Information doesn't enter the mind intact like a puzzle-piece slotted into a jigsaw. Instead, it becomes distorted to fit the shape of its container, like water poured into a vessel.
āGurwinder Bhogal
š¤ So is this when Buffett finally starts buying a big position in Amazon?
(this would be on top of Todd and/or Tedās existing ownership)
š¤ š„¦ š« āAlgorithmsā are often blamed for polarization, and that blame flows upstream to those that make the algorithms.
Some of that is probably deserved, but what if things are more nuanced, and some blame should flow *downstream* too..?
Letās say you have a search engine that tries to answer your questions as āobjectivelyā as possible ā itās impossible to be 100% āobjectiveā, because what does that even mean for a human-made thing? How can it not carry the stamp of its creators? But for the sake of argument, letās say itās as close to it as possibleā¦
These algos are trained on human-made data, both the corpus of content on the internet and usage data, to discover where the needles are in the haystack.
What if you give users 10 results, and everybody clicks on #5?
The algo will take that into account and over time, #5 will rank higher, as it seems to be a better answer to that query. People keep clicking more on it, so over time, it migrates to #1 for that search.
Well, what if you originally gave people 9 pretty āobjectiveā answers and #5 was the worst one, some BS inflammatory partisan siteā¦ But that crap goes up the search rankings over time because humans have a revealed preference for it over more boring, but more accurate sources..?
I fear thereās truth in there, and it *partly* explains some of what is happening.
Not all of it, but I donāt think the users who create the data-points used by those machine learning algos are entirely free of blame in all this. A trained ML model canāt help but reflect the data on which it was trained š¤ (itās just a lot politically harder to point the finger at āhuman natureāā¦)
You can try to offer people broccoli š„¦ over and over again, but if thereās also candy š« nearby, chances are many will reach for the candyā¦
(btw, Iām NOT saying thereās no problem, nothing should be done, etc. Incentives matter and we could probably do MUCH better. Just pointing out one under-discussed aspect of this dynamic)
š·āāļøšŖš ā”ļø Reader and supporter (š š„) David Goldberg educated me about the existence of whole-house surge protectors.
Theyāre small boxes that are connected to a houseās electrical panel ā get an electricianās help! ā and if thereās ever a big surge, the kind that can damage electronics and even large appliances, this will absorb all or part of it (depending on how severe it is).
Itās not a panacea, but for a few hundred bucks, it seems like fairly cheap insurance, especially if you live somewhere that has a lot of power spikes.
Note: It doesnāt replace the other surge protectors inside power strips that I hope you already have to protect your stuff. Itās a complement to them.
š š„ I frequently hear variations on this from new supporters:
I've been meaning to become a supporter for a while, but just never did it for whatever reason... I kept procrastinating on filling out the payment stuff--it's always annoying to fill those forms.
Then I pressed the subscribe button on my phone and saw it had Apple/Google Pay and it took 3 seconds! It wasn't the money, the amount is immaterial, it was the friction!So if you are repulsed by filling out forms, click this button on your phone and get your face/fingerprint scanned, itāll be painless:
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Investing & Business
Under the hood of the Nasdaq Index š
You probably know the one about the man who drowned in a river only 4 feet deep *on average*.
Averages can hide a lot of what is going on below the surface. The chart above, via Jason Goepfert, shows some of what is going on āinsideā the Nasdaq:
More than 45% of stocks down 50%
More than 22% of stocks down 75%
More than 5% of stocks down 90%.
Mark Leonard on āSeven lessons from a late-starting entrepreneurā š§āāļøš
Nice little note on the VMS Fund website (Constellationās new venture arm) website, riffing on a Financial Times piece on ālate starting entrepreneursā.
Here are the main points:
Ideas are great, but execution is all
what distinguishes success from failure is rarely the quality of the idea itself but how well it is executed.
Your new boss is the market
When you work in a big company, you need to please your boss. Whether or not you climb the corporate ladder often depends on how well your words and actions rhyme with your bossās narrative rather than the results you achieve. But when you launch a start-up, you do not have someone above telling you what to do. The only judge of your performance is the reality of the market, which is arguably more honest but invariably more brutal. Are you producing something that enough people are prepared to pay for to keep you in business? If not, youāll soon be fired by your disembodied new ābossā.
Find fellow travellers
Treasure patient backers
Learn from mistakes quickly ā or die
Another liberating lesson is that you do not need to know all the answers when you start. Indeed, the core methodology of a start-up is experimenting, and failing, fast.
āHappiness is positive cash flowā
Water on granite
Highlights from Mark Leonardās note:
I was an intrapreneur, and I didn't start a business until I was 39 years old, so I saw myself in John.Ā
The article enumerates the lessons learned in John's three-year start-up experience.Ā Without doing complete justice to John's article, his lessons that struck me were:
Your business's demands will far outstrip your own skills, determination, and energy.Ā You'll need a team.Ā They need to be enthusiastic, hard-working, critical and challenging.Ā The challengers are the hard ones to findā¦ most of us are taught to avoid confronting the boss with his occasional abject stupidity.
