Quote of the week: 

“Imagination is everything. It is the preview of life’s coming attractions.” – Albert Einstein

Two types of knowledge: expiring and permanent 

Morgan Housel asks a question in a recent blog post that I think about all the time: What really matters? Every day we are inundated with an exponential rise of information; consequently, the ratio of noise to signal has grown dramatically. So what’s the cure? How do we decide what to let through our filter—and what to ignore? 

To that end, Morgan comes up with a helpful mental model, what he calls “expiring” and “permanent” knowledge. “Expiring knowledge is things like quarterly earnings, election polls, market information, and politics,” Morgan writes. “It catches more attention than it should, for two reasons. One, there’s a lot of it, eager to capture our short attention spans. Two, we chase it down, anxious to squeeze out insight before it loses relevance. Permanent knowledge tends to be principles and frameworks that help you make sense of expiring information.” He continues: 

“I read newspapers and books every day. I can not recall one thing I read in a newspaper from, say, 2011. But I can tell you details about a few great books I read in 2011 and how they changed how I think. I’ll remember them forever. I’ll keep reading newspapers. But if I read more books I’d probably develop better filters and frameworks that would help me make better sense of the news. Asking how long you’ll care about the information you read pushes you to focus on permanent things and care little about temporary things – a great mindset for long-term thinking.”

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The next platform shift in media 

I don’t have a strong view on products like Apple Vision just yet, but I do wholeheartedly agree with the central thesis of Rex Woodbury’s latest essay: The future of content will look radically different than the past. Platforms like Unity and Roblox are enabling low-cost production of highly virtual experiences, while augmented reality technologies will only improve over time. “People prefer content that’s more immersive and more engaging; we’re just waiting on technology to catch up,” Rex writes. “And we may finally be getting somewhere.” He continues: 

“The size of the opportunity here has everyone scrambling. Meta is spending $10 billion a year on its Reality Labs division, and continues to double down on Oculus. Google, apparently not scarred by its Google Glass debacle, is building its own mixed reality headset. Microsoft, for its part, has invested heavily in HoloLens, determined to not repeat what happened with mobile. When a company misses a platform shift, the entire company becomes at risk… What headsets need, of course, are killer applications. Gaming applications will come first, but others will follow: education, productivity, socialization. In 10 years, I don’t see us still using a tiny black rectangle of glass as our portal to the internet. We’ve seen early mobile AR applications—Pokemon GO remains the most mainstream use ($5B in lifetime revenue), and Snap says that 250M users engage with AR filters every day. But we’ll soon move beyond our phones—headsets, then glasses, then potentially even contact lenses. The killer applications will be native to these new products.”

A few more links I enjoyed:

Dr. Gina Poe: The Science of Better Sleep – via Farnam Street
“We all feel like our brain is full and gunked up when we’re sleepy. But it’s only been in the past 10 years or so [that] we realized that there are actual slow waves… [they are] actually sweeping through and cleaning our brains from the debris that builds up across wakefulness. Proteins get misfolded as they get used, and we need to refold them. We also need to clear away the debris of metabolism. That happens through these slow waves sweeping through, almost like a bilge pump. I think of it like a bilge pump, pumping out the waste. As far as emotional learning, we all realize that if we don’t get enough sleep, we get cranky. And it’s even more true of children who are developing; if they don’t get their nap or don’t get enough sleep, they get really hard to manage. But it’s only been recently in the past 10 years or so that we’ve been able to see how that happens and mechanistically, what is actually happening to our emotions.”
The Future of Growth Companies: The Visionary-Optimizer Challenge – via Intrinsic Investing
“On the other hand, the ‘new school’ companies have established themselves as forces to be reckoned with. Still, it remains to be seen what their margins and incremental returns on invested capital profiles look like when growth slows. To this point, three sell-side analysts – Scott Davis, Carter Copeland, and Rob Wertheimer – wrote the book LESSONS FROM THE TITANS. The trio covered industrial conglomerates and drew lessons from the successes and failures of these companies that they argue can be applied to many of today’s tech companies transitioning from high-growth periods. The authors note that industrial companies were the ‘original tech; a few generations ago and once ‘had seemingly magical market positions, but most of them squandered that advantage. Arrogance led to wasteful investment decisions, poor labor relations, and countless scandals.'”

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