1/ Observation on “Personal space”.

(It is better to first make OBSERVATIONS over PREDICTIONS—to see what is over what may be)

Already widely appreciated:

technology allows us to be at once MORE connected to those far away... 2/ And also to be LESS connected to those immediately close to us...

1/There is a (self-referential) paradox I will call 'satisfying frustration' or 'frustrating satisfaction' ––

––of the class of problems that we KNOW we will never KNOW... 2/ The Golbach Conjecture (of knowing if all even #'s are the sum of 2 primes) thus far tested up to 400,000,000,000,000...

1/ At @sfiscience annual meeting on RISK in NYC.

Pantheon of practicioner geniuses gathered.

First up:
-Bill Miller @B3_MillerValue
-Cliff Asness @CliffordAsness
-Bethany McLean @bethanymac12
-Marty Liebowitz (Vice Chair, Morgan Stanley) 2/ @CliffordAsness:

Two most dangerous words in risk: "worst case"

Cliff is saying always ask with skepticism someone with certainty then was the alleged worst case before that worst case. The worst case isn't the worst case til...the worst case.

1/ Here's example where I had thesis & my partners questioned market structure

Decade-long thesis in F&F (flavors + fragrances) had us seeking biotech-like compound discovery for new or substitute flavors

But IFF, Firmemich, Givaudon have oligopoly—

—Why $ exits are too small 2/ Technologically we will no doubt have companies doing cool discovery + new processes & partnerships with Coke, Pepsi, Nestle, Cadbury, etc as market seeks less sugar, salt substitutes, “natural” flavors etc.

But what is good for consumers ain’t always great for investors...

Here are 3 brilliant things
(all connected in cool way)

1/ FIRST: This article on how evolution left us ill-equipped for modernity

The title “Only human, after all” triggered a memory...
ft.com/content/0df233… 2/ The phrase “Only human, after all”—

—for most triggers Rag’n’Bone Man (2016)


—for me triggers lyric from few-hit wonder Level42 (33 yrs ago + launch of New Wave)
‘And it's not so wrong, we're ONLY HUMAN AFTER ALL”


which...->

1/ Several measure of markets— (relied on by global investors and policy makers)
—are showing curious signs.

Take the “Fed Model”:
bond yields move in line with earnings yield (inverse P/E).

If bond yields📈 stocks📉 to provide a higher yield to compete with bonds.... 2/ YET:
US bond yields are up recently (+should drive USD higher, attracting inflows)—
while US stocks are at peaks (and USD got weaker)

Since the .com bust the Fed Model proved questionable...

1/Great DESIGN is a compression algorithm

—that takes swirling chaos of imagination, memory, thinking, planning, research, modeling, simulation, aesthetics, materials, function, addition, subtraction, combination—

and congeals it into SOMETHING out of NOTHING, envied + desired. 2/ Lux family Co @latchaccess NYC office has reminders.

From the DESIGN evolution of phones...

1/ Abundance + scarcity

When liquidity dries up, sentiment turns, mkts turn, people move
—AWAY from abundant nonsense buzzwords (that poorly measure value)
—TOWARDS scarcely used accounting & finance principle terms (that better measure value)... 2/ You MAY be old enough to remember this past transition
—from "eyeballs" and "stickiness"
—to "CASH is king" "path to PROFITABILITY"

You WILL be old enough to remember the next transition
—from ARR, MRR, GMV and other foofoo terms
—to "cash flow", "contribution margin"...

1/ A great HACK to learn how TO do something––

––is to study how NOT TO do it.

1/x or -x
"man muss immer umkehren"
Invert, Always Invert
was the advice of Charlie Munger adopted from mathematician Carl Jacobi to flip problems on their head... 2/ One of my all-time favorite speeches is Charlie Munger (1986) adding on to the inverting wisdom of a prior Johnny Carson commencement.

Carson told students he could not them how to be HAPPY–
–but he could help them ensure a life of MISERY...

1/ They are our BEST performing investments. Although there were a few that we lost everything on...

https://twitter.com/AliBHamed/status/1039346401648435200

2/ There was the Shoebrella. We underestimated market risk...

