“The goal of the non-professional should not be to pick winners.”

Warren Buffett, writing in his 2013 letter to Berkshire Hathaway shareholders:

Most investors, of course, have not made the study of business prospects a priority in their lives. If wise, they will conclude that they do not know enough about specific businesses to predict their future earning power.

I have good news for these non-professionals: The typical investor doesn’t need this skill. In aggregate, American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts). In the 20th Century, the Dow Jones Industrial index advanced from 66 to 11,497, paying a rising stream of dividends to boot. The 21st Century will witness further gains, almost certain to be substantial. The goal of the non-professional should not be to pick winners – neither he nor his “helpers” can do that – but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.

That’s the “what” of investing for the non-professional. The “when” is also important. The main danger is that the timid or beginning investor will enter the market at a time of extreme exuberance and then become disillusioned when paper losses occur. (Remember the late Barton Biggs’ observation: “A bull market is like sex. It feels best just before it ends.”) The antidote to that kind of mistiming is for an investor to accumulate shares over a long period and never to sell when the news is bad and stocks are well off their highs. Following those rules, the “know-nothing” investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results. Indeed, the unsophisticated investor who is realistic about his shortcomings is likely to obtain better long-term results than the knowledgeable professional who is blind to even a single weakness.

June 16, 2021
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“SARS-2 was not designed as a biological weapon. But it was, I think, designed.”

Nicholson Baker, writing for the New York Magazine:

What happened was fairly simple, I’ve come to believe. It was an accident. A virus spent some time in a laboratory, and eventually it got out. SARS-CoV-2, the virus that causes COVID-19, began its existence inside a bat, then it learned how to infect people in a claustrophobic mine shaft, and then it was made more infectious in one or more laboratories, perhaps as part of a scientist’s well-intentioned but risky effort to create a broad-spectrum vaccine. SARS-2 was not designed as a biological weapon. But it was, I think, designed. Many thoughtful people dismiss this notion, and they may be right. They sincerely believe that the coronavirus arose naturally, “zoonotically,” from animals, without having been previously studied, or hybridized, or sluiced through cell cultures, or otherwise worked on by trained professionals. They hold that a bat, carrying a coronavirus, infected some other creature, perhaps a pangolin, and that the pangolin may have already been sick with a different coronavirus disease, and out of the conjunction and commingling of those two diseases within the pangolin, a new disease, highly infectious to humans, evolved. Or they hypothesize that two coronaviruses recombined in a bat, and this new virus spread to other bats, and then the bats infected a person directly – in a rural setting, perhaps — and that this person caused a simmering undetected outbreak of respiratory disease, which over a period of months or years evolved to become virulent and highly transmissible but was not noticed until it appeared in Wuhan.

A lab accident – a dropped flask, a needle prick, a mouse bite, an illegibly labeled bottle – is apolitical. Proposing that something unfortunate happened during a scientific experiment in Wuhan – where COVID-19 was first diagnosed and where there are three high-security virology labs, one of which held in its freezers the most comprehensive inventory of sampled bat viruses in the world – isn’t a conspiracy theory. It’s just a theory. It merits attention, I believe, alongside other reasoned attempts to explain the source of our current catastrophe.

April 22, 2021

“When we give up on truth, we concede power to those with the wealth and charisma to create spectacle in its place.”

Timothy Snyder, writing for The New York Times:

Post-truth is pre-fascism, and Trump has been our post-truth president. When we give up on truth, we concede power to those with the wealth and charisma to create spectacle in its place. Without agreement about some basic facts, citizens cannot form the civil society that would allow them to defend themselves. If we lose the institutions that produce facts that are pertinent to us, then we tend to wallow in attractive abstractions and fictions. Truth defends itself particularly poorly when there is not very much of it around, and the era of Trump – like the era of Vladimir Putin in Russia – is one of the decline of local news. Social media is no substitute: It supercharges the mental habits by which we seek emotional stimulation and comfort, which means losing the distinction between what feels true and what actually is true.

January 9, 2021
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“The attempt to harness Trumpism—without Trump, but with calculated, refined, and smarter political talent—is coming.”

