Quote of the week:

“Patience is not sitting and waiting; it is foreseeing. It is looking at the thorn and seeing the rose, looking at the night and seeing the day.” – Rumi

What will AI disrupt? 

This week, I had a thoughtful conversation—with a bot. ChatGPT launched November 30th, and like many others, I was quickly blown away—it’s smart, perceptive, and intelligent. Some suggest it could even take on Google directly. Without being hyperbolic, I can safely say the implications of this type of AI shouldn’t be underestimated…

Rex Woodbury, a partner at Index Ventures, wrote a smart essay this week that offers some context for this type of AI, and how it could meaningfully change our labor force across industries—from education, customer service, content production, and much more. In the piece, Rex looks back at previous automation technologies as a way of understanding how AI could reshape industries over the next 50 years. “The transition from analog to digital transformed labor markets,” Rex writes. “We’ll see a similar shift with new technologies reinventing how people work.” He continues: 

“The Institute for the Future predicts that 85% of the jobs that today’s students will have in 2030 don’t yet exist. That seems far-fetched, until you consider jobs that have emerged in the past decade or so: drone operator, social media manager, app developer, cloud computing engineer. The analog technologies above were groundbreaking at the time, but were rendered moot by the onset of the digital age. We’re now progressively moving through digital eras: mobile, cloud, AI. The same frameworks from the innovations of the 20th century can be applied to the innovations of the 21st. The arc of technology bends to more production, better organization, improved access. The arc has bent that way for hundreds of years, and it will continue to bend that way—likely even more rapidly and more dramatically as the pace of change accelerates.”


Creativity, investing, and what Tarantino can teach us about subtext

Alix Pasquet III, managing partner and portfolio manager of Prime Macaya, spoke with Frederik Gieschen this week for another excellent, wide-ranging conversation. (Here is a link to their first conversation.) 

The pair cover plenty of territory—personality types in investing, the idea of power pairs, adapting to regime change, learning and un-learning, and much more. Most intriguing to me was Alix’s commitment to the study of the creative process itself. In the conversation, Alix explores how writers and directors like Quentin Tarantino offer inspiration for stock pickers, who navigate the deeply complex investment landscape to draw subtextual insights— and make decisions.  “I believe that there’s a very strong correlation between good writing and good investing, and great writing and great investing,” he says. “And the writing process very much resembles the investment process.” He continues:

“One recent writing concept for me is subtext. I was watching an interview with [Quentin] Tarantino, and he was talking about doing the subtext of a scene. He says, ‘Okay, you’ve taken a piece of writing, and you’re about to film the scene. But the way that you truly get to the value of the emotion of the scene, is by asking, hey, this character, what does he want out of this interaction? And the character he’s speaking with, what does he want out of this interaction? And then you as a director, what do you want out of this interaction? And then looking from the point of view of the audience and saying what is the audience going to get out of this interaction?’ By doing that, you’re more able to get to the insights of what this film or the scene is really going to be about. So not only do the contextual work, but also the sub-textual work. Well, in the investment business, that’s a very powerful thing to do. How does the customer see this company? How does the supplier see this company? How does the competitor see this company? How does the investment business see this company? And in those mixes of perspectives, that’s how insights drop.”

A few more links I enjoyed:

“And if you, like a real estate owner, want to own these assets for a long period of time and generate an annual return of between 5% and 10% on them, compounded over ten to twenty years, then today’s prices look pretty reasonable to me. A 6.4% annual return compounded over ten years is about a double on your investment. A 6.4% investment compounded over twenty years is about 3.5x your money. So if you are saving for a retirement or college expenses or something else, you have a long-term opportunity and so thinking long-term can be very helpful.”
“Over the last three years, this general disconnect between model and reality has spread into a wider array of markets. Liron Shapira has coined the term ‘hollow abstraction’ to spearhead a scathing critique of the imploding Web3 bubble. A hollow abstraction is an idea that sounds clever, but doesn’t have any business model or real-world use case. Web3 originally promised decentralization of wealth and power. But (so far at least) it’s been most effective at enabling a generational epidemic of fraud and ponzis. As the digital world has expanded to encompass an increasingly greater proportion of our lives, it’s become harder to spot dangerous abstractions.”

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