Quote of the week:

“If your pictures aren’t good enough, you aren’t close enough.” (Source)

Evolutionary game theory (and the search for truth in an illusory reality)

The fundamental nature of investing is to (a) seek out truth, (b) apply that truth to unravel the mysteries of the world around us, and (c) use that analysis to make good valuation frameworks and decisions. In other words, if I can more accurately understand the nature of reality today, I can make more accurate bets about the likely path of the future.

Donald Hoffman, a cognitive scientist who has spent three decades studying human perception and evolutionary game theory, makes a striking argument that turns this theory upside down: Not only is reality itself a “magnificent illusion,” he argues, but the human brain actually maximizes evolutionary fitness for survival by “driving truth to extinction.” In the Hoffman paradigm, radical claims about the nature of reality force us to rethink not just what we know, but how we know what we know, a sort of meta view on epistemology itself. 

Arne Alsin, our CIO, turned me on to Hoffman after listening to Hoffman’s recent 3-hour conversation with Lex Fridman, which was very good. From there, I dug into Hoffman’s excellent Q&A with Quanta magazine, which I also recommend. One of Hoffman’s central arguments is that evolution itself has shaped our brains with perceptions that allow us to survive, “hiding from us the stuff we don’t need to know.” 

A century ago, Mark Twain famously observed, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Twain wasn’t known for his metaphysical approach to reality, but I think Hoffman would agree. (H/T Arne Alsin)

“The neuroscientists are saying, ‘We don’t need to invoke those kind of quantum processes, we don’t need quantum wave functions collapsing inside neurons, we can just use classical physics to describe processes in the brain.’ I’m emphasizing the larger lesson of quantum mechanics: Neurons, brains, space … these are just symbols we use, they’re not real. It’s not that there’s a classical brain that does some quantum magic. It’s that there’s no brain! Quantum mechanics says that classical objects — including brains — don’t exist. So this is a far more radical claim about the nature of reality and does not involve the brain pulling off some tricky quantum computation. So even Penrose hasn’t taken it far enough. But most of us, you know, we’re born realists. We’re born physicalists. This is a really, really hard one to let go of.”


An “unreasonable” approach to customer service “magic”

I’m a firm believer that organizations that prioritize the customer experience build intangible value that compounds over time, often leading to remarkable results. (As Jeff Bezos has said: “We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”)

In that spirit, I enjoyed reading this longform Q&A with Will Guidara, a co-owner of New York’s Eleven Madison Park restaurant. Will helped transform the once-average eatery into arguably the best restaurant in the world. His number one insight: Be unreasonably kind to your customers.

“Anyone who’s done anything that has changed the game, anything that’s been reasonably innovative, has been unreasonable and relentless in the way that they pursued the product they made,” Will says. Will’s insights are shaped by his experience in the restaurant industry, but the practical wisdom he offers transcends the dining experience and could be applied to any business or organization.

“Unreasonable hospitality is taking that same spirit and applying it to the way it makes the person who’s being served feel and honestly every other stakeholder that it touches along the way. A lot of people have never actually taken the time to think about that facet of their business and the extraordinary impact that can have, not just in growing the business in a positive direction but the way in which it enhances the experience of whatever you do.”

A few more links I enjoyed: 

“We evolve by continuously updating our models to incorporate new information. The more efficiently we can do that, the more effectively we can interact with the world. This process can take the form of little ‘a-ha!’ moments of insight. But it can also happen in a much more dramatic way. If your whole life and worldview are at odds with reality, that can set you up for serious suffering.”
“Europe is following the classic pattern of peak, plateau, and decline for fossil fuels. Decline started 15 years ago, and by the end of 2021, fossil fuel demand had already fallen by 22 percent. Leading countries and sectors in Europe are already approaching 100 percent clean energy. Fossil fuels are in retreat in every single area of demand and supply. In 2021, 80 percent of total capital flows and 88 percent of electricity capital flows were already into clean energy.”
“We certainly can tell when the air is too hot or too cold for our liking. But we’re much less likely to notice the air we’re breathing has high levels of carbon dioxide — indicating we’re breathing a lot of other people’s expelled air — or contains dangerous VOCs. When we get headaches after a day in a stuffy conference room or a nagging cough that starts a few minutes after we walk into the building, how often do we wonder if the problem is in the air?” (H/T Cam Tierney)

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