Quote of the week: 

“We over estimate technology in the short term and under estimate technology in the longterm.” Arthur C. Clarke. 

Good writing, good investing

Something I have come to believe is that good writing and good decision making are inexorably linked. It’s not that good thinkers become good writers, it’s that good writing leads to good thinking. Shane Parrish frames it like this in a recent post: “Writing is the process by which you realize that you do not understand what you are talking about… Importantly, writing is also the process by which you figure it out.” In modern culture, writing tends to be viewed as a “soft” skill. I think this is wrong. Proficient writing isn’t simply a communication tool. It’s a form of leverage to enhance the quality of one’s ideas. 

“Writing about something teaches you about what you know, what you don’t know, and how to think. Writing about something is one of the best ways to learn about it. Writing is not just a vehicle to share ideas with others but also a way to understand them better yourself. Paul Graham put it this way: ‘A good writer doesn’t just think, and then write down what he thought, as a sort of transcript. A good writer will almost always discover new things in the process of writing.'”


Finding the next 10-bagger

Every investor in the world wants to find (and hold) the next 10-bagger stock. But where to look? And how to hold during inevitable drawdowns? Personally, I believe the answers to these questions aren’t going to be found in financial textbooks or detailed Excel models. Rather, I think the requisite skills for this pursuit are accumulated through individual curiosity—and a hunger for knowledge about how the world really works. As Charlie Munger once said: “Without Warren Buffett being a continuous learning machine, our record would have been absolutely impossible.” 

Chris Begg, the CIO and co-founder of East Coast Asset Management, takes this concept a bit further in a recent conversation with William Green. In the conversation, Chris describes his multidisciplinary approach to research, and his ideas around learning itself. “I remember early on in my learning process, I was frustrated with being one dimensional in my thinking,” Chris says. “So, right away, I was like, ‘How do I build a system where I can actually have a depth of knowledge and a breadth of knowledge?’ And so I had to reformulate how I was learning.” He continues: 

“And so, I developed a method for taking blocks of time. I would take three blocks, three months, and I would go as deep as I could on a subject in those three months. And I would set a deadline and I would move on. But the subject could be something like [human] evolution. And I would approach the subject from a 360-degree view. Sometimes I’d approach it through the arts, sometimes through poetry… And then over time I was like, okay, ‘I’m developing more, I’m more two dimensional in my thinking. And I’ve developed a little bit more depth, more breadth of knowledge.'”


“The infinite value of exploring challenging ideas” 

Tom Morgan opens up his latest essay with a direct question: “How open-minded are you?” The piece then goes on to brilliantly explore—and challenge—how modern society has led human behavior to become more close-minded (much to the detriment of our collective march towards progress and fulfillment). “The more open you make yourself, the more you’ll receive in return,” Tom writes. “It’s why open-mindedness correlates so closely with wisdom and general human flourishing.” He continues:

“What seems to be happening is that we are getting more closed-minded as time goes on. Discussing these topics elicits an unusual fear of mockery or a loss of credibility. Nobody wants to sound gullible, and being too open comes with its own dangers. It’s interesting that nobody seems to raise an eyebrow if you talk about the spookier aspects of quantum physics, even though they continue to defy our current understanding of space-time. It’s only if you apply these dynamics to our own psyches, to consciousness itself, when the eyes start to roll. I’ve noticed it’s a topic that even makes some people angry. This reminds me of the fact that anger is the most lateralized of our emotions: in our brain’s defensive, competitive, rational but ultimately limited left hemisphere.”

A few more links I enjoyed:

“There are plenty of twists and turns that will occur over an investing career.  An investor can purchase a minority interest in a company with the intention of holding for a long period of time but all sorts of corporate actions can alter the timeframe.  The most obvious example involves mergers and acquisitions.  The company that we purchase can transform into a forced cash payout if it is acquired or we can receive shares of an acquiring company in exchange for our stake.  The world is unpredictable and we cannot assume that we will be permitted to hold a security for as long as we envision.  It follows that the investment thesis that underlies an investment may not be allowed to fully play out.”
“Let me tell you how I think it’s going to play out. And of course, we’re just all in the business of predicting the future, and the problem is it doesn’t always age well. I think that, like, pure work from home or pure remote is ending. I generally think the future is flexibility. Here’s the calculation every CEO has to make: are you more productive having people physically in an office together and then constraining who you hire to a 30-mile or a 60-mile commuting radius to the office?… I think we’re going to start to live in a much more nuanced world where the companies aren’t going to have all the people in the office. They’re going to decide that some roles are most effective being on a small team in the office, but a giant sea of desks probably isn’t the most effective thing, and many roles will be much more effective when allowing flexibility so you can have a global talent pool. I think there’s going to be a post-pandemic equilibrium that we haven’t seen yet that’s going to play out over the coming years.”

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.