The greatest threat to success is not failure but boredom.
As Machiavelli noted, “Men desire novelty to such an extent that those who are doing well wish for a change as much as those who are doing badly.”
—James Clear

📉📈📉📉📉 📈📉📉 ☀️🌧 What a wild ride Mr. Market is offering us lately, eh?

Every investor knows that the market goes up *and* down, but sometimes we tend to forget that latter part of the deal…

There’s no successful investing style that always looks brilliant.

They each have their moments in the sun, and their moments of pain.

It was part of the fine print when you decided to participate in this complex adaptive system that specializes in causing the greatest pain and confusion to the most people when they expect it least (secondarily, the system also allocates capital to businesses).

🕰 ✋🚥⏱🤦‍♀️ Most people don’t understand opportunity cost, or if they do, they don’t implement it enough.

I’m not talking about you, I’m sure you do, but if we were to do a survey on the street, what percentage of responders do you think would have a good working understanding of it that they actually apply in real life?

I had an illustration of this while chatting with my wife about how many meetings she has to attend at her work.

The people who call all of these meetings probably think something like “well, we did some good things at this meeting, we made some progress on XYZ, so it was worth it”.

THAT’S NOT HOW YOU DECIDE IF IT WAS WORTH IT

The real question is, would *all the people attending that meeting have been able to do even better things in the aggregate if they hadn’t been there*?

Not “does this meeting have any value” but “does it have more value than what people would be doing if this meeting didn’t exist”?

The answer doesn’t have to be binary — meeting or no meeting — it can be shorter meetings, more infrequent meetings, meetings with fewer participants, etc. But whatever you do certainly has to be compared to the alternative uses of the time and resources, not to zero time & resources.

📚 🦊📖 📚 I like this drawing from the graphic novel (Amulet book 3) that I’m reading with my son. I kinda wish I could be that fox…

💚 🥃 If you are not a paid supporter yet, here’s to hoping that this is the edition that makes you go:

“Hey, I think I want to support what he’s doing here.”

Thank you for that!

Investing & Business

Better Framing Alpha and Opportunity Cost (Life vs Market)

I’ve been discovering the writings of Jack Raines lately (we had a nice call a few days ago. I think he’ll go far!). Here’s a good one:

A New Definition of Alpha: What does "outperformance" really mean?

He makes good points that are especially applicable to those who are earlier in their journey, both on the career front and the investing side (btw, when he writes “trade”, I read that as “actively invest”):

Which brings me to the opportunity cost of trading. You can spend time learning to trade, or you can spend time developing another skill. But we have a finite amount of time, so you need to choose wisely. The hours you spend trading are, by default, hours not spent developing something else.
The goal is to make more money, remember. By focusing on trading, you are forcing yourself to outperform the indexes. If you can't consistently out-earn market returns, you are both wasting time and missing the chance to work on another skill. [...]
The opportunity cost of trading is, quite literally, the development of any other skill that could help you make more money.

This is so important!

You should make sure to optimize for the right outcome, and properly zoom out to look at the whole system.

Too many people seem to be obsessed with investment returns above all else when they could probably make different trade-offs and optimize other areas of their lives to get a better *overall* result (which can include quality of life, not just absolute dollar amounts).

For example, maybe some of the time & energy spent on the market could be better deployed getting your expenses under control and improving your skills/career capital, or investing into the relationships that will have a huge impact on life satisfaction.

True alpha isn't outperforming the S&P's percent return. True alpha requires you to generate more money by actively trading than you would have otherwise made by spending the equivalent time working on another venture. If you can't outperform the market AND your hypothetical profits from another activity, you took a loss, regardless of what your "percent return" was.
That's the hidden cost of actively trading. A great percent return that underperforms other opportunities is a loss too.

👾 Why the gaming industry isn’t “Tech” 🎮

A game developer shared the differences between the game industry and the rest of what is generally considered tech (it’s easy to lump gaming into tech because they use so much of it, but there are fundamental differences in the dynamics at play).

The thread below was an answer to the question: “Something I'm often puzzled by is how little technological export there is from games to other areas of software development.”

The important thing to recognize is that the game industry isn't a tech industry. Most people get this wrong.
The game industry is an entertainment industry; our closest sibling is the movie industry. We spend a lot of time looking at people in the tech industry and wondering just what on earth they're doing over there, and they do the same for us. [...]
Another example: Relentless performance optimization. We have a specific hardware target (often this hardware target is a specific model of Playstation, XBox, or Nintendo console) and we do not get to ask people to upgrade their hardware or buy another server.
It's fixed, it's done, that's what we have to run on, end of story, zero flexibility. At the same time we need to cram as much stuff as we can onto that target because people compare games against each other. [...]
The end result of all of this is that we spend a lot of time making stuff we can use, and they spend a lot of time making stuff they can use, and through decades of experience we've kind of agreed to ignore each other. [...]
I think the *biggest* difference, though, is who the rock stars are.
In the tech industry, the rock stars, the people everyone focuses on, are the programmers. They're the ones making the neat stuff. In the game industry, the rock stars, the people everyone focuses on, are the artists and designers. *They're* the ones making the neat stuff.
The end result is that game-industry spends lots of effort making UIs and visual editors and designing stuff to be artist-comprehensible, with drag-and-drop and tooltips and annoying opaque binary file formats, while the tech-industry slaps everything into big easily-diffable text files targeted at programmers and then demands that people learn how to write code if they want to do, like, *anything*.
And naturally this results in very different APIs and libraries, and very different usages of those APIs and libraries, like the abundant use of bespoke animations in game UIs and the absolute absence of them in webpage UIs.

