Quote of the week: 

“I don’t have talent, so I just get up earlier.” – Henry Rollins


“The map is not the territory”

General semantics is a linguistic concept developed by the late scholar Alfred Korzybski. The idea, very briefly, is that words themselves have no objective meaning; they are disconnected from the reality they represent. Abstracting out a complex idea is human nature, but as Chris Mayer points out in a recent podcast episode, this type of thinking can lead to poor decision-making. Especially when it fails to consider the individual characteristics of any particular situation. 

A good example, as Mayer highlights, is the familiar distinction between “growth” and “value” stocks. In reality, there is no such thing as either; a more truthful reality is that there are simply businesses that exist at certain valuations at any given moment in time. These idiomatic shorthands are understandable—it’s a way to abstract complexity. The problem, of course, is becoming too reliant on these types of shorthand abstractions, and using these abstractions to make important decisions. As Mayer, the founder of Woodlock House Family Capital, says: “You could do without that terminology entirely. I don’t think you’d lose anything. At all.” He continues:

“And there’s a lot of macro terms as well that we just throw around like, we’ll say, ‘The economy is doing well’ or ‘The economy is doing poorly.’ Or we’ll throw around things like GDP like it has a precise meaning. And so what general semantics, I think when you get familiar with it, what it forces you to do, anytime you see any of those kinds of big abstractions, it makes you stop, gives a little flag and say, ‘What do you really mean when you say that? What are we talking about? Does it matter?'”


The long game is boring

I recently came across this Shane Parrish essay that I enjoyed. It’s titled “The Surprising Power of The Long Game.” The piece is short but it packs lots of insight. “Immediate and visible benefits seduce you into the short game,” Parrish writes. “You win today but lose tomorrow.” He continues: 

“The short game is taking advantage of your counterparties. The short game is spending more than you earn. The short game is not sleeping as much as you need to. The short game is not investing in your relationships when you don’t need them… Every action is a step toward the short game or the long game. You can’t opt out, and you can’t play a long-term game in everything. You need to pick what matters to you. But in everything you do, time amplifies the difference between strategies that work in the short term and ones that work in the long term.”

A few more links I enjoyed:

“There’s no question that A.I. can think faster than any comedian can and study the mechanics of a joke with more agility than ever before. And even if irony and tone can still be challenging, its sense of humor will only improve. It’s worth recalling that in the 1990s, supercomputers lost to chess grandmasters before they started winning. But comedy is not chess. And whether A.I. can intentionally generate truly funny art is as much a philosophical as a technological question.”
“We liken our investments to such an orchard. When we build high-conviction positions in a company, we do so with the mindset that we’re building a portfolio to pass on to our kids and grandkids. Before buying a stock we believe is a long-term compounder, we literally ask ourselves, ‘Will our grandkids think we were smart or dumb for buying this?’ Our goal is that our kids and their kids will have greater opportunities to spend time on nobler tasks than the accumulation of money—we want them to be truly wealthy. The best time to start investing in that future is today.”

This information should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the investments or strategies referenced were or will be profitable, or that investment recommendations or decisions we make in the future will be profitable. This article contains links to 3rd party websites and is used for informational purposes only. This does not constitute as an endorsement of any kind. While Nightview uses sources it considers to be reliable, no guarantee is made regarding the accuracy of information or data provided by third-party sources. Nightview Capital Management, LLC (Nightview Capital) is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Nightview Capital including our investment strategies and objectives can be found in our ADV Part 2, which is available upon request.