My Kid's Trust Fund Says" Get Back To Work"
Patrick posted an ad from a bygone era.
I picture Tim Allen reading that tweet, “They don’t make men like they used to, arh arh!!”
There are a lot of psychohistory comments in that thread but I’m gonna stay on the surface.
Josh commented predictably. He’s a VC and is generally quite vocal about the importance of startup teams working in-person.
[I’m not wading into the binary in-person vs remote debate. One of my smartest buddies runs a SaaS startup with 50-75 employees and would die on the in-person hill as far as the ability to compete in his space. I have other friends running fully distributed trading firms. Personally, I felt like being remote was fine, but I’m old, with established relationships and never worked in places with high colleague churn anyway. I’d just defer to whatever people who run stuff decide is best for their own organizations. I don’t need to have a global opinion on this.]
Ok, I’ll preface this by saying I like and follow Josh. But while his tweet advances his own consistent beliefs, I had the same reaction to the tweet as @ferventfinance — the issue of remote work is impertinent to the ad’s call to adventure.
We are taking Josh’s tweet too seriously, but it got a lot of love and I’m a bit wary of the sentiment behind that. If I had to project, I’m guessing the average person who hearted that tweet would strongly agree with the statement “entitled millennials/zoomers are destroying America”. Ironically, I don’t think Josh would agree with that. And I don’t agree with that statement either.
The sentiment is a close cousin of “people don’t want to work no more”. I’m sorry but if you feel like nodding along with that, hurry along —there are kids who need to be told to get off your lawn. In Nobody Wants To Work Anymore, Joachim Klement humorously (it takes 15 seconds to scan that post) reminds us that serious men have been shaking their fists at clouds for over a century.
And even if the sense that nobody wants to work was somehow more valid today than it was in those old newspaper clippings, you’d have to wonder what prompts that perception. The “back-in-my-day-I-walked-uphill-in-the-snow-both-ways” conservative slant will gravitate to explanations of declining work ethic. The liberal, Zach de la Rocha slant will scream that even if that was true, it was because a regressive system has reinforced Matthew effects until discouragement finally surrendered to alienation.
First, I’ll ask you. If you have any thoughts or want to share links that you found compelling on this please pass them along. I confess. My own impulse leans more towards the RATM side. I said “lean”. The first rule of Fight Club is you never go full Epsilon Theory. [A revealing barometer for this readership is how many people got that reference. I’m always testing you even if you don’t know it. Muahuhaha].
It’s hard to put my finger on it, but it feels like some social contract has been unraveled. That unraveling feels like it’s been happening since the internet took off and accelerated since the pandemic. I’m not a great student of history and any opinion I have about culture at large is discardable as lazy vibes. Instead, I’ll just point you to people who seem to be doing a decent job of investigating the scene of the unraveling.
Last week, I mentioned Rob Henderson’s Happiness Lottery. One of the quotes I excerpted is directly relevant to Patrick’s tweet:
I will never tire of highlighting this simple and profound finding: Sociometric status (respect and admiration from peers) is more important for well-being than socioeconomic status. In his powerful book Status Anxiety, Alain de Botton writes: “Provided that it is not accompanied by humiliation, discomfort can be endured for long periods without complaint. For proof of this, we have only to look to the example of the many soldiers and explorers who have, over the centuries, willingly tolerated privations far exceeding those suffered by the poorest members of their societies, so long as they were sustained throughout their hardships by an awareness of esteem in which they were held by others.”
Look at us today. We worship riches. We have spineless leadership, an assertion that needs no supporting evidence. The richest man in the world is a pathological liar who can’t resist the juvenile urge to move asset prices around with his thumbs. With the energy of a child who takes their ball and goes home, he bluffed that he would actually buy Twitter. He believes he’s above the law and who knows, maybe he is. But he’s long since discarded the looser pro-social ties of honesty and therefore honor.
Start to google “veterans” and this is the auto-complete:
That’s hardly scientific, but don’t you have the sense that the people who serve must look around at the leadership and think they’ve been played for suckers? The idea of doing the right thing feels like it’s becoming…quaint. You’re a patsy in a world of climbers all trying to “build generational wealth” so their children can be above the calls for cooperation1 from which true honor derives.
The children. Oh no, they won’t be failsons. From the grave, our trusts will guide our precious legacies, oops, I mean heirs and grandheirs. We’ll leave them links to threadbois explaining how they too can roll up dentist offices to flip to Blackhenge or whatever fund has $2 quadrillion of AUM and a negative cost of capital. Welcome to the mind of mobile capital in 2022.
