Clear Eyes, Full Hearts, Can't Lose
October 2, 2018·20 comments·things fall apart
We're living in systems that no one can predict or control. Central banks and institutions have tried anyway, creating polarization in politics and concentration in markets that feel permanent but aren't. Yet most people respond to this chaos by searching for an Answer: the right candidate, the right investment strategy, the one true explanation. This search for certainty is exactly how we become the thing we fear.
• The polarized electorate and the monolithic market both feel stable, but they're governed by a system that has no solution. The Three-Body Problem in physics proves that some systems can't be predicted no matter how much data you have. Neither politics nor markets are exempt from this rule, yet we keep acting like they are.
• When humans can't find the Answer, they don't accept uncertainty. They convince themselves they've found it anyway. This is how gold bugs and central bank devotees and Bernie Bros all become equally certain they hold the truth. They're not wrong to seek clarity. They're wrong to think they've found it.
• The path away from this trap isn't another Answer. It's a Process. The Protestant Reformation rejected the idea that you need priests to interpret truth for you. Today's Missionary caste wears different robes: pundits, economists, investment advisors. They're selling the same con dressed up in new language.
• The Process has six dimensions: seeing the Narratives, Abstractions, Metagames and Estimations that control you, then acting for Reciprocity and Identity. But Identity is the hardest and most important. It means doing what's right for the right reasons, not for the greater good someone else defined.
• When you start compromising on why you act, there's no limit to what you'll eventually compromise. This is how free people become Rhinoceroses. The only antidote is the courage to say "I am" and mean it.
Subscribe Today to Read More
Unlock instant access to this and hundreds of other evergreen essays that explore the world of narrative through hard science and human wisdom.
- Make more informed decisions as an investor and citizen.
- See through the nudges of Big Politics and Big Media.
- Become a better consumer of news.
- Maintain your autonomy of mind in a swarm of narratives.
- Join a community of more than 100,000 truth-seekers.
Looking for Deeper Insights?
Unlock exclusive market intelligence, trade ideas, and member-only events tailored for investment professionals and active investors with Perscient Pro.
VISIT PRO
DISCLOSURES
This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results.
Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.
Comments
Just wanted to say thank you. Grew up dirt poor but smart as shit and got sucked into the worst of our narrative-driven ‘elite’ institutions (Ben Bernake was my econ professor - vomit).
Went to actual war a few times in the interim for my troubles. I remember being on a patrol base in Iraq, late 2008, a few random explosions here and there to punctuate the discussion of the US economy falling apart. Telling my soldiers (a bunch of 18-year-old kids from shithole places in the south and midwest like me) how those guys knew what they were doing, necessary to save the economy, yadda yadda yadda. They called bullshit, I disagreed at the time. They were right. Heaps and heaps of bullshit.
Wife has a similar story. Both of us spent the better part of a decade wasting our lives ‘changing the world’ for big tech and big law. We lit it all on fire a few years ago and haven’t looked back. Have a three-year-old daughter now and have tried to live something close to what you have here since she came around. Couldn’t put it into words as well as you have. Godspeed.
P.S. You should read the Stormlight Archive if you can spare time for a fantasy epic- best encapsulation of how to be a decent human in a fallen world I’ve read in a very very long time.
Heard.
I consider myself very well read. You sir, are a struggle to read; and I mean that as a compliment.
I’ve enjoyed Epsilon Theory for the past 2 years and it’s been a wonderful source of education and it goes beyond finance. I find myself drawn to this type of discussion and world view and subscribe to several people with similar styles and perspectives.
However, it dawned on me that my desire for intellectual contrarian financial discussions might be a narrative I’m biased to accepting. The narrative is as follows: Someone on the outside like myself who doesn’t want to be “scammed by the financial system” will use his intelligence and true grit to persevere above the financial charlatans who are currently making money through ignorance. My biggest concern is that this narrative isn’t true and these intellectual discussions of human nature mapped to financial markets with $10 words thrown in is just an illusion to hide the simple fact that…I’m really an idiot. Is it possible that in the pursuit of understanding how foolish others are, we simply just constructed our own narrative and abstractions that commit very same sins as those of who look down upon?
Hope no one is offended. Still love Epsilon Theory though! I just wanted to pose to the community to see if anyone had similar concerns.
For what it’s worth, neither I nor Ben would take any offense at this line of thinking, because…well, because we wonder about the same thing. It was what I had in mind just last week when I was writing Deadly. Holy. Rough. Immediate. (http://www.epsilontheory.com/deadly-holy-rough-immediate/) The basic issue you’ve got your finger on, I think, is that we are all constantly telling each other stories. All communication is passed through a filter of “how I want this person to think,” and “I want all these people to see that finance is full of abstractions and Narrative” is absolutely a story we are telling you.
The question - in my opinion, anyway - is (1) who we will trust, knowing that they will be telling us stories (and we them), and (2) who will work with us in good faith to cut through abstractions in our communication with each other to be more real, tangible, authentic and direct. It’s hard for us, too.
That really helps a lot. Much appreciated
People just love stories don’t they? As a kid “once upon a time” was a magic attention grabber. Very little changes so as you say always ask why you are being told what you are being told.
Ben - the idea of having a process was there in plain sight all the time! I do so enjoy your writings You have helped me to understand why I feel the way I do and feel a lot less “helpless” into the bargain.
I am really looking forward to following your new adventure as well as being a part of it in any way I can. Do let us know when you are going to be in the UK ???
All the best Clive
Thanks, Clive! Will definitely keep the Pack up to date on travel plans and speaking engagements.
I just became a Member of the Pack, and I wanted to comment on this piece as I found it very beautiful and profound, and I believe Ben described it as sort of a new manifesto. I’m firmly ensconced in BigLaw but I’m not an attorney, I work in accounting.
Ironically as I was hemming and hawing over subscribing here, and whether I should do the monthly vs. annual subscription (yup, accounting!), my company announced a bonus due to the end of our (successful) fiscal year which made it very easy to say, “Yes, annual subscription please!”.
I love the thoughtful posts that make me realize things that would never have occurred to me otherwise. I try to surround myself with many different voices so I have a less narrow perspective, and Epsilon Theory has become a huge part of that.
Ok have to bring this home, but one quick shout-out to Andrew Horowitz’s Disciplined Investor podcast (NOT sponsored), because that is where I first came across Ben. He was describing a financial concept using the work of Eadweard Muybridge. Mind. Blown.
Just to be clear, I was going to subscribe regardless – but the bonus made it much easier to choose the annual subscription.
Continue the discussion at the Epsilon Theory Forum...