183: AirPods Decision, Ben Graham's Cigars vs GEICO, Google GCP Take Rate, Bill Brewster, Nick Kokonas, Talking Horse, Mr. Rogers, and Isaac Asimov & HIV/AIDS

"I might teach the horse to talk."

Movements need enemies.

They will invent some if they can't find any.

—Stoic Emperor

🏰 I’ve tried to develop the reflexive habit that any time a comparison between two things is made (“bitcoin is just like gold”, “the same thing happened during the dot-com bubble”, “it’s just like the GFC”), I ask:

“Is that a good comparison to make? Does it make sense? Why are these things alike? What are the significant differences?”

It can be easy to unthinkingly accept the premise that someone gives you, especially if they sound really confident and authoritative, and then build a huge chain of logic on top… that all falls down if it turns out that the foundations were flawed.

Building castles on sand, etc.

Reasoning by analogy can be quite useful, but one of the many ways it can break down is at this level (the assumption that two things are more alike than they actually are).

The other main way is at the other extreme, the argumentum ad absurdum where an idea is pushed to such extremes that it breaks down. Then you have to wonder if reality is less extreme and may not break down.

h/t OG supporter (💚 🥃 🎩) Nick Ellis for the discussion on this

🎧 Many of you had opinions and anecdotes about AirPods after my requiem in edition #182. I love it, thanks for sharing!

I thought about an analogy (see above, reasoning by analogy). I promise this is going back to AirPods.

A few years after I first got into photography, I bought a DSLR (digital single-lens reflex camera — basically a big camera that goes “click” when you take a photo because there’s a mirror flipping inside, and you can change the big lens in front. Nowadays, a lot of the fancy cameras are mirrorless).

It took amazing photos compared to the little consumer-grade digital camera I had before, and even when I eventually got my first smartphone (the iPhone 7), there was no contest, the DSLR reigned supreme.


The iPhone was always in my pockets, so I still took lots and lots of photos with it because it was always there. I tried to bring the big camera to events and keep it close to where my kids played so I could grab it when a moment arose, but the battle was convenience vs quality.

Apple kept iterating on its camera systems each year, making them better through clever optics, better sensors, and throwing vast amounts of computational power at the image-processing pipeline to do things that were simply impossible before, on top of adding lots of great computational photography tricks (ie. you take multiple photos at the same time, determine which ones are best, fuse part of them together, take multiple exposures and combine them in a single HDR image, extra sub-pixel details from multiple shots, etc). The improvements are especially notable in low-light settings, aka indoors, which is where a lot of photos of kids who aren’t standing still for a nice posed photo are taken.

Eventually, the quality difference between my DSLR and the iPhone in my pocket wasn’t large enough to overcome the ‘activation energy’ required to go get the big camera, and without really ever making a conscious decision to do it, I kind of stopped and now pretty much all my photos are taken with my iPhone 12 Pro.

Back to AirPods…

Years ago I went down the audio rabbit hole (thankfully avoided going full-blown audiophile like those obsessing over speaker cable metallurgy and other voodoo). I’ve researched speakers and integrated amps and headphones before. If I wanted good headphones, I kinda knew in which directions to look (certain models by Sennheiser, Grado, B&O, Plantronics, Sony, etc), but I never got over the ‘activation energy’ because there was always too much friction with headphones — like with a big DSLR camera.

I knew the sound quality would be great, but I didn’t want to carry them around and big headphones can be warm/uncomfortable if you listen for hours.

I was fine listening to music on speakers at home and to podcasts/audiobooks on the regular Apple wired Earpods because for voice, their sound is plenty good, and they’re very portable.

AirPods are like that really good iPhone camera. You always have them with you, you can take them in and out in seconds — they go “boing” and they’re ready to go — and they sound fine (which is what makes me curious about the AirPods Pro… Probably is pretty cool to have better sound for music and noise cancellation for noisy environments 🤔).

Update: I lasted all of 2 days on wired headphones before ordering Airpods Pro. Found them $80 CAD cheaper on Amazon Canada than directly from Apple (sold and fulfilled by Amazon itself, with reviewers assuring me it was the real thing — you can check serial number with Apple once you get them — so it was a no-brainer).