It makes perfect sense.

Different selective pressures have made the two animals evolve in different directions to better fit their ecological niches, and now, while there are a lot of surface similarities, the two have diverged enough that they can be considered separate species.

h/t Friend-of-the-show and supporter (💚 🥃 🇸🇬) Cedric Chin

Thoughts on Formats (Text ✍️ → Audio 🎤 → Video 🎥 → Interactive Games 🎮)

It feels like text -> audio -> video -> games are kind of inversely correlated in how much friction there is to create vs how much friction there is to consume.

It’s easier to make text (not that it’s easy, but you need little equipment and expertise to go clickety-clack on the keyboard), but there’s a ceiling to how big it gets because there are fewer real readers out there (that’s what makes *you* special!).

Audio has a much bigger audience than text in many ways, but it’s harder to make a decent end product; you need more equipment, to develop certain skills, and there’s the editing, mastering, etc. But it’s more natural for lots of people to consume and requires less effort than text.

Then there’s video, which is probably the most natural thing for humans to consume, in that it lights up most of our senses and almost hypnotizes us into a trance of concentration… but it’s so hard to make good video!

It’s probably why film/TV are such collaborative mediums and it can cost hundreds of millions to finance a big project, which isn’t something you’d spend on making a book/blog…

And then, well, what can I say about making video games? These days to make a really good one, you need the skills of all the above plus a bunch of highly advanced and specialized technical skills (see the thread above on the video game industry). It’s no wonder that AAA titles require so many people and so much capital to make.

This has to have implications about the ultimate market size for each.

As an aside, moving between mediums is really interesting — I’ve been doing a bit more podcasting lately, and that has its own learning curve that I’m slowly trying to climb… but I can’t even imagine how tough the jump to video would be!

Science & Technology

‘Reversing hearing loss with regenerative therapy’

It’s amazing to reverse hearing loss through electronics like Cochlear implants, but it would be even more elegant to be able to do it by repairing the biological damage at the source:

The biotechnology company Frequency Therapeutics is seeking to reverse hearing loss — not with hearing aids or implants, but with a new kind of regenerative therapy. The company uses small molecules to program progenitor cells, a descendant of stem cells in the inner ear, to create the tiny hair cells that allow us to hear.
Hair cells die off when exposed to loud noises or drugs including certain chemotherapies and antibiotics. Frequency’s drug candidate is designed to be injected into the ear to regenerate these cells within the cochlea. [...]
In Frequency’s first clinical study, the company saw statistically significant improvements in speech perception in some participants after a single injection, with some responses lasting nearly two years. (Source)

It’s still early, studies are mixed, etc. But it’s an extremely interesting path to explore, and not just for hearing but for all kinds of other things too.

☢️ Rebranding nuclear power? How can we fight the double standard? ☢️

Yea yea, one more post on nuclear power. What can I say? It’s an important topic and it’s worth the ink.

The Washington Post had both an editorial on breeder reactors and a feature piece on people’s irrational fear of nuclear, and I want to share some thoughts and highlights. First on breeder reactors:

Nuclear “waste” could be a treasure: It is not trash. Less than 1 percent of the potential energy of uranium is used to produce power in a nuclear reactor. The isotope U-235 of uranium must be enriched from less than 1 percent to about 5 percent to be used in most nuclear reactors. The remainder, mostly U-238, is left as so-called waste. However, it has the potential to produce prodigious amounts of energy in what is called a breeder reactor without requiring any further uranium mining.
Unfortunately, no commercially viable breeder reactor has ever been built. A breeder reactor can provide a twofer: disposing of what is now considered a problematic waste while producing a very large amount of energy for centuries. The government and private companies have spent billions trying to improve conventional reactors and to develop fusion reactors while ignoring the potential of a breeder. [...]
Research and development into breeder-reactor technology begs for funding as fusion research — which will yield no practical results for many decades — gets billions in funding. What’s wrong with this picture?

While I’m glad to see research into fusion even if it only becomes feasible in a long time (because the sooner you start, the sooner you get there), I think other nuclear technologies like breeder reactors should also get the attention and it shouldn’t be one or the other — we spend untold sums on energy, decarbonization, on the military to secure fossil fuels, etc.

