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

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In this evening’s email… 

Quote of the week: “Most of us don’t invent ideas. We take the best ideas from someone else.” — Sam Walton

The psychology of negativity and groupthink 

Markets are, in large part, driven by social psychology—which is what made this conversation with Jay Van Bavel so insightful. Van Bavel, an NYU professor, explains his research into the nature of groups, and why online environments (especially news and social media) tend to focus on negativity.

“Our brains, which are very evolutionarily ancient, have been dropped in this modern technological environment with social media and artificial intelligence,” Van Bavel says. “And now, I’m fascinated by studying how that all plays out: how is that manipulated, how do we get triggered in various ways, and so forth.”

  • Key quote: “One of the things that psychologists are very familiar with is the idea that bad is stronger than good, that people pay more attention to—or are more motivated by—bad things than we are good things. And I’ll go back to a bit of an evolutionary explanation for this again: You can imagine your ancestors walking around the African savanna, and they’re looking for food to eat. And so there’s a motivation to try to find food. But if they potentially see something and it could kill them, that’s dramatically more significant to their survival. And so they have to err on the side of avoiding things that are negative and risky. And our ancestors who did that over generation after generation after generation were more likely to survive. And so we have brains that are wired to detect threats and super-tuned to them more than they are to detect rewards.”


Focus as a scarce commodity in a hyper-distracted world

Mark Zuckerberg, in a recent long-form interview, discussed his views on Llama 3, open sourcing towards AGI, custom silicon, synthetic data, and more. But perhaps the most interesting part of the conversation was his view on the necessity of organizational focus.

Asked whether could have made Google+ a successful social network, Zuckerberg’s answer was insightful: focus, not capital, is often the limiting factor of success—and that’s what Google+ lacked.  “The problem is there was no CEO of Google+,” Zuckerberg said. “It was just a division within a company. You asked before about what are the scarcest commodities. But you asked about it in terms of dollars. I actually think for most companies, of this scale at least, it’s focus.”

This idea—that focus is often undervalued at an organizational level—mirrors Cal Newport’s “deep work” hypothesis that I’ve referenced previously: “The ability to perform deep work is becoming increasingly rare at exactly the same time it is becoming increasingly valuable in our economy. As a consequence, the few who cultivate this skill, and then make it the core of their working life, will thrive.'” 

  • Key quote: “There are always the cases where something random awesome happens in the organization and I don’t even know about it. Those are great. But I think in general, the organization’s capacity is largely limited by what the CEO and the management team are able to oversee and manage. That’s been a big focus for us. As Ben Horowitz says ‘keep the main thing, the main thing’ and try to stay focused on your key priorities.”

A few more links I enjoyed: 

Tesla Co-Founder JB Straubel Built an EV Battery Colossus to Rival China – via Bloomberg

  • Key quote: “It’s a turning point for a US battery supply chain that’s currently beholden to China. The world’s second-biggest economy controls 70% of the planet’s lithium refining capacity and as much as 95% of production for other crucial materials needed to make EVs, according to BloombergNEF. Redwood is attempting to break that stranglehold by creating a domestic loop using recycled critical metals.”

Lessons from the Ultra-Wealthy – via Frederik Gieschen

  • Key quote: “Wealthy doesn’t mean rational. The wealthy have access to an elite global pool of advisors and one could assume their decisions regarding money and investing are similar, rational, and smart. In reality, just like you and I, the wealthy are shaped by a mix of personality, experience, peer group, media consumption, and advice. Their relationship and decisions regarding money, what its nature is, what should be with it, how to invest it, and whether they deserve it, can be completely different, even irrational or contradictory.”

Reed Hastings, Co-Founder of Netflix — How to Cultivate High Performance – via Tim Ferriss

  • Key quote: “And the big picture is I’m in the camp that culture eats strategy for lunch. It’s all about culture. And whether it’s my first company, Pure Software, whether it’s a second one, Netflix, or third one Powder Mountain, its culture runs through all of that. How do you get human beings to work well together and accomplish amazing things? And one of the aspects of that is being around other incredible performers. So if you think about a sports team, if you want to win a championship and you’ve got 11 slots, you’ve got to have the very best player you can get in any position. And they have to be a great team player, work well with others.”

Invest for the Decades, Not the Years – via Nick Maggiulli

  • Key quote: “This demonstrates that, when investing over time, a Japanese investor would have only been underwater from 2000 to 2017, a 17-year period. The rest of the time, it would have (more or less) been in the green. While this outcome isn’t ideal, it’s arguably 2x better than someone who invested at the 1989 peak and had to wait 34 years before seeing a positive return. This demonstrates the hidden beauty underlying a strategy like Just Keep Buying. Even in one of the worst equity markets in history, someone who bought over time would’ve done okay if they had just stuck with it.”