergent property of discourse.

4. Thoughtful piece by Mike Green titled Great Expectations, on what is priced into equity markets. His thesis is that the combination of high expectations and passive investment tools will lead to future returns being much lower than expected in the future.

5. Will Durant: One of the 20th century's great historians. He's famous for his Story of Civilization series and a little book called The Lessons of History that you have to read (summarized here):

My favourite idea from the book is about the productive tension between radicals and conservatives. The people who resist change are as important as the ones who propose it, and the human project smartly advances through the productive tension between the parties.

Durant writes:

"It is good that new ideas should be heard, for the sake of the few that can be used; but it also good that new ideas should be compelled to go through the mill of objection, opposition, and contumely; this is the trial heat which innovations must survive before being allowed to enter the human race."

6. The US Inflation Reduction Act is a game changer.

Science Is Strategic @scienceisstrat1

The IRA is a true game-changer for the energy transition in the US 🇺🇸 Short 🧵 below on the impact of the IRA in the US and beyond 🌏 Cc: @Noahpinion @dwallacewells @JesseJenkins @ramez @ylecun @RoKhanna @DeanBaker13 @erikbryn @RonaldKlain @NickKristof @Richard_Florida

B. News You Might Have Missed:

1. Salesforce announced Einstein GPT, an offering that incorporates generative AI tools to assist marketers, customer service agents, and salespeople. The technology, which integrates with Salesforce's customer relationship management (CRM), uses AI to automatically generate personalized emails, marketing copy, responses to customer questions, and computer code for developers. Customers will be able to "use natural-language prompts directly within their Salesforce CRM to generate content that continuously adapts to changing customer information and needs in real-time.”

2. OpenAI's GPT-4 will reportedly be introduced next week and could potentially be multimodal, meaning the AI model may be able to analyze, respond to, and/or generate images and videos in addition to text.

3. FBI director told Congress that China could use TikTok to control users' devices. TikTok on Wednesday was dealt another blow. This time in the form of a letter from a US Senator to the Treasury Secretary. In the letter, wrote that a former ByteDance employee has come forward as a whistleblower and alleged data abuses. TikTok has repeatedly claimed that US data is secure and firewalled from China.

C. The Technology Section:

I was in LA for a week seeing my parents and then spending a few days seeing companies and investors.

Here are the 7 ideas I picked up:

The Price Ain’t Right: Most funds feel that other funds have their portfolio marked at too high prices. But at the same time, no one is quire sure what the right prices are. Deals got done as high as 100x ARR on future growth that didn’t materalize. The funds obviously regret it, but many of the founders do too. It’s wrecked their cap table.
Extend and Pretend: While we wait for clarity on pricing, VC’s are having to bridge their companies at old prices to prevent having to re-mark their portfolio much lower. But that begs the question, how often is it a bridge to nowhere? The recent SVB news won’t help either.
Get Me Some Liquidity: The duration of everyone’s (investors and employees) portfolio just extended by a few years and they all wish they invested slower in ‘20/‘21 and took out more secondary in ‘21. But the greatest need today is to turn the TVPI into DPI.
Access Ain’t Everything: For over a decade, venture was a game of access. The pitch was: “I can get you into ‘great’ companies that you won’t see on your own”. It is now becoming a game of analysis. LPs are more likely to ask: “Am I in the right assets at the right prices?”.
But AI Is….: AI of all kinds was the hot topic, as was Blockchain last year.
Technology Isn’t Stopping: Technological innovation happens fast. The Wright Brothers took their first flight in 1903. 66 years later, mankind put a man on the moon. We’re living in a moment when human life is changing faster than ever before, with every day bringing new breakthrough innovations.
TAM Ain’t What It Used To Be: Marko Papic spoke this week at the Montgomery Summit on this. Markets are shrinking. The dream of selling to a global audience ain’t what it used to be. Watch where government dollars, euros and yuans are going.

2. If you take a search engine (Bing) and add a chatbot (GPT-3) you get a brand new thing bigger than search or chat. It is a universal intern.

This new assistant does analytics, summaries, drafts, coding, research, queries, and more. But you need to learn whole new methods to get the best results.

This short tutorial by Ethan Mollick called “Power and Weirdness” is the best first draft I’ve seen of superuser tips and techniques for harnessing the astounding power of Bing and other chatbots.

3. Beezer Clarkson, Chris Douvos, and Joelle Kayden are three of the most respected investors in venture capital funds, manning their forts at Sapphire Ventures, Ahoy Capital, and Accolade Partners, respectively. They were on Capital Allocators with Ted Seides.

In a far more challenging environment after last year’s public market growth selloff and tightening of purse strings in private markets, they discussed the state of the venture capital industry.

4. That growth in AI interest among investors is beginning to translate into big checks.

Companies like OpenAI, Stability AI, and Anthropic are building large language models. Other companies are developing specific ways to apply artificial intelligence.