Welcome to The Nightcrawler, a weekly collection of thought-provoking articles and analysis on technology, innovation, and long-term investing. The Nightcrawler is published every Friday evening by Eric Markowitz, Nightview Capital’s Director of Research.

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    ***Special note***

    Dear all,

    As you may have seen earlier this week, we announced the conversion of our Long Only Growth Equity strategy to an ETF, called The Nightview Fund (NITE), which now trades on the New York Stock Exchange.

    On a personal level, I couldn’t be more excited about this conversion. While the Strategy builds on a continuation of many years of work, I’m a huge believer in the ETF structure and its benefits for long-term investors: tax efficiency, liquidity, and transparency—just to name a few.

    If you’re a reader of The Nightcrawler and want to learn more about investing in The Nightview Fund (NITE) on behalf of yourself, your clients, or an institution, feel free to book a time to speak with me personally.

    Otherwise, all information is available on our firm website and The Nightview Fund website.

    And now on to The Nightcrawler…


    Quote of the week: “Be less curious about people and more curious about ideas.” — Marie Curie

    The neuroscience of uncertainty

    Fundamental long-term investing forces an individual to confront uncertainty: it’s about making decisions about the future with limited (and often incorrect) information about the present. In a sense, public markets and stock picking present the ultimate game of strategy. That’s why it’s both so fun—and challenging. 

    Recently, the science writer Christie Aschwanden unpacked the brain science of uncertainty in a Q&A with David Epstein. In the conversation, she explores a few of the core habits that might help individuals think about how to navigate uncertainty in their lives—and in business and investing. “One of the key traits needed here is intellectual humility, keeping in mind that you might be wrong,” she says. Christie continues: 

    • Key quote: “In a field like physics, especially, this can mean making room for ideas that might initially seem outrageous. But, of course, cultivating intellectual humility doesn’t mean you can’t ever know anything. You can feel appropriate confidence about the things you have good evidence for, while still being open to updating if new evidence arises… Instead of trying to make decisions that optimize for a particular outcome, you look for decisions that will be good or at least good enough for the maximum number of likely scenarios.”


    Long live the movie theater 

    For close to a century, there’s been a lingering concern among Hollywood executives that technology could eventually crush the box office theater model. Starting with home television sets in the 1930s, VHS in the 1970s, DVDs in the 1990s, and streaming in the 2010s, the fear was always that distribution innovation could end brick-and-mortar moviegoing. 

    And yet, despite declines, the box office is far from dead. In a recent longform essay that’s rich with data analysis and original research, the investor and writer Matthew Ball analyzes over a century of box office trends and shifts in consumer behavior. Matthew also offers some smart commentary—and projections—about what could happen to the future of the entertainment industry. 

    • Key quote: “Some executives say ticket prices must go way down. It’s more likely they should substantially increase to reflect the scarcity of moviegoing for the average moviegoer (it stands to reason that if the average American has dropped three of five trips per year that the remaining two should be more, not less valuable on average. Of course, exhibitors don’t want these increases to cannibalize moviegoer’s spend at the concession stand, none of which is shared with distributions and all of which is high margin. Perhaps a new deal needs to be worked out which better aligns incentives and the concession behavior of artists.”

    A few more links I enjoyed: 

    Why Everything is Becoming a Game – via Gurwinder (H/T Frederik Gieschen)

    • Key quote: “For years, some of the world’s sharpest minds have been quietly turning your life into a series of games. Not merely to amuse you, but because they realized that the easiest way to make you do what they want is to make it fun. To escape their control, you must understand the creeping phenomenon of gamification, and how it makes you act against your own interests. This is a story that encompasses a couple who replaced their real baby with a fake one, a statistician whose obsessions cost the US the Vietnam War, the apparent absence of extraterrestrial life, and the biggest FBI investigation of the 20th century. But it begins with a mild-mannered psychologist who studied pigeons at Harvard in the 1930s.”

    The Winner’s Edge – via Farnam Street

    • Key quote: “And I think it’s always better to be overly confident than pessimistic. I realize sometimes after games that, you know, I was actually way too confident here. I was way too optimistic. But if you’re not optimistic, if you’re not looking for your chances, you’re going to miss. You’re going to miss opportunities. And you know, I think there are — there are plenty of players in history who have been immensely talented, but they’re — they’re just too pessimistic. They see too many dangers that are not there and so on so they cannot perform at a very high level.”

    The Tax Advantages of ETFs – via Nightview Capital

    • Key quote: “Mutual funds are required by law to distribute capital gains to their shareholders at least once a year. These distributions occur when the fund manager buys or sells securities within the fund, resulting in taxable events. Even if investors choose to reinvest these distributions, they still owe taxes on them. Because ETFs utilize the in-kind creation and redemption process, the likelihood of generating taxable capital gains is diminished. As a result, investors in ETFs are typically less likely to receive unexpected tax bills due to capital gains distributions.”


    Investors should consider the investment objectives, risks, and charges and expenses of the Fund(s) before investing. The prospectus contains this and other information about the Fund and should be read carefully before investing. The prospectus may be obtained at (866) 666- 7156.

    The Fund is distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC.

    Investing involves risk, including loss of principal. There is no guarantee the fund will achieve its investment objective. As an actively-managed ETF, the fund is subject to management risk. The ability of the Adviser to successfully implement the fund’s investment strategies will significantly influence the fund’s performance. The fund is classified as “non-diversified” under the 1940 Act.