I’ll give my review of the Pros vs the regular ones once I’ve used them for a while.

🏃‍♂️🚶🏻‍♂️Do you ever feel like you’re trying to *sprint* a marathon?

I think I’d rather be the person walking the marathon than the person trying to sprint it…

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Ben Graham: Cigar Butts vs GEICO

I was having a discussion with my friends MBI and Rishi (💎🐕) about how such a large part of Ben Graham’s returns came from his investment in GEICO, not the cigar butts/net-nets for which he’s better-known.

MBI pointed out that while it’s an interesting fact, almost everybody’s very long term returns will exhibit a power law distribution, with some investments doing a lot better than others and resulting in a large fraction of the returns (unless you do it wrong and constantly sell your winners… ¯\_(ツ)_/¯ ).

Rishi pointed out that what made it notable in this case is that Graham mostly wrote about this other style of investing, while he made a ton of money with this high-growth, high-quality business. So the perception of many of his followers doesn’t quite match the reality (not in a nefarious way, but it’s still an interesting discrepancy).

My own guess is that Graham probably didn't write about it because he didn't know how to duplicate this kind of investing again and again, and he was very focused on providing a system to others. He cared highly about being a teacher (something he passed on to Buffett), and didn’t know how to teach this — which isn’t surprising since even today, this type of growth/quality investing is still a very qualitative, fuzzy thing without a real formula, and it’s harder to be sure you have a big margin of safety, which was all-important to Depression-era Graham.

You can try to approximate part of “quality investing” with something like Joel Greenblatt’s formula, which looks at metrics like ROIC and valuation to get a mix of probably-undervalued-probably-quality companies, but that’ll have a lot of false positives (ie. businesses that screen well, but it’s all backwards-looking and the future is terrible, but that won’t be picked up yet by the numbers) and false negatives, and is more about investing in a large basket of this “factor” than about “investing in stocks like you own the whole business for the long-term” — in other words, this formula isn’t really replicating what most growth/quality investors do.

GCP’s Take Rate 📉

Google is reducing the amount of revenue it keeps when customers buy software from other vendors on its cloud marketplace, as the top tech companies face increasing pressure to lower their so-called take rates.

The Google Cloud Platform is cutting its percentage revenue share to 3% from 20% (Source)

I think this is going to be good for all involved, and hopefully creates ripples elsewhere. (That 3% is probably just about covering payment processing.)

Interview: Bill Brewster

Friend-of-the-show and supporter (💚 🥃) Bill Brewster interviewed by another friend-of-the-show and supporter (💚 🥃) Rob Koyfman.

Small world! Always great to see two great people get together for a good conversation.

And it’s nice that they talk about stuff I don’t talk to much about here (marijuana ETF and Qurate. Also Google, but that one I write about).

(Rob is the CEO of Koyfin, a company/product I love so much that it was actually my first ever private investment)

Interview: Nick Kokonas of Alinea and Tock, “Prestige is a false currency” Edition

I’ve enjoyed every podcast interview of Nick that I’ve heard, and watched the Netflix episode of Chef’s Table about him and his remarkable partner Grant Achatz twice.

This interview by Sean DeLaney slots in right with the others. I like Nick’s mind, his approach to life and how he thinks. I wish I could meet him someday. Check out the interview:

“If something has a 5-10% chance of happening, but it’s catastrophic, you have to turn 100% of your attention to that thing.”

Love the part where he discusses how “Prestige is a false currency”. He points to this essay by Paul Graham about How to Do What You Love. Here’s some highlights from it:

By the time they reach an age to think about what they'd like to do, most kids have been thoroughly misled about the idea of loving one's work. School has trained them to regard work as an unpleasant duty. Having a job is said to be even more onerous than schoolwork. And yet all the adults claim to like what they do. You can't blame kids for thinking "I am not like these people; I am not suited to this world."

Actually they've been told three lies: the stuff they've been taught to regard as work in school is not real work; grownup work is not (necessarily) worse than schoolwork; and many of the adults around them are lying when they say they like what they do. [...]