Even the crumbs of those amounts could more than fund breeder research and prototypes.

Fear is the future’s tollbooth, and it can collect its fee in surprising ways. After 9/11, more people than expected began to die in car accidents on U.S. freeways, multiple studies found. People scared of the vivid threat of a midair terrorist attack apparently opted for the statistically more dangerous behavior of long-distance driving.
Likewise, lots of people are scared of nuclear waste, which can be stored safely or reprocessed into useful things such as medical isotopes. The byproducts of coal-fired plants pose a more imminent threat.

I like this line:

Fear is the future’s tollbooth, and it can collect its fee in surprising ways.

Supporter Josh Wolfe (💚 🥃) frames it well:

Wolfe likes to invite people to imagine an alternate reality, one in which nuclear fission was discovered in, say, 2018, rather than in 1938, and it was first used to power cities, rather than to destroy them. “If atomic energy was discovered today, people would be like, ‘Oh my God, this is magic,’ ” Wolfe said. The days of depending on dictators to light up our homes would be behind us, and a future with less air pollution would lie ahead. [...]
This violent history has made us like a man who is afraid of dogs because one bit him as a boy.

The bolded part is so true.

If it had been discovered recently, there’d be dancing in the streets, people crying with joy, young generations becoming more optimistic about the future, etc. It would feel like the breakthrough we’ve all been waiting for! All we have to do is build a lot of it and we can have lots of clean, cheap power! But alas…

Wolfe suggests a rebranding:

Last July, Wolfe shared his idea on Twitter, complete with a new name: elemental power. “Elemental” would not only shed the stigma of “nuclear” and its association with bombs and radioactive fallout, but it would also emphasize the fact that the technology takes advantage of a natural process, just like solar and wind.

I’m not sure how I feel about it. These things can create a backlash, as it seems like you have something to hide… But for more citizens not paying attention, it’s very hard to break through and change their minds on anything that triggers an emotional reaction, so maybe it’s the smart way to go..? ¯\_(ツ)_/¯

They make a similar point to what I said in edition #228 about The Simpsons inadvertently changing how a whole generation subconsciously saw nuclear power:

it would be hard to dream up a tougher assignment for a public relations pro than rehabilitating power’s image. Nuclear fear is everywhere. It is in the villainous Mr. Burns’s rat-infested power plant, where Homer Simpson nods off in the control room, and toxic sludge pours into the local river. It is in monster movies such as “Godzilla,” disaster movies such as “The China Syndrome” and horror movies such as “Chernobyl Diaries.” After decades of relentless anti-nuclear messaging, the very idea of radiation — invisible, mysterious, carcinogenic — is terrifying.

On the double-standard:

even if the world eventually embraces nuclear power, the margin for error will be razor thin. When a coal mine collapses or a natural gas pipeline leaks, the public ignores it or quickly moves on. But if anything goes wrong with a nuclear reactor, no matter how minimal the damage, nuclear fear will reignite, with severe consequences for the industry.

🔑🔓 ‘Apple, Google, and Microsoft will soon implement passwordless sign-in’ 🔐

Passwords are out of control. In theory, they can be made extremely safe with the use of a password manager that allows you to have a very long and different fully random password everywhere, combined with 2-factor identification (either a hardware key or using a mobile device with biometrics).

But it’s a case of “In theory, theory and practice are the same. In practice, they’re not.”

In practice, most people are terrible with passwords.

They use weak ones, re-use them everywhere (so that if some unimportant site gets hacked, the passwords exfiltrated from there can be tried on more important accounts). So anything to improve that the average person is likely to adopt can have a big impact.

The expanded standards-based capabilities will give websites and apps the ability to offer an end-to-end passwordless option. Users will sign in through the same action that they take multiple times each day to unlock their devices, such as a simple verification of their fingerprint or face, or a device PIN. This new approach protects against phishing and sign-in will be radically more secure when compared to passwords and legacy multi-factor technologies such as one-time passcodes sent over SMS.

This is expected to appear “over the coming year”.

Can’t wait, hopefully the implementation is good.

The Arts & History

Documentary on the 16-year project to remake Half-Life

If you grew up on Half-Life, this will press those nostalgia buttons. It’s a bit intense, a 2-hour documentary on this massive project, but even if you don’t watch the whole thing, it’s fun to skip around and look at some of the challenges that came with porting the beloved game to a more modern engine.

Amulet graphic novels

My 8yo is hooked on Amulet. I wanted to read Lightfall book 2, but when Amulet book 3 to 5 arrived from the public library, he wanted to go back to that world…

…which made me a little sad, because I enjoy Lightfall so much, but I think that Amulet’s faster pace and more numerous twists and action scenes are more to his liking than Lightfall’s slightly slower pace and more linear nature.

Liberty’s Highlights

276: Market Crash, Why Gaming isn't 'Tech…