1/ Lux family co @shapeways revealed something awesome today (teaming up with Aaron Kyro @BrailleSkate + @autodesk)—

3D printed titanium trucks!
But there’s more... 2/ They beat the heck out of them—like this...

1/ Holy homage to my hometown: Coney Island, Brooklyn

Just GORGEOUS over-the-top prose, artful alliteration by EE Cummings written in 1926 Vanity Fair

(ht @C4COMPUTATION)
theparisreview.org/blog/2018/08/3… 2/ The incredible temple of pity +terror, mirth & amazement...fusion of the circus + the theatre....

...It resembles the theatre, in that it fosters every known species of ILLUSION.

...Whereas at the theatre we merely are deceived, at Coney we deceive ourselves.

1/ In ICELAND

(an observation amidst a flurry of friends also visiting in recent weeks):

This is a land turning the REAL into the ETHEREAL.

Here is a story of fish, melting glaciers, electricity, aluminum, data centers, crypto + the future of high-powered computer simulation 2/ In the US server farms drove up hydropower prices.

There were 30 aluminium smelters in the US, now only 5.

They didnt go to China...Iceland.

Iceland has world's highest electricity usage per person: ~50600 kWh per year

Most for heavy industry exploiting cheap electricity.

1/Took fam to Rammellzee exhibit @redbull arts

So dope. Thanks @huahsu for recco

Afrofuturism, retrograffiti ratpack recycling, sci-fi skatepunk streetfight iridescent time warriors.

= MFDoom x Andre Leon Talley x Afrika Bamabaataa x TimeBandits

Some pics (ends tomorrow). 2/ Galactic skate starship formation

1/ A series of clues. 2/ Carl Sagan’s Demon Haunted World. The City of Grief.

1/ A few excerpts (some content redacted) from Lux's most recent Quarterly letter to partners... 2/ A key theme was DICHOTOMIES (in markets + variety of systems)...

1/ On Truth. After you read this comic, I share a story about a small con—relatively innocuous but the kind that is pervasive in tech (and really anything new + risky where credibility is low and the need for (investor) belief is high)...

https://twitter.com/WallStCynic/status/1032223407293825025

2/ Many years ago I spoke at a family office conference with the founder of Red Hat

He shared a story of how he basically did a small con to build credibility.

He surveyed 10 of his friends, 2 were using Linux.

A year later 4 were using Linux.

So...

1/ I REALLY liked this cool paper on "collective memory"

“The Universal Decay of Human Collective Memory” by @cesifoti + colleagues 2/ They break down COLLECTIVE MEMORY as made up of 2 parts:

(1) *communicative* memory
(stories we tell + store in our neurons/brains)

(2) *cultural* memory
(physical recording of information in matter)

1/These are very good. BUT there are only 3 90s soundtracks that matter...

https://twitter.com/wgalyean/status/1029150331081375745

2/ #1 (excellent but not best of the 3)...

1/ Bulls: Go all in. Get last laugh.
He is promising you floor of 420 right?
Short thesis has always been “bad biz, burning cash, big bluffs and boasts and untruthful”
Long thesis: “we believe Elon”.
Ultimate test
Either he has pocket aces + a sponsor.
Or 2,6 + goes full tilt... 2/ My judgment is this is after failed ‘short burn of century’ a existential ‘bluff of the century’. Pump the stock, keep speculation of buyout to prop it until converts convert, avoid repayment of bonds, SEC be damned, if this is end go down swinging...

1/
I've long said: watch the bonds.
Because the bonds watch the cash.

The market says implied probability of default is over ~35%
(higher than Lehman Brothers before it went under).

Tesla has always had a bold vision + beautiful design...just a very terribly run business.

https://twitter.com/lisaabramowicz1/status/1021792547583287296

2/ Many people would be better served w/a bit less 'singularity university' + a bit more 'accounting 101'

If bankruptcy occurs?
Shock will remind many that when people w/money meet people w/experience, the ones w/experience end up w/ the money + the ones w/money get experience