What you should not do, I think, is worry about the opinion of anyone beyond your friends. You shouldn't worry about prestige. Prestige is the opinion of the rest of the world. When you can ask the opinions of people whose judgement you respect, what does it add to consider the opinions of people you don't even know?

This is easy advice to give. It's hard to follow, especially when you're young. Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. It causes you to work not on what you like, but what you'd like to like.

This is very much aligned with René Girard’s theories: people don’t want to do something, they want to be something, or at least be perceived as being that thing.

Prestige is just fossilized inspiration. If you do anything well enough, you'll make it prestigious. Plenty of things we now consider prestigious were anything but at first. Jazz comes to mind—though almost any established art form would do. So just do what you like, and let prestige take care of itself.

Prestige is especially dangerous to the ambitious. If you want to make ambitious people waste their time on errands, the way to do it is to bait the hook with prestige. That's the recipe for getting people to give talks, write forewords, serve on committees, be department heads, and so on. It might be a good rule simply to avoid any prestigious task. If it didn't suck, they wouldn't have had to make it prestigious.

Similarly, if you admire two kinds of work equally, but one is more prestigious, you should probably choose the other. Your opinions about what's admirable are always going to be slightly influenced by prestige, so if the two seem equal to you, you probably have more genuine admiration for the less prestigious one.

Oh, and also, another fun bit of crossover: In edition #178 I posted a great interview with Jack Muise of Maui Nui Venison.

In this interview, Nick Kokonas mentions trying this product and loving it so much that he had Alinea add it to its menu and he invested in the company.

Always feels good to see good people/companies find each other and collaborate. Win-win.

Every race is a practice for the next race

I like that, that’s good framing. Play the long game, iterate, focus on the journey/process not the destination, don’t waste opportunities to learn, etc

Of course, replace “race” with whatever matters to you… “Every investment is practice for the next investment”.

🐴 The King’s Talking Horse, Optionality Edition 🤴

This one is all friend-of-the-show and OG supporter (💚 🥃 🎩) Nick Ellis, who sent me this story to illustrate optionality, and it reminded me of how we often talk about optionality in very abstract terms, and those who are new to the concept — as we all once were — may have a harder time understanding what it means.

So it’s good to have a kind of object lesson to illustrate. Here’s the story:

Many years ago in a far away country a wise old teacher was in trouble with his King. The King sentenced the teacher to death, but listened to the teacher's appeal.

The teacher pleaded for the King to give him five years in which to teach the King's horse to talk. The King liked to own unusual things and a talking horse would certainly be unusual and after considerable thought said "yes".

A friend of the teacher said to the teacher "Why did you make such a rash promise? You know no one has ever taught a horse to talk." The teacher said in reply: "Sometime before the end of five years:

1. The King might change his mind and pardon me.
2. The King might forget that he sentenced me to death.
3. The King might die.
4. I might die.  The horse might die.
5. I might teach the horse to talk.
6. Something else....

In any event, I gain five years."


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How to talk to kids, Mr. Rogers Edition

I grew up watching Francophone TV in Québec, only learning English starting around 15yo, so I never really knew Mr. Rogers the way many Americans did growing up (I’ve seen plenty of Passe Partout, though).

But Fred Rogers is so part of the culture that I kinda picked up on him over time, and saw the movie about him (played by Tom Hanks).

His empathy and emotional intelligence def were off the charts, and he should be learned form. This piece about him has a nice step-by-step process to explain how he would take what he wanted to say, and reframe it in a way that would make a lot more sense from the point of view of a small kid:

  1. “State the idea you wish to express as clearly as possible, and in terms preschoolers can understand.” Example: It is dangerous to play in the street. ​​​​​​

  2. “Rephrase in a positive manner,” as in It is good to play where it is safe.

  3. “Rephrase the idea, bearing in mind that preschoolers cannot yet make subtle distinctions and need to be redirected to authorities they trust.” As in, “Ask your parents where it is safe to play.”

  4. “Rephrase your idea to eliminate all elements that could be considered prescriptive, directive, or instructive.” In the example, that’d mean getting rid of “ask”: Your parents will tell you where it is safe to play.

  5. “Rephrase any element that suggests certainty.” That’d be “will”: Your parents can tell you where it is safe to play.

  6. “Rephrase your idea to eliminate any element that may not apply to all children.” Not all children know their parents, so: Your favorite grown-ups can tell you where it is safe to play.

  7. “Add a simple motivational idea that gives preschoolers a reason to follow your advice.” Perhaps: Your favorite grown-ups can tell you where it is safe to play. It is good to listen to them.

  8. “Rephrase your new statement, repeating the first step.” “Good” represents a value judgment, so: Your favorite grown-ups can tell you where it is safe to play. It is important to try to listen to them.

  9. “Rephrase your idea a final time, relating it to some phase of development a preschooler can understand.” Maybe: Your favorite grown-ups can tell you where it is safe to play. It is important to try to listen to them, and listening is an important part of growing.

Wow, reread #1, and then #9 again. It’s one of these things that seems simple, but is very hard to do, especially on the fly and consistently. Any parents of young kids will probably understand what I mean here.

🐦 Twitter Making the World a Village, No You’re Crying Edition

Check out the reply to this tweet by Charlotte Hiby:

Quoting the thread here to save you a click:

Charlotte (Nurse): Wow - that gives me goosebumps! As a nurse who looked after Maggie all those years ago, I can’t tell you how much this post means. Have an amazing time Maggie!

Martin: Wow!! Me too. Thank you for your message... can I assume that you are one of the Charlotte / Charlie team who stepped in after an anaphylactic reaction to chemo ... and so gave my other daughter Charlie her name?

Charlotte: Yep that’s me! I have never forgotten that night. Every year when I do my life support training and they ask “has anyone any experience of anaphylaxis” I think of Maggie.

And I had no idea that is how Charlie got her name how lovely 😊

Martin: Yes that's exactly why!!!! It reminds us of the things you both did!!! Until that moment she was going to be Lily. She's a much better Charlie / Charlotte!!! Here they are!!!

Charlotte: Wowzers - what gorgeous girls! I have forwarded this thread onto the other Charlie who is equally delighted 😊. Nursing in that field often leaves you not quite sure how things turned out, so to see Maggie heading off to Uni is incredibly special.

Martin: Thank you. I am so pleased you got in touch. Please pass on my heartfelt thanks to Charlie too!!! It all feels like yesterday but of course the girls are all grown up and, for us, it turned out OK.

h/t Anna Gát

🎨 & 📜

Hammering a Hammer into a really cool Axe

I just love how creative and resourceful good crafstpeople are. Check this out:

For those of you who still have time to play video games (sorry, I’m just here writing newsletters for you 24/7), you may recognize the final product as Bloodhound’s Heirloom in Apex Legends:

The blacksmith is “Yellow Goose Forge Blacksmith” (more of his work if you follow that link), a self-described:


“Creativity is contagious, pass it on”

I love that last line in his bio. So true. I’m doing my best.

Isaac Asimov & HIV/AIDS

The Foundation series by Isaac Asimov is probably the first science-fiction that I’ve ever read.

It hooked me and then I read a bunch of his other books, including his autobiography ‘I, Asimov’, which I remember liking quite a bit (but it was a long time ago and memory is fuzzy).

I had no idea about this, and it was quite a shock to see this on his Wikipedia page:

In 1977, Asimov suffered a heart attack. In December 1983, he had triple bypass surgery at NYU Medical Center, during which he contracted HIV from a blood transfusion. When his HIV status was understood, his physicians warned that if he publicized it, the anti-AIDS prejudice would likely extend to his family members. He died in Manhattan on April 6, 1992, and was cremated.

His brother Stanley reported the cause of death as heart and kidney failure. The family chose not to disclose that these were complications of AIDS, because within two days, on April 8, Arthur Ashe announced his own HIV infection (also contracted in 1983 from a blood transfusion during heart bypass surgery), which resulted in much public controversy additionally, Asimov's doctors continued to insist on secrecy. Ten years following Asimov's death, after most of his physicians had died, Janet and Robyn Asimov agreed that the HIV story should be made public; Janet revealed it in her edition of his autobiography, ‘It's Been a Good Life’.

So sad that he had to go through this in secret, at a time before we developed the cocktails of life-saving HIV drugs that we have today 😔