Zeynep Tufekci, writing for The Atlantic:

Make no mistake: The attempt to harness Trumpism—without Trump, but with calculated, refined, and smarter political talent—is coming. And it won’t be easy to make the next Trumpist a one-term president. He will not be so clumsy or vulnerable. He will get into office less by luck than by skill. Perhaps it will be Senator Josh Hawley, who is writing a book against Big Tech because he knows that will be the next chapter in the culture wars, with social-media companies joining “fake news” as the enemy. Perhaps it will be Senator Tom Cotton, running as a law-and-order leader with a populist bent. Maybe it will be another media figure: Tucker Carlson or Joe Rogan, both men with talent and followings. Perhaps it will be another Sarah Palin—she was a prototype—with the charisma and appeal but without the baggage and the need for a presidential candidate to pluck her out of the blue. Perhaps someone like the QAnon-supporting Representative-elect Lauren Boebert of Colorado, who first beat the traditional Republican representative in the primary and then ran her race with guns blazing, mask off, and won against the Democratic candidate, a retired professor who avoided campaigning in person. Indeed, a self-made charismatic person coming out of nowhere probably has a better chance than many establishment figures in the party.

At the moment, the Democratic Party risks celebrating Trump’s loss and moving on—an acute danger, especially because many of its constituencies, the ones that drove Trump’s loss, are understandably tired. A political nap for a few years probably looks appealing to many who opposed Trump, but the real message of this election is not that Trump lost and Democrats triumphed. It’s that a weak and untalented politician lost, while the rest of his party has completely entrenched its power over every other branch of government: the perfect setup for a talented right-wing populist to sweep into office in 2024. And make no mistake: They’re all thinking about it.

November 10, 2020
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“Politics is that dimension of social life in which things really do become true if enough people believe them.”

David Graeber:

It is the peculiar feature of political life that within it, behavior that could only otherwise be considered insane is perfectly effective. If you managed to convince everyone on earth that you can breathe under water, it won’t make any difference: if you try it, you will still drown. On the other hand, if you could convince everyone in the entire world that you were King of France, then you would actually be the King of France. (In fact, it would probably work just to convince a substantial portion of the French civil service and military.)

This is the essence of politics. Politics is that dimension of social life in which things really do become true if enough people believe them. The problem is that in order to play the game effectively, one can never acknowledge its essence. No king would openly admit he is king just because people think he is. Political power has to be constantly recreated by persuading others to recognize one’s power; to do so, one pretty much invariably has to convince them that one’s power has some basis other than their recognition. That basis may be almost anything—divine grace, character, genealogy, national destiny. But “make me your leader because if you do, I will be your leader” is not in itself a particularly compelling argument.

In this sense politics is very similar to magic, which in most times and places—as I discovered in Madagascar—is simultaneously recognized as something that works because people believe that it works; but also, that only works because people do not believe it works only because people believe it works. For this why magic, whether in ancient Thessaly or the contemporary Trobriand Islands, always seems to dwell in an uncertain territory somewhere between poetic expression and outright fraud. And of course the same can usually be said of politics.

Full PDF here.

November 6, 2020
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“Sex robots are going to emulate an increase in the ratio of women to men.”

Diana Fleischman:

The men who would have been most likely to have access to multiple women throughout history were men high in status, like kings and men high in dominance, like warlords. Video games and social media already undermine the native psychological mechanisms that make us work towards status — they supply more immediate rewards and take far less effort than anything we work towards out in the real world. Sex robots are only going to make that worse, especially for young men. The game Love Plus, in which the ultimate reward is simply getting to know a virtual girl and attaining her virtual signals of approval has already replaced pursuing dating real women for thousands of men. Imagine if winning a video game was punctuated not with just saving the princess but having sex with her. Imagine if men could have the diversity of sexual experience of Genghis Khan, Muhammad, or John F. Kennedy without actually achieving anything. Sex robots are about to make the virtual world even more alluring.

What does this mean for women? When the sex ratio changes, so too do sexual norms; sex robots are going to emulate an increase in the ratio of women to men. Contrary to a prediction based on the idea that men would wield greater patriarchal control if they were in higher numbers, a larger percentage of women relative to men on University campuses is associated with women who are more likely to have casual sex and less likely to be virgins. When there are more men than women, women are much less likely to have casual sex. The majority sex (in this case men) competes for the minority sex (in this case women) and the minority sex calls the shots. When there is a female majority in the population, women compete for access to mates with casual sex. Whereas a male majority competing for access to scarce women compete with long-term commitment.

Sex robots will emulate a majority women ratio, shifting women to compete for men’s attention by requiring less courtship and commitment in exchange for sex. The long-term ramifications are unclear, especially the way long-term technologies and cultural norms will interact. Perhaps women will discover they have to make the costs of courtship both low and transparent to compete with sex robots. Or, perhaps, new technology could enable women to recombine their genes with one another, making men enamored with sex robots (or men generally) totally redundant.

November 5, 2020
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“Having fun is a fine ambition, but it’s not the same thing as eating good food.”

