If you’re like me, you’ve been put off from digging deeper into DeFi by the terrible signal-to-noise ratio of anything crypto-related on the interwebs. That’s why I found this DeFi primer (using Maker DAO as a specific example) by ET contributor and banking analyst Marc Rubinstein to be so fantastic.
Lawrence Yeo once committed 100 hours to write a single story. He just wanted to know what would happen if he put that much time and effort into something. No expectation, just curiosity.
Bill Stephney, after introducing Chuck D to Rick Rubin (and Hank Shocklee along the way but, don’t let me rabbithole you too on this story), helped manage Def Jam way back at the beginning of the label, where he learned to ask up and comers if they wanted recognition, money, or celebrity status – because they’d have to focus on one of the three. He learned not to have an expectation too, and he let the curiosity guide him.
Which – the external validation, as tempting as it is, of knowing your 100 hour project will succeed or basking in the glory of your status, wealth and fame, always (ALWAYS) succumbs to the internal reality of – did you get what you really wanted?
In Lawrence’s case, it eventually led him away from a career in music, a career on Wall Street, and into a career in writing (first book, “The Inner Compass” out now).
In Bill’s case, it eventually expanded from a career in music, to the business of music in movies, documentaries, and even high education.
The overlap is that the external validation ultimately means nothing, even if it’s where we want to focus. It really is a trap. And these two have both figured out how to stay out of it.
Read more at cultishcreative.com
Eric Markowitz shared this Nassim Taleb quote in The Nightcrawler last weekend and it’s rattling around in my head:
The more rational we become, the more blind we are to our own irrationality.
Nassim Taleb
You can reduce, simplify, and get everything fitting into your head all tidy-like.
All the numbers can add up. The i’s can be dotted and the t’s can look to be crossed.
Maybe it’s damn near perfect after a while.
And all it does is open you up to a bigger disaster.
There’s comfort in living with some mess.
I pretty much expect I am always in a bit of a mess. I don’t like to be surprised by it. The chaos is just there and that’s fine.
For example – I thought I had a whole week of posts scheduled out on Saturday this week.
Read more at cultishcreative.com
Engagement’s a trap. Or maybe it’s a myth. All I know is – it’s real, but it’s also not reality, and if you’re confused, you’re onto a truth that will set you (and whatever you’re creating) free.
Mike Cessario is the CEO/Founder of Liquid Death and, no matter how dumb you feel like the company is (or how amused you are by a CEO who wears Deicide shirts), he knows a thing or two about reaching an audience and inspiring action.
If you’re obsessed with comments, likes, and engagement rates, I need you to see this:
90% of people on social are passive observers who do not engage by clicking like buttons or posting comments. They treat social media the same way they treat their television: they sit back and watch the circus.
Mike Cessario, CEO/Founder at Liquid Death
Marketing extraordinaire Jack Appleby put that idea in my inbox this week (he was probably wearing a Taking Back Sunday shirt). It came on the same day I happened to be listening to Bob Pittman (MTV, Nickelodeon, basically the creator of my entire childhood education, and current CEO of iHeartMedia) get interviewed by Rick Rubin (who… same pitch). Bob was talking about the Spotify vs. radio stats and – just read this too:
Ad supported Spotify or ad supported Pandora reach about 20% of America. We reach 90%.
Bob Pittman, iHeartMedia CEO
More people listen to the radio today than did 10 years ago or 20 years ago.
Read more at cultishcreative.com
I am impossibly betting that sometime in 2002 I saw Atmosphere on the God Loves Ugly tour in the 300ish person room below Pearl Street in Northampton, MA. If you know otherwise, or if you gave me a ride there, or whatever, feel free to clarify. The internet has failed me in this regard.
And, more specifically, I saw Atmosphere, a bunch of Rhymesayers artists, and Mr. Dibbs.
DJs have always been fascinating to me. Mr. Dibbs included. The curation and choices and room-reading (and occasionally lack of room reading) fascinates me.
It was probably all the years in high school I spent playing for real money in cover bands in bars, relative to the time I spent playing for minimal door money in original bands in indie/all-ages clubs.
Getting a room to appreciate an original is really hard. It’s your art and it’s being judged. LIVE.
Now, copying an oldie but a goodie in a cover band, while easier and you have better odds of achieving audience approval, you still need to do something to either make it your own or strive for the level of mastery the original artist had.
I won’t turn this into a rant on my hatred for lazy cover bands. They exist.
But, I will take this back to my admiration for DJs who don’t have to play cover songs because they can play the source material. The best DJs can even make something special out of it. Originality in DJ routines is magic to me (and massively undercelebrated).
Read more at cultishcreative.com
Name Your Critic
The most paralyzing creative fear isn’t real criticism – it’s the imaginary collective judgment we carry in our heads. James Clear’s insight cuts through the fog: when you worry about “what other people will think,” you’re usually not worried about any specific person’s opinion. The moment you name the actual critic, you often realize you don’t respect their judgment anyway. This simple practice of naming your critic dissolves most creative paralysis because cruel critics usually reveal themselves to be people whose opinions don’t actually matter to your work.
The Raw File Approach to Networking: Morgan Ranstrom Returns TO JUST PRESS RECORD
We have a compression problem. AI and algorithms compress human experience the same way Spotify compresses audio files – technically functional but missing crucial data. Morgan Ranstrom’s insight about treating genuine conversation as “raw file” networking versus algorithmic compression explains why so many professional connections feel hollow. Real relationships preserve all the data: pauses, tangents, cross-industry pollination, and moments where ideas actually compound in real-time. Your Personal Archive matters because you’re building an uncompressed library of human experiences while everyone else accepts compressed files.
Grow Your Network: Morgan Ranstrom Is A Purposefully Thoughtful Advisor and Musician
Everything compounds – for you or against you. Morgan’s framework for intentional living centers on recognizing that neutrality doesn’t exist in personal development. His decision to trade Friday nights for Saturday mornings captures the profound challenge of right living: making choices today that your future self will thank you for, even when present benefits aren’t visible. The Napoleon tree story illuminates legacy thinking – planting trees you’ll never see requires ego reduction but creates the most lasting impact because it frees you from needing immediate validation.
Grow Your Network: Rupert Mitchell Is A Market Translator Who Turns Chaos Into Clarity
The greatest competitive advantage isn’t being in the thick of every battle, it’s having perspective to see patterns others miss. Rupert Mitchell’s transition from investment banking to independent research gave him something invaluable: distance that allows pattern recognition impossible under execution pressure. His celebration of generalism – from feeder cattle to SaaS companies to Japanese rice harