A Few Things....

September 4, 2019

A. What is our reality ?

Reality like truth is a very hard thing to know. A lot of noise and abstractions get layered on to the objective reality of our world, especially today when we are touching the world through our niches and specializations.

Has the world been misinterpreted by us ? Is our understanding of the world based on the ‘bubble’ we live in ? and since we live in a our own bubbles of knowledge and career silos, how much of our thinking is bounded by those realities.

Do those boundaries limit our ability as a people, a country and planet to dream bigger ?

It is with this reality that I stumbled into Eric Weinstein’s podcast with Peter Thiel.

It’s a very interesting discussion, because while some might say the new ‘normal’ is driven by a long-term trend upon which governments have little or no control: declining populations (in many countries around the world) and ageing.

Thiel has a very different take, one that I can see the truths of.

His view is that we have been stuck in this secular stagnation, where we have really had half century of slow progress. Yes bits & bytes are moving fast, but atoms are stuck. It’s like we have got the Star Trek computer in our hand, but nothing else from Star Trek exists.

The many financial bubbles we have seen have just hidden the realities of the stagnation we have been in. It is this secular stagnation and lack of productivity growth that is leading to governments blowing bubbles to potentially hide the real lack of progress. In addition because we live in this hyper specialized and silo’d world it’s easy for us to miss the issue. We all think the BIG progress is happening ‘over there’.

I think it’s also been easier for the ‘1%’ to not face this reality, because it seems to be working fine for us. But the barbarians are at the gate, because this reality isn’t working for everyone.

If you accept this as truth, then you have to ask yourself, why it happened and what do we do to get out of it.

Thiel blames the large institutions that stopped innovating, when the physical sciences were slowing down (mostly because the smartest mind left scientific fields) and the financialization of the economy allowed for rising debt to paper over many problems.

So what do we do now ? He recommends, changing our culture firstly where we get rid of our idea of political correctness & scapegoating - there are simply lots of issues we don’t dare talk about or problems that get reduced to ad hominem attacks. A lot of us can’t say what we believe. After that we need more institutions that innovate, more focus on hard physical sciences and a greater focus on multi-disciplinary knowledge rather than our narrow niches.

Ever since I was a child I’ve tried to approach the world like a Aristotle or Munger (albeit with MUCH MUCH fewer IQ points) - with a focus on multi-disciplinary learning. To know little bit about a lot of things and try to understand the world broadly and how it works as a whole. This talk helped confirm some of my feelings.

What do you think ? Are we stuck in a secular stagnation and how do we get out ?

B. Alchemy is defined as the seemingly magical process of transformation, creation, or combination.

This weekend I read Rory Sutherland’s new book - Alchemy: The Surprising Power of Ideas That Don’t Make Sense. Rory is well known for his many other books and his TED talks, with over 6 mm views.

This book is a more practical application of ideas you might have picked up from Thaler, Kahneman or Cialdini.

It really is a super surprising book and one that I will read again. The core thesis of the book being that a rational, scientific lens is not always the right way to view the world.

The world is not entirely rational. It’s important to step back and see what’s working, rather than what you can rationally explain.

He has a page for example on how no big business idea makes sense at first. Imagine proposing the following ideas to a group of skeptical investors:

  1. ‘What people want is a really cool vacuum cleaner.’ (Dyson)

  2. ‘….and the best part of all this is that people will write the entire thing for free!’ (Wikipedia)

  3. ‘…and people will be forced to choose between three or four items.’ (McDonalds)

  4. ‘And, best of all, the drink has a taste that consumers say they hate.’ (Red Bull)

There are four main reasons why we have evolved to behave in seemingly illogical ways, they are: Signaling, Subconscious hacking, Satisficing and Psychophysics. Won’t go into those for now.

A quote from the book to finish:

“For a business to be truly customer-focused, it needs to ignore what people say. Instead it needs to concentrate on what people feel”

If you just want to watch a video, then his recent presentation at Nudgestock is great.

3. A few things worth checking out:

A. Ben Thompson is one of the best strategic thinkers and writers around technology, business and strategy. His recent post on “What is a Tech Company?” is a great read. He looks at how companies have changed and what sort of companies VC’s really want to fund. He covers WeWork, Peloton, Uber and others and compares Clayton Christensen’s Sustaining vs Disruptive Innovations. A good quote from it:

“Venture capitalist fund tech companies, which are characterized by a zero marginal cost component that allows for uncapped returns on investment”

B. Crypto is something I’ve been following for a while and now with the financial system in the state it’s in and the macro market sending some wacky signals it’s well worth listening to Dan Tapiero (worked with Stevie Cohen, Julian Robertson, Stan Druckenmiller and others) discuss Macro Investing and Crypto in this August discussion. A great wide ranging conversation.

C. Great piece by the CIA on the Psychology of Intelligence Analysis.

D. The legendary trader Paul Tudor Jones set up the Robinhood foundation to focus on poverty. They do an annual meeting, and some of the videos from those events just got released. Some hedge fund greats here.

E. Love the idea of moats and Buffett usually talks about in the context of businesses, but what about personal moats. Great tweet storm by Erik Torenberg on it.

F. Do you have a hard time falling asleep, check out this 4,7,8 breathing technique by Dr. Andrew Weill that my friend Andre K found very helpful.

Quotes I’m thinking about:

“Wisdom flows into the humble man like water flows into a depression”

- Lao Tzu

“Collecting the dots. Then connecting them. And then sharing the connections with those around you. This is how a creative human works. Collecting, connecting, sharing.”

- Amanda Palmer

“Freedom is being disliked by other people. It is proof that you are exercising your freedom and living in freedom, and a sign that you are living in accordance with your own principles. Conducting yourself in such a way as not be disliked by anyone is an extremely unfree way of living.”

- Ichiro Kishimi and Fumitake Koga in ‘The Courage to be Disliked” (2013)

Thanks to Phil Ordway for the reminder - check out his great collection below