A Few Things: American Grand Strategy, Ariely on Misbelief, Economist on Investing, The Five Experiments, Brooks On Knowing A Person, Introduction to LLMs, Why Did Altman Really Get Fired?, Biotech...
November 24, 2023
I am sharing this weekly email with you because I count you in the group of people I learn from and enjoy being around.
Here is last week’s discussion: How GPT Can Change Your Job, Living Longer, Blackrock on Tech, Marko on Markets, Tulchinsky on Prediction Tech, Elon Musk with Lex, Coatue's AI Report, Sam Altman at Cambridge....
This week is action packed. I hope you enjoy it. What have you been reading this week?
Quotes I Am Thinking About:
"My idea of a great business is one that has a shortage of competitors."
- Peter Lynch
“Too many people overestimate what they lack and underestimate what they have.”
- John D. Rockefeller
“Change is the end result of all true learning.”
- Leo Buscaglia
"The professional loves her work. She is invested in it wholeheartedly. But she does not forget that the work is not her."
- Steven Pressfield on the boundary between work and self
“Consistency enlarges ability”
- James Clear
- Arthur Schopenhauer
A. A Few Things Worth Checking Out:
1. The best thing I listened to twice this week is Edward Luttwak, author and consultant to the US government and defense department, discussing American grand strategy and the logic of war on Hidden Forces.
He’s also well known for authoring over 20 books since 1968, including: Coup d'État: A Practical Handbook (1968), Strategy: The Logic of War and Peace (1987), The Rise of China vs. the Logic of Strategy (2012).
They explored the dimensions of strategy, the influence of a nation-state's political system on grand strategic objectives, and the challenges the US faces. They also dive into China's potential confrontation with the US, the implications of China's one-child policy, and Xi Jinping's desire for a limited war.
The conversation touches on the need for intelligence reform and the lack of clarity in America's current grand strategy.
2. The always interesting Dan Ariely, behavioral economist and bestselling author, joined Michael Shermer to discuss disinformation, misbelief factors, the role of complex stories, social proof, and the influence of others on our beliefs. They also explore social media companies' responsibility for disinformation and what it would take to change their minds.
The key ideas:
The concept of beliefs and misbeliefs, and why people hold certain beliefs that may not align with reality or expert opinions. Highlighting the role of social identity and the need for belonging in shaping beliefs and the challenges of confronting misbeliefs.
The complexity of conspiracy theories, and the psychological and social factors that drive people to believe in conspiracy theories and explores how the need for order and explanations in a chaotic world can lead to the embrace of such theories.
Rationality and misbelief are complex facets of human cognition. While individuals possess the capacity for rationality, various factors can influence the prevalence of irrational beliefs. Personality traits and inclinations, such as trusting intuition or patterns, can impact susceptibility to misbelief. Additionally, stress and a sense of personal injustices can lead to complex stories and the development of beliefs that externalize blame.
The importance of intellectual humility and the ability to explore opposing viewpoints with curiosity to create meaningful and open discussions. By acknowledging our inherent irrational nature, we can work towards building a world that accommodates and mitigates the potential risks of misbelief.
3. Have you seen Ridley Scott’s Napoleon yet?
Here are a few great Napoleon quotes:
"Never interrupt your enemy when he is making a mistake.".
"Death is nothing, but to live defeated and inglorious is to die daily.".
"History is a set of lies agreed upon.".
"Religion is what keeps the poor from murdering the rich.".
"Impossible is a word to be found only in the dictionary of fools."
David Senra at Founders podcast did a good job discussing the life of Napoleon.
4. The Economist had a useful piece last month discussing: “How the young should invest”. It discussed the key themes and trends that young investors, and those starting to save, should be aware of.
Here are the main points:
Basic Investment Principles: The importance of starting early to utilise compound interest, cutting costs, diversifying, and maintaining a steady investment strategy during market fluctuations. Focus on informed and strategic decision-making to navigate the current economic landscape.
Lower Return Expectations: Young investors today are likely to see lower returns compared to past generations. Historically high returns on global shares and bonds are not expected to continue due to changing global economic trends, such as reversed globalisation, rising inflation, and higher interest rates.
Future Investment Challenges and Traps: Risks and traps like setting unrealistic return expectations based on recent market performance and saving too little for retirement, combined with holding excessive cash, avoiding bonds, and succumbing to thematic investing fads like ESG.
5. Winston Churchill wrote: “However beautiful the strategy, you should occasionally look at the results.”
This is how Fernando del Pino began his magnificent and brilliant essay entitled “The Five Experiments.” Del Pino is one of the sons of the late Rafael del Pino y Moreno, the founder of Spanish infrastructure giant Ferrovial, and has written a blog for years.
The Five Experiments, is a speech he gave in June 2015 and reflects the author’s view of a multi-generational decline of Western civilization through the lens of five key societal changes:
Universal Suffrage and Unlimited Democracy: Del Pino questions the wisdom of universal suffrage, noting its recent historical emergence and potential flaws. He argues that equalizing the voting power of vastly different individuals could lead to a perversion of democracy and cites historical examples where democracy led to negative outcomes.
Big Government and the Welfare State: The essay links the expansion of government and the welfare state to the rise of democracy, noting the increase in public spending and taxation. Del Pino argues that these developments have led to a significant shift from the limited government spending of the past, with potential negative implications for societal wealth and freedom.
Gigantic Indebtedness: Del Pino points out the historical shift towards massive public and private debt, a trend he considers alarming. He discusses the historical context of borrowing and debt, highlighting the potential dangers of current debt levels.
Crazy Central Bankers and Fiat Currencies: The essay criticizes the practices of central banks and the use of fiat currencies, arguing that they lead to economic instability and the devaluation of money. Del Pino is critical of monetary policies that attempt to control economic cycles, suggesting they could lead to long-term negative consequences.
Living without God: The final experiment discusses the move away from religious beliefs and principles in Western societies. Del Pino is concerned that this shift has led to a loss of moral absolutes, human dignity, and the concept of inalienable rights, potentially leading to a society governed by arbitrary human majorities.
Del Pino's overarching thesis is that these experiments, conducted in the name of progress and freedom, may actually be contributing to the decline of Western civilization. He worries about the erosion of freedom, responsibility, and moral constraints, potentially leading to a society governed by "ruthless arbitrary tyrants."
6. David Brooks has a new book out titled:"How to Know a Person: The Art of Seeing Others Deeply and Being Deeply Seen”.
It emphasizes the importance of social skills, particularly the ability to genuinely understand and see others. In a world increasingly characterized by dehumanization, Brooks underscores the vital role of recognizing and appreciating the individuality of others. He describes this understanding as foundational to being a good person and essential for the health of society.
Brooks argues that human beings have an intrinsic need for recognition, comparable to the need for food and water. The failure to see someone, rendering them invisible or unimportant, is considered one of the cruelest forms of punishment. Conversely, being seen and understood is incredibly fulfilling. When someone recognizes and mirrors back our strengths and beauty, it fosters growth and resilience.
The book also highlights the inadequacy of our social skills in today's diverse societies. Brooks, through his journalistic experience, notes that many people feel invisible and disrespected due to systemic inequities and misunderstandings across various divides, such as racial, political, and social.
He categorizes people into two types: "Diminishers," who fail to see others as individuals and often use them for their own ends, and "Illuminators," who have a genuine curiosity about others and the skill to understand them, thereby making them feel respected and acknowledged.
Brooks suggests that most people overestimate their ability to understand others. Research indicates that even close friends and family members accurately read each other's thoughts only about 35% of the time. This lack of understanding often leads to stereotyping and misjudgments, contributing to a sense of being misunderstood or invisible.
It challenges readers to assess their own abilities as either Diminishers or Illuminators and to strive for deeper empathy and understanding in their interactions with others.
Here he is discussing his book two weeks ago:
7. In continuing my journey in the Art world, this week I finished the MOMA course on Coursera titled: Seeing Through Photographs.
This course, focuses on the significance and understanding of photography. It features a study of 100 photographs from The Museum of Modern Art's collection, offering behind-the-scenes insights and artist studio visits through films and interviews.
The course covers various perspectives on photography's use over its 180-year history, including artistic expression, scientific exploration, documentation, storytelling, and communication.
8. If you are looking for a different artistic experience, I highly recommend Marina Abramovic’s exhibition at the Royal Academy, which I have now visited twice.
Thank you Kartik for the intro.
B. The Technology Section
1. Andrej Karpathy, an AI OG shared a 1-hour general-audience introduction to Large Language Models: the core technical component behind systems like ChatGPT, Claude, and Bard.
What they are, where they are headed, comparisons and analogies to present-day operating systems, and some of the security-related challenges of this new computing paradigm.
Heavily shared and recommended in AI community.
2. Pippa Malmgren wrote a piece titled: Q* + Tigris = ?
The article discussed Sam Altman's vision for OpenAI and its potential impact on AI technology and global power dynamics. Altman, prior to his firing from OpenAI, was reportedly close to a breakthrough with an algorithm named Q* (Q-Star), which was believed to be powerful enough to threaten humanity. His vision extended beyond this breakthrough to creating an integrated supply chain for AI, combining elements like AI chips, phones, robotics, and large data collections.
Altman's Collaboration with Tech Firms: Altman's plan involved collaboration with companies like LoveFrom, Cerebras Systems, and G42. LoveFrom, led by Jony Ive, is noted for its design prowess, while Cerebras Systems has made significant advancements in AI chip technology. Cerebras has developed a powerful chip, the WSE-2, significantly surpassing existing GPUs in terms of transistors and cores. This advancement is crucial for handling large-scale AI models and massive data sets, positioning Cerebras as a competitor to NVIDIA.
Humanoid Robotics and AI Integration: Altman's interest in humanoid robotics, including investments in companies like 1X, indicates a move towards integrating AI into physical forms, potentially challenging established players like Boston Dynamics. This posits the emergence of 'shardware' – a combination of software and hardware – as a new frontier in technology investment, representing the integrated AI supply chain Altman envisioned.
Altman’s ouster and Geopolitics: The developments have raised concerns among US authorities, particularly given the potential challenge to NVIDIA and the reliance of US national security on NVIDIA's technology. The involvement of non-US investors and companies in critical tech and supply chain creation could signify a shift in global technological power. It seems an interesting coincidence that Xi and Biden met on November 15th and agreed to play nice, and the Altman fiasco happened on the 17th.
3. Stifel had a great 132-page report on Biotech.
The Key Ideas:
Current Investment Landscape: Today's biotech sector is in a better position for investment compared to 20 years ago, with higher odds of approval for genetically identified drug targets. Over 200 life science companies are trading below cash, indicating potential undervaluation and investment opportunities.
Pharma Patent Expiries: Many pharmaceutical patents are expiring, potentially leading to increased opportunities for biotech companies. There's a significant potential for mergers and acquisitions in biotech, given the large amount of capital available among top pharmaceutical companies.
Shift to Life Sciences: We are entering a multi-decade period driven by life sciences, marking a shift from the previous two decades dominated by technology. There is a significant increase in biomedical knowledge, creating opportunities in genetic medicine, cellular therapy, and other advanced medical technologies.
The report discusses various technologies with the potential to change civilization, such as autophagy enhancers, gene editing, and bioelectronics.
Thank you Yaser for sharing.
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Have a great weekend.