Here’s a quaint thought. Role models matter. If people don’t want to go to an office, it’s exactly because there’s no adventure there. It’s not in their bedroom either, but at least they don’t need to suffer the indignity of risking their life on BART so their boss can exit at a high enough multiple to take some time off, before he searches for the CIO that will lead his family office. If the team energized you and you believed you needed to be in-person, you’d go. Note I said “energized” not “incentivized” because we take that word way too narrowly. That was Henderson’s point.
There are athletes who will run through a wall for their team and their coach. That feeling hasn’t disappeared. The people who inspire it have.
Umm, sorry. That got a bit out of hand. I might have blacked out for a second.
Seriously, back to people that are making reasonable guesses about what the hell is going on. Jim O’Shaughnessy (Patrick from the first tweet’s father) hosts the Infinite Loops podcast. He is well-read and gets smart guests who can go toe-to-toe with him in exploring what he refers to as the “Great Reshuffle”. A recent episode with Matthew Clifford made me listen twice. I pulled some takeaways that tie in well with today’s ramblings. You can check them out but I of course encourage you to give it a listen. Matthew is humble, brilliant, clear-eyed yet optimistic (I know that sounds impossible but just listen).
5 Ideas By Matthew Clifford on the Infinite Loops Podcast (14 min read)
If I excerpt here, it will be too long…it was a dense discussion and I did my best to distill what stood out to me. I reduced it to 5 topics:
Modernity as the rise of variance-dampening institutions
The internet as a variance amplifier and the role of ambition
A verdict on whether the internet is a net good or net danger?
Balancing equality and efficiency in the name of self-preservation
Moral luck (which reminded me of epistemic humility as kindness)
For the people interested in Matthew’s prolific knowledge on backing start-ups, the back half of the episode is loaded with insight and a crazy stat about Iranian entrepreneurs in Singapore.
If you want to dive deeper, Matthew’s book was just released Thursday and is already #1 in its category on Amazon. Looks like a great read if you got dat thymos feelin.
How to Be a Founder: How Entrepreneurs can Identify, Fund and Launch their Best Ideas (Amazon Smile link)
[Note this is the Kindle version. The hardcover comes out in October]
First I want to ask a favor. My buddy Dan is interested in understanding how traders and investors would like to consume social data. Here’s a blurb and request by him. Many, if not most of you, (I realize I need to make a survey to learn more about y’all) are market nerds so please give it a thought. Dan is super nice and thoughtful and I think anyone who reaches out will be pleasantly surprised how much they learn while offering their own thoughts. This isn’t an advertisement, there’s nothing for sale.
Social media is the glue that connects our society. Social has disrupted tech, media, politics, and even upended governments. And last year it disrupted our financial system when retail investors took on Melvin Capital over GameStop. Social continues to grow in importance - every day, there are millions of conversations happening around financial assets.
But social is not only a driver of market activity (like with Gamestop), but also a signal. It’s the first place people share news and talk about earnings. It’s where people discuss options flow, commodity developments, and the hottest cryptocurrencies. Social insight mitigates risk, facilitates more complete research, and can be used to find new trade opportunities.
But social data is hard - it’s unstructured and requires significant overhead to properly analyze. And it's important to not only account for what's being said, but who's saying it.
Popstox commoditizes and improves on capabilities previously available at only the largest funds and offers solutions for both retail and enterprise. The team brings 10+ years of experience building social analytics solutions for executives at large companies like Nike, Microsoft, Ford, and Procter & Gamble - we know how to make social insights actionable.
We'd love to talk to any traders who are interested in better understanding public discourse around financial assets, either in an individual or institutional context. You can reach out to us at email@example.com - just mention Moontower in your subject line!
Benn Eifert frustrates me. I spend a lot of time trying to wordsmith finance concepts in a way that is sticky and simplified without losing nuance. Benn hops on podcasts and masterclasses this exact task without breaking a sweat. I took notes on his latest Odd Lots appearance. If I can’t beat him at communicating, maybe the next best thing is just having my own work justify why you should care about what sections of the interview I found most important. On a long enough timeline, I’m just a “if you like Moontower, you’ll probably like this” recommendation engine. Someone tell Netflix to buy me out. A 10x multiple on zero is still…doh. Tell’em I’m pure extrinsic and vol is going up.
On to the takeaways:
Excerpts From Benn Eifert on the Odd Lots Podcast (14 min read)
The craziest aspect of the investing mania of the last few years was the role of sophisticated institutions
The role of narratives and how the ability to spin them about the future can become a gray area or market failure
There’s a related bit at the end of the podcast that ties back to free market roots of crypto which is ironically self-skewered by grift. (Btw, Wall St is kind of run by people who read Ayn Rand in HS. Whether they unseated the steroid version of it from their minds depends on how convenient it is for them)
The challenge of separating hype from real change. The trick is to realize it’s much easier to rule-out than rule-in. What are the flags?
