Quote of the week: 

“It’s not what you look at that matters, it’s what you see.” – Henry David Thoreau 

Longtermism as a lifestyle

Any serious discussion about longtermism—whether in an investing context or otherwise—should probably open with an important disclosure: Humans are not hard-wired to be long-term thinkers. Our biological makeup predisposes us to short-term thinking. To make matters worse, modern technology—for all of its wonderful use cases—is rarely designed to to encourage long-term behavior. So what’s the cure? How do we become better long-term thinkers in a world that feels increasingly focused on dopamine-fueled short-term experiences? Richard Fisher, a journalist and the author of The Long View, wrote a compelling essay this week on the subject, and explores how we might actually try to re-wire our thinking to focus on what one might call the “Big Picture.”

The essay is compelling because Richard offers some practical and specific advice on how to actually ingratiate a longterm mindset into one’s lifestyle. “There’s also a growing body of psychological research showing techniques for achieving a longer view,” Richard writes. “One of the most promising is perspective-taking, where people are asked to step into the shoes of past or future generations to imagine their point of view. Researchers have found this is more effective than showing people data or abstract information, encouraging cross-generational empathy that can reduce psychological distance on issues such as future climate change.” He continues: 

“What I have learned is that the long view is about much more than escaping the traps of the present. Sometimes, it is a perspective that allows one to transcend the stresses of the moment. Other times, it offers guidance in periods of uncertainty. Often, it provides principles for understanding the world. But most of all, it is a way of seeing what matters most within the here and now. The long view, I believe, can make the present more meaningful. So, while it may well be true that we live in a period of crises, if we are to navigate our way through 2023 and beyond, it begins by changing the way we see time.”


Daring to be a great stock analyst

“In my experience, great investors think in terms of game selection,” says Alix Pasquet in a recent presentation titled “How to Be a Great Analyst.” Alix is a friend of mine and the Managing Partner at the hedge fund Prime Macaya. His talk offers insight into a range of subjects that I find fascinating—how to conduct deep field research, the importance of creativity, game theory, and much more. In particular, I found his section on game selection to be resonant on the topic of stock selection, and how to exploit other people’s mistakes in the market to use to your own advantage. 

“Every investor I know plays a zero-sum game. And they think in terms of game selection. And this was a principle from my gambling days. I used to be a professional gambler. I wasn’t a very good one, but I picked my spots really well… And this principle is: Game selection is more important than playing skill. And you find it all over capital markets. Young people are very rarely told about it. The game you select to play is more important than how well you play it. If you’re the world’s second worst poker player, and your game is to play the world’s worst poker player, you will make money.”

A few more links I enjoyed:

“When Glass informed Davis that he wouldn’t double down on Walmart’s e-commerce efforts, the CEO predicted that Walmart’s online store would never register more sales than the largest single Sam’s Club brick-and-mortar location, Davis recalled. That may sound absurd now, but sales data at the time backed it up. In 1997, Amazon posted revenue of just $148 million, while Walmart celebrated its first $100 billion sales year. Davis gave his notice and took the job at Amazon. He was essentially the only software engineer responsible for Walmart’s first online retail website, and when he left in 1998, he took the virtual keys with him.”
“Here’s a universal reality: What you believe to be true is influenced by how much you want it to be true. The more something helps you deal with uncertainty, the lower the bar is for you to believe it’s true. It’s been like that forever. Describing the Great Plague of London, Daniel Defoe wrote in 1722: ‘The people were more addicted to prophecies and astrological conjurations, dreams, and old wives’ tales than ever they were before or since.’ You’ll believe just about anything that offers hope when a plague is killing a quarter of your neighbors.”

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