You are going to make lots of mistakes, often in parallel.Ā You'll need to recognise and learn from those experiences in the midst of constant crisis.Ā
Don't give up: if you are getting out there, customers and prospects are going to tell you what they need.Ā Listen to their feedback and keep trying. [...]
I'll leave you with a quote from his article:
"The past three yearsā¦ have been the most exhilarating, unnerving, frustrating and rewarding I could imagine."
h/t friend-of-the-show Pearnick (š)
š„¤A Coca-Cola Riddle Answered
In edition #273, I wondered why Coca-Colaās stock spiked during the dot-com era while Pepsi didnāt.
A few helpful readers (thanks Philo, Mike, Snarkout š) pointed out that at the time, Coke was spinning out its bottling operations to make themselves more asset-light and higher margin, which the market really liked at the time.
Thanks to financial engineering fancy-footwork šŗ, they got Wall Street to value some of these one-time gains as if they were indicative of longer-term earnings growth, something similar to what GE was doing at the time (*tsk tsk tsk*).
Im-Balance Sheet š
Steve Clapham writes:
Best bit of [the Berkshire Hathaway] meeting for me was the revelation that the Salomon Bros balance sheet didnāt balance for 12 years so they just used a plug number. Auditor Arthur Andersen went on to audit Enron.
Human Nature, Exhibit #29A š¤¦āāļø
CAPEX, head-spinning edition šµāš«
My friend MBI (šš) writes:
āmy head sort of starts spinning every time I update this table.ā
From the Amazon Q1 call:
Capital investments were $61 billion on the trailing 12-month period ended March 31. About 40% of that went to infrastructure, primarily supporting AWS but also supporting our sizable Consumer business. About 30% is fulfillment capacity, primarily fulfillment center warehouses. A little less than 25% is for transportation.
Banana for scale: AWS is now at a $74bn run-rateā¦ š
Science & Technology
Liberty Hydroponics, Inc šØāš¾
Iām trying something I saw onlineā¦ letās see if I can grow a second batch of green onions from this (I hear from many others on Twitter that it works just fine).
Iām doing it half for the onions, and half because my kids will think itās cool that we grew food in a water glass.
Itās also a good occasion to re-up something by Richard P. Feynman (are those initials familiar? Mm?) that I posted in edition #49, which applies to this, because our intuition is that things grow from the ground, and so something growing in a glass of water will be āstarvedā:
āThe stuff of the tree is carbon, where does that come from? It comes from the air. People look at trees and think it comes from the ground. But where does the substance come from? It comes from the airā¦ thereās a little bit from the ground, some minerals and such.ā
Of course, I couldnāt indefinitely re-grow onions from the same roots in a glass of water, but Iām pretty sure that thereās enough of what is needed in the more dense base for at least one or two timesā¦ And if I planted it in soil, I could probably get many years of crops from it. Maybe I should š¤
Oura sold 1 million+ Sleep-Tracking Rings š„± š š“
Hardware is hard. Shrinking what is basically a computer into a ring that you wear on your finger, with sensors to detect heartbeat, temperature, and movement in fine-enough detail to use as proxy in ML models that extrapolate all kinds of physiological parametersā¦ Thatās extra-hard!
Congrats to the Oura team. Iāve been wearing their products for years:
On the heels of Sleep Awareness Week, itās awe-inspiring to consider that weāve delivered one million rings and recorded over 2.5 billion hours of sleep. Iām reminded of a quote from Matthew Walker, Professor of Neuroscience & Psychology at the University of California, Berkeley, and Oura Advisor:
āI was once fond of saying, āsleep is the third pillar of good health, alongside diet and exercise.ā I have changed my tune. Sleep is more than a pillar; it is the foundation on which the other two health bastions sit. Take away the bedrock of sleep, or weaken it just a little, and careful eating or physical exercise become less than effective.ā (Source)
When you track something, it stays more top of mind, you change your behavior to try to get better metrics (a kind of gamification), and you get faster and clearer feedback on how youāre doing and what causes have what effects.
f.ex. if you have an Oura ring, you know what happens to your resting heart rate and HRV and body temperature the night after youāve had a few drinks and that big piece of chocolate before bedā¦
The Arts & History
Anne Applebaum goes to Kyiv, spends time with Zelensky, analyzes Putinās strategy and tactics, etc. šŗš¦ š·šŗ ā
I found this podcast with Anne really interesting.
Another one to file under the-old-days-become-scarily-relevant-again, as Anne has studied the Soviet Union, Russia, and Ukraine extensively for decades (and won a Pulitzer for her work on Gulags):
This is the piece she wrote with Jeffrey Goldberg about her visit to Ukraine:
When we met Zelensky in Kyiv on Tuesday night, he told us the same thing: The optimism that many Americans and Europeansāand even some Ukrainiansāare currently expressing is unjustified.
You can read her latest piece on the psychology of how Russia prepared its population for this war:
ā if you have an Oura ring, you know what happens to your resting heart rate and HRV and body temperature the night after youāve had a few drinks and that big piece of chocolate before bedā¦ā
Thatās why I got rid of my Oura ring. Problem solved! š