Despite the “money printer goes brrr” meme, low rates are not just a “dial that determines the level of speculation”. Although the narrative effect of the meme itself may have been a contributor.
Why the froth probably isn’t over
Will there be people who learn from the scars and embrace investing more deeply as opposed to just turning their back on what they think is a rigged game?
As you guys know I like to share stuff I’m doing with the kids in case you find it useful for your own teaching desires. Lately, I’ve been trying to help Zak (turned 9 last month) learn a bit of Excel. Excel is inherently useful but it’s also a bit of a coding language so it’s a soft onramp to thinking logically and computationally. We did several small Excel projects together this summer. I will IV-drip them to you over time but for today I’ll share one we did just this week.
Zak likes math in general and I often ask him to work on his workbooks (we just got both Zak and his 6-year-old bro Kanagaroo Math books. They require more creativity than Kumon-type stuff and also you can enter their international math competition in March.) Anyway, I asked Zak to “go do some workbook” and he asked if instead, I could give him a bunch of multiplication problems involving 3-digits.
Zak, how about we use Excel to generate the questions? He doesn’t know how to do that so we:
Break the problem into small steps.
Use the Socratic method.
If you want to replicate this with your kids, here’s a loose script.
Step 1: We need to generate 3 random numbers.
This didn’t go quite as planned. Zak went to Google and discovered on his own that he could use Excel’s RANDBETWEEN() function to generate a number between 100 and 999. I gave him a ton of praise for being resourceful. This is basic adulting really. But also, I wanted this to be more involved so I said let’s try to do it another way.
Here’s what I asked him:
What digits can exist in each of the ones, tens, and hundreds place?
The very act of asking him put him on alert. He recognized that while the ones and tens place can be 0 thru 9, the hundreds place could only be 1 thru 9. Nice work Zak.
Excel’s RAND() function generates a number between 0 and 1.
How do we make a number between 0 and 9 if we start with an Excel random number?
He realized that we need to multiply the number by 10 but I had to prompt him for a bit.
How do we get rid of the decimal?
Zak: we can round
How’s that going to work?
Zak: we want to round down (after he considered what would happen in both the round up and round down cases. You don’t want 9.4 or 9.8 to ever round up because 10 is not a valid output for our purpose).
Great. Now we get a PEDMAS lesson. Excel solves parenthesis first. With some handholding we arrive at the function for the ones and tens place:
=ROUNDDOWN(10 * RAND(), 0)
The zero was also a good lesson. Excel is not a mindreader, you need to tell it how many decimal places to go to.
But what about the hundreds place? How are you going to convert a random number between 0 and 1 into 1 thru 9?
Ok, what if you needed to take a random number and convert it to a 1 or 2?
Zak suggests doing what amounts to an IF-Then-Else statement.
Good. What’s another way to do that using multiply or divide?
He got stuck here and I had to play the scenario game with him.
What if we multiply by something other than 10?
And…he lost stamina. That’s ok. We can come back to it. I ultimately explained it, but I’ll ask him to reproduce it soon enough. He still won’t know how and we’ll have to go through all of this again. That’s also expected and ok. Every time we work through it, I suspect the web of thinking fibers thickens a bit, his stamina inches ahead, and most importantly he gets used to the idea that work without a satisfying end is ok. Enjoy the smaller milestone victories along the way. He’s still much further than he was when he woke up because he got to stretch a bit and exercise that little bicycle up there in a systematic way.
Just to be complete about this post, the answer is that instead of multiplying by 10, you multiply by 9 (you are trying to take a continuous range of numbers and bin it into 9 discrete numbers), but remember you must also round up this time, because we want the range to be 1 through 9 not 0 through 8.
=ROUNDUP(9 * RAND(), 0)
From there, just
a) concatenate the 3 digits
b) multiply each digit by its respective place (so the first number by 1, the second number by 10, and the one we generated with ROUNDUP by 100) and sum them all together.
We did both methods just to be complete.
And voila, now he can generate his own worksheet of 3-digit multiplication that’s different every time.
I will be sharing some more kid stuff in the future. A select few from the archive:
A Socratic Money Lesson For 2nd Graders (3 min read)
Hands-On Resources to Teach Kids About Business (2 min read)
Bohnanza Is A Great Trading & Business Game (3 min read)
Thoughts About Monopoly As A Teaching Tool (2 min read)
From My Actual Life
I just want to acknowledge that this week and last week’s main Moontower essays were kinda snippy. It actually betrays how I’m feeling lately which is extra cheerful. My birthday was 5 weeks ago and since then I’ve given up drinking, processed carbs, grains, caffeine (I cheat about once a week on that but I’ve also been mostly off caffeine since January), and very spicy food. I’m not even drinking bubble water or diet soda. The only liquid I have today is flat water. I’ve also been exercising 5 or 6 days a week even if it’s just attending a foam-rolling type class.
I’m 44. I have high blood sugar, high blood pressure, acid reflux. My family history isn’t great. There’s no imminent problem, but I’m not elastic anymore. It’s harder to lose weight even when I try. It will only get harder as I age, so it’s wise to rediscover higher self-expectations today (yesterday really, but you know that saying about the best time to plant a tree).
I’ve always been unbending about my cold-turkey interventions. It’s not rooted in logic. It’s just what works for me. The interventions self-reinforce each other. When I eat clean I want to exercise and when I exercise I want to eat clean. Irrational or not, I don’t care. I know the desired outcomes and rather wasting time with precision (ahem, analysis paralysis), I’d rather carpet-bomb myself.
Those who know me well, know I’m both a hypochondriac and have a history of self-hacking interventions. I was hardcore paleo for almost 8 years I won a clean eating contest in Crossfit at age 31 and just kept going. Incidentally, I started the contest the day after attending the Kentucky Derby so it was a great way to recover from all the mint juleps and Pappy Van Winkle that ICAP pumped into us. And a mystery I’ll never solve — eating paleo2 somehow cured my lactose intolerance.
Fun fact: Yinh and I even hosted a 9-week paleo challenge for our friends and family. We literally spent 4 hours a night scoring more than 50 people's food choices (you had to take photos of every meal). The prize pool was about $2,000 and your odds of placing were proportional to your final score. I'm proud to say that there were 2 more challenges led by "graduates" of the first one. We stepped down from administering them because it was way too much work but I'm glad we kickstarted it. Most importantly, everyone learned about what they put in their bodies.
Just a shout-out: I'd bet most of the contestants were the first subs who agreed to receive an email called “Moontower” many years later. Those who have put up with my whimsical ways for decades...hi, I love you all :-)
There were other interventions too. I did Atkins in college after gaining a Freshman 30. I can remember eating 1/2 stick of butter as a meal once, determined to get the right color on those keto-stix. It’s also what got me into diet soda which was a crappy parting gift. I did intermittent fasting for 3 years from 39-42 years old. Yinh thinks my bizarre
experiments struggles have to do with going on Weight Watchers in middle school because I was a fat kid from ages 6 to 13. I’m not sure if WW mattered because puberty was a major reset for me as I lengthened out. Still, weighing my food and knowing calorie counts is muscle memory. I’m not sure if this obsessiveness is a net positive but it’s easy for me to just decide I’m going to cut X or Y. (I’ll admit, cutting booze is hard socially, but since my peers are now older I don’t have to deal with immature peer pressure. Everyone that’s older gets it. In fact, I have felt more respect than judgment from others which is flipped from how this would have went in my 20s. It’s still hard. I like beers and cocktails. We’ll see what happens on all that. For now, I’m fine tee-totaling).
I have never set a time limit on my interventions. I just start. Actually, that’s not true, I once watched a totally unconvincing documentary called What The Health. I was cursing at the screen because I thought it was such cherry-picked garbage that Yinh almost fell off the couch when I announced I was “going vegan” for the next month after watching it. The movie was stupid but I thought the experiment would be fun. (Side note: we want to French Laundry that month for our SIL’s birthday and I stuck to my guns opting for the vegetarian menu. That was a waste of $$).
Anyway, I don’t know how long this will go on but my energy is up, my workout capacity is increasing, albeit from a low level, and my I’m more bushy-tailed than usual. Maybe those cranky takes were just the last of some residue I needed to shake, but upcoming Moontowers will be more focused on usefulness, growth, learning, and all that other quaint stuff done in my California sober (I recently heard this expression) way.
Stay (extra) groovy!
Moontower On The Web
Cooperation. Flip a vowel to a consonant and a consonant to a vowel and you get Corporation. Jack White has a song of the same title whose words and music befit the message. A few lyrics:
Yeah, I'm thinking about starting a corporation
Who's with me?
Nowadays, that's how you get adulation
Who wants to start a corporation?
I'm thinking about taking it all the way to the top
Who's with me?
I'm gonna buy up all the empty lots and make one giant farm
Who's with me?
Yeah, you know what I'm talking about?
Who's with me?
Yeah, I'm thinking about starting a corporation
Who's with me?
Take it right to the top
Enjoy the vid and the song: