#1 - Building The New World
On the imposter syndrome, stock selling, reflecting, and ergodicity
Hey everyone,
Greetings from The Curious Cat.
Welcome to the first edition of the newsletter.
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It’s Time To Build
Whenever Marc Andreessen writes an essay, we read it. In this essay, Andreessen writes about the unpreparedness of all institutions to tackle the coronavirus pandemic. Andreessen pins a part of the problem as a failure of imagination and a part to smug complacency in the Western world. A large chunk of Andreessen’s criticism is directed towards both sides of the political spectrum as he criticizes both the left and the right for their respective shortcomings. Andreessen concludes with a strong exhortation to everyone to ask more from each other - build directly, help others build, teach others to build, and take care of people who are building. He concludes by mentioning that -
Our nation and our civilization were built on production, on building. Our forefathers and foremothers built roads and trains, farms and factories, then the computer, the microchip, the smartphone, and uncounted thousands of other things that we now take for granted, that are all around us, that define our lives and provide for our well-being. There is only one way to honor their legacy and to create the future we want for our own children and grandchildren, and that’s to build.
Read the entire article here
How Tech Can Build
As a response to Andreessen’s essay, Ben Thompson writes on the paradigm shifts that can happen in tech by the call to ‘build’. Thompson writes that tech should embrace and accelerate distributed work, invest in real-world companies that differentiate investment in hardware with software, and figure out an investing model that is suited to outcomes that have a higher likelihood of success along with a lower upside.
We need to figure out how to build real businesses that build real things, not virtualize everything. And we need to start fighting for not just infinite upside, but the sort of minute changes in cities, states, and nations that will make it possible to build the future.
Read the entire article here
The Great Reset
Another fascinating response to the Marc Andreessen essay where Martin Gurri argues for structural reform of institutions. The coronavirus pandemic has exposed the anachronic nature of the scientific and political institutions which worship process adherence and bureaucratic deliberation. Gurri writes that the institutions at every level must crack open their industrial-age cocoons and join the rest of us in the digital dispensation. Gurri argues that the Constitution is a barrier towards strong reform due to the doctrine of separation of powers and that failures have been on the implementation and regulation spheres of the government. One example of dysfunction is of political parties where he advocates for a digital party community with a combination of Wikipedia-style governance and subreddit-like openness.
We have choices to make and we should face them without flinching. We must summon the will to leave the past behind us, without abandoning our best traditions. And we must adapt our institutions to a flatter, faster world, and build, as Andreessen implores us to do, the products and systems that will sustain American society over the next generation.
In the short term, the most consequential choice is when to re-enter the swirl of events. Much remains unsettled and uncertain, but we know, without question, that when it comes to history, “shelter in place” is not an option.
Read the entire article here
Nobody Knows Nothing
Nick Maggiulli writes that nobody has a monopoly over knowledge and no one is infallible. We create a mythology around famous people and treat them like Gods but the truth is that they are merely human. This realization has never been more apparent than now when a microscopic virus has held the world at ransom despite all our medical breakthroughs, wisdom, and progress. This is a powerful way of overcoming the imposter syndrome where one doubts one’s personal accomplishments and has a persistent internalized fear of becoming exposed. The fear which Mike Ross has in the first few seasons of Suits except that he is an imposter.
Read the entire article here
Memo from Howard Marks - Uncertainty II
The above article ‘Nobody Knows Nothing’ serves as a prologue to the new Howard Marks memo titled Uncertainty II
Marks writes that the most influential exogenous events are unpredictable and the only way to prepare for them is by recognizing that they inevitably will occur, and by making our portfolios more cautious when economic developments and investor behavior render markets more vulnerable to damage from untoward events.
You can view a summary of the notes here
The Art Of Selling Stocks
After a series of contemporary articles, let us look at a useful piece written a few years ago in 2011. Which stock to buy often baffles investors but when to sell a stock is a more difficult question to answer. Sanjoy Bhattacharya recommends that there are four reasons to sell a stock -
A clear deterioration in either earning power or ‘asset’ value.
Market price exceeds ‘fair’ value by a meaningful margin.
The primary assumptions, or expected catalysts, identified prior to making the investment are unlikely to materialize or are proven to be flawed.
An opportunity likely to yield superior returns (with a high degree of certainty) as compared to the least attractive current holdings is on offer.
Read the entire article here
Four Ways To Reflect That Help Boost Performance
Each type of reflection amplifies the power of others. They serve different purposes and occur at different frequencies. Each type of reflection can be thought with a simple yet powerful question.
The Mountaintop Solitary Reflection - Where am I headed?
Leadership Health Check Reflection - How am I doing as a leader?
Looking back on past decisions reflection - Why did we get the results we got?
Scanning the horizon - What is going on outside our company and our industry?
This can be a useful tool to improve your self-awareness and improve your performance in all your professional endeavors.
Read the entire article here
Mental Model For The Week - Ergodicity
Ergodicity is the property of a system. A system is said to be ergodic if a die rolled 100 times has equal probability to 100 dice rolled once; the rolling of a die is considered to be ergodic. Many times we mistake things to be ergodic, however, most of the human systems are non-ergodic.
Investors assume markets are ergodic when they guarantee returns over a time period. In non-ergodic contexts, the concept of “expected returns” is effectively meaningless.
The approach to making yourself more ergodic in different scenarios is through diversification. Effective diversification can make non-ergodic situations more ergodic.
Book Recommendation For The Week
Many experts have called the coronavirus pandemic “A Black Swan” event.
The Black Swan by Nassim Nicholas Taleb explains why we are so bad at predicting the future, and how unlikely events dramatically change our lives if they do happen, as well as what you can do to become better at expecting the unexpected.
A Black Swan has three characteristics:
It is an outlier beyond the normal range of expectations because nothing in the past could point to it being likely to happen.
It has a massive impact
Despite #1, we create explanations for it after the fact, making it seem “explainable and predictable.”
Buy the book here
Podcast Recommendation For The Week - Naval Ravikant on The Joe Rogan Experience
After the Spotify deal, Joe Rogan is trending in the past week.
But this podcast launched almost a year ago with fascinating quotes and insights from Naval Ravikant.
You can view some of the notes and quotes here.
If they fascinate you, do watch the podcast on Youtube here
Afterthought
Let us rid death of its strangeness, come to know it, get used to it. Let us have nothing on our minds as often as death. At every moment let us picture it in our imagination in all its aspects……..It is uncertain where death awaits us; let us await it everywhere. Premeditation of death is premeditation of freedom……….He who has learned how to die has unlearned how to be a slave. Knowing how to die frees us from all subjection and constraint
- Michel de Montaigne
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See you next Saturday.
Till then take care and stay safe
Regards,
Team Curious Cat