Tyler Cowen, writing for The Atlantic:

When I’m out looking for food, and I come across a restaurant where the patrons are laughing and smiling and appear very sociable, I become wary. Don’t get me wrong. Having fun is a fine ambition, but it’s not the same thing as eating good food. Many restaurants, especially in downtown urban areas, fill seats—and charge high prices—by creating social scenes for drinking, dating, and carousing. They’re not using the food to draw in their customers. The food in most of these places is “not bad,” because the restaurant needs to maintain a trendy image. The menu will feature some kind of overpriced fusion cuisine, sponsored by a famous or semi-famous chef who is usually absent. There are worse places to eat, but if I’m spending my own money, I’ll usually give these a pass.

I also start to worry if many women in a restaurant are beautiful in a trendy or stylish way. The point is not that beautiful women have bad taste in food. Instead, the problem is that they will attract a lot of men to the restaurant, whether or not the place serves excellent food. And that allows the restaurant to cut back on the quality of the food.

Good advice, especially if you live or are visiting NYC. Also Cowen’s tip on choosing restaurants in Manhattan on the streets over those on the avenues is very accurate and also makes a lot of sense:

Manhattan’s avenues tend to have higher rents than its streets. Given the long, thin shape of the island, the north-south avenues carry more vehicular and foot traffic. That neat Korean place can make ends meet on 35th, but it would not survive on Fifth Avenue. No matter where you are, turning just a bit off the main drag can yield a better meal for your money.

November 3, 2020
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“Any fool can make a fortune. It takes a man of brains to hold on to it after it is made.”

Arthur T. Vanderbilt II, writing in Fortune’s Children: The Fall of the House of Vanderbilt:

Within thirty years after the death of Commodore Vanderbilt in 1877, no member of his family was among the richest people in the United States, having been supplanted by such new titans as Rockefeller, Carnegie, Frick, and Ford. Forty-eight years after his death, one of his direct descendants died penniless. Within seventy years of his death, the last of the great Vanderbilt mansions on Fifth Avenue had made way for modern office buildings. When 120 of the Commodore’s descendants gathered at Vanderbilt University in 1973 for the first family reunion, there was not a millionaire among them.

“Any fool can make a fortune,” the Commodore had told his son William, whom he still called Billy, shortly before he died. “It takes a man of brains to hold on to it after it is made.”

October 31, 2020
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“Taking temporarily high rates of annual exponential growth as indicators of future long-term developments is a fundamental mistake.”

Vaclav Smil, writing in Growth: From Microorganisms to Megacities:

Taking temporarily high rates of annual exponential growth as indicators of future long-term developments is a fundamental mistake — but also an enduring habit that is especially favored by uncritical promoters of new devices, designs, or practices: they take early-stage growth rates, often impressively exponential, and use them to forecast an imminent dominance of emerging phenomena.

Many recent examples can illustrate this error, and I have chosen the capacity growth of Vestas wind turbines, machines leading the shift toward the de-carbonization of global electricity generation. This Danish maker began its sales with a 55 kW machine in 1981; by 1989 it had a turbine capable of 225 kW; a 600 kW machine was introduced in 1995; and a 2 MW unit followed in 1999. The best-fit curve for this rapid growth trajectory of the last two decades of the 20th century (five-parameter logistic fit with R2 of 0.978) would have predicted designs with capacity of nearly 10 MW in 2005 and in excess of 100 MW by 2015. But in 2018 the largest Vestas unit available for onshore installations was 4.2 MW and the largest unit suitable for offshore wind farms was 8 MW that could be upgraded to 9 MW (Vestas 2017a), and it is most unlikely that a 100 MW machine will be ever built.

This example of a sobering contrast between early rapid advances of a technical innovation followed by inevitable formation of sigmoid curves should be recalled whenever you see news reports about all cars becoming electric by 2025 or new batteries having impressively higher energy densities by 2030.

But the final, inescapable power of this reality may seem inapplicable in those cases where exponential growth has been underway for an extended period of time and when it keeps setting new record levels. More than a few normally rational people have been able to convince themselves — by repeating the mantra “this time it is different” — that performances will keep on multiplying for a long time to come.

October 28, 2020
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“Uncertainty must be endured if we wish to live without the support of comforting fairy tales.”

Bertrand Russell, writing in History of Western Philosophy:

Science tells us what we can know, but what we can know is little, and if we forget how much we cannot know we become insensitive to many things of very great importance. Theology, on the other hand, induces a dogmatic belief that we have knowledge where in fact we have ignorance, and by doing so generates a kind of impertinent insolence towards the universe. Uncertainty, in the presence of vivid hopes and fears, is painful, but must be endured if we wish to live without the support of comforting fairy tales. It is not good either to forget the questions that philosophy asks, or to persuade ourselves that we have found indubitable answers to them.

October 18, 2020
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