The Interesting Times: Are You Serious?

Books

Friday Night Lights: A Town, a Team, and a Dream

H. G. Bissinger

I took a long road trip through West Texas recently and thought what better way than to listen to a book set in West Texas. Friday Night Lights chronicles the 1988 football season of the Permian High School Panthers in Odessa, Texas. The book is partially just a well told story about a sports team's quest for a championship, but interwoven with a rich social and economic context of the town.

As someone who grew up playing high school football (albeit at a much less impressive level than the one featured here), I appreciated the social role that it plays in much of the U.S. More than that, it was also a fascinating sociological observation of West Texas in the 1980s and what it was like to live there. The role of race, social class, and economic conditions all play into the narrative - at once a biting yet somehow inspiring commentary of sports (in)ability to transcend. It is, in a sense, one of the most accurate portrayals of America I've ever read.

Articles and Podcasts

The Aestheticising Vice [Blog]

Paul Seabright

One of my favorite books and a frequent reference of my writing is James Scott's Seeing Like a State. The book revolves around the idea of "legibility," which refers to the efforts of a central planner (government, CEO, etc.) to simplify and standardize complex social realities to make them more easily governable and controllable. It argues that this was the cause of many of the 20th century’s failures on both the left (e.g. the failure of USSR and China to run effective planned economies) and right (e.g. standardization of agricultural practices for increased profit led to more rampant disease spreading in certain contexts).

This piece is a well written counterpoint, arguing that making things legible actually works remarkably well in a lot of situations. Scott tells a story (which I recount often) of how planned forestry in early modern Germany led to widespread disease and a collapse of many German forests.

However, consider the extent to which scientific agriculture has actually been wildly successful:

"That scientific agriculture has faced unforeseen problems is undeniable, as is the fact that some of these problems (the environmental ones, for instance) are serious. But the achievements of scientific agriculture to be set against them are remarkable.

The proportion of the world’s population in grinding poverty is almost certainly lower than it has ever been, though in absolute numbers it is still unacceptably high. Where there have been important areas of systematic failure, such as in sub-Saharan Africa, these owe more to social and institutional disasters that have hurt all farmers alike than to the science of agriculture itself.

To equate the problems of scientific agriculture with those of Soviet collectivisation is like saying Stalin and Delia Smith have both had problems with egg dishes."

Or in medicine:

"The chapter contains a number of examples of ‘prescientific’ medicinal discoveries (like variolation), whose rhetorical purpose appears to be to convince the reader that modern scientific medicine is not so very superior to the traditional stuff. Well, okay, the examples are fine as far as they go, but prescientific medicine also prescribed bleeding with leeches, and traditional folk wisdom in many poor countries to this day has it that dirty and rusting sickles can be used to cut umbilical cords after rural births."

I love this critique and while I do tend to lean more towards thinking society and business more often err on the side of too much legibility rather than too little, it’s certainly naive to think all legibility is bad and, indeed, much good has come from it. Every business should probably have a KPI dashboard, yet also strongly resist the tendency to believe the business is merely the KPI dashboard.

Are you serious? [Blog]

Visakan Veerasamy

Excellent throughout. A few favorite excerpts:

"Cynicism is a completely reasonable defense against fraud and bullshit. The trouble with cynicism as a defense mechanism is that you can get so good at it that you inadvertently also defend yourself against anything good happening for you"

"One of the stupidest things I’ve repeatedly seen smart people do – I call this Advanced Stupid – is that they get so fixated on trying to optimize something complicated, that they forget to optimize for survival, and then they get knocked out of the game. Like having a startup trying to do something complicatedly clever, and then running out of money. The thing here is to study the failure conditions – how and why have past players failed to do what you’re trying to do? – and be conscientious about avoiding that."

Preach.

Not Getting Picked Off [Blog]

Moontower

One thing that empirically shows up in financial literature is that higher volatility assets tends to have lower long-term returns than similar instruments with lower volatility. 30-year treasures tend to offer low long-returns and even worse risk-adjust returns when compared to leveraging up inherently stable assets like lower volatility stocks or shorter-duration treasuries.

This is weird and no one actually knows why this. One explanation is that investors often have a lottery-seeking bias (overpaying hoping for a ‘jackpot’) or leverage constraints (some investors just don’t like to use leverage and others have institutional incentives or constraints that prohibit it.)

I think both of these have merit - I have been consistently surprised by the black and white nature with which people view leverage. Indeed, for many it seems to have a moral quality (leverage is evil!). Leveraging up a single high volatility asset (Tesla, bitcoin, etc.) is categorically different from leveraging up a highly diversified basket of stocks, bonds and commodities! /Rant

Here's another explanation that I hadn't thought about before though:

"A large dispersion of opinion leads to overpaying. He points to private markets where you cannot short a company. The most optimistic opinion of a company’s prospects will set the price."

If 10 people are bidding to buy a company, the company isn’t sold for the average price, it’s sold for the highest bid.

...

If you want to fetch a high price for an asset, you want its value to be highly uncertain. Then sell it in an un-shortable auction with many bidders"

This actually describes quite a few types of private transactions!

Here are a few more things you might find interesting:

Interesting Essays: Read my best, free essays on topics like bitcoin, investing, decision making and marketing.

Consulting & Advising: Are you looking for help with making decisions around scaling your company from $500k to $5 million? I’ve been working with authors, entrepreneurs, and startups for half a decade to help them get more out of their businesses.

Internet Business Toolkit: An exhaustive list of all the online tools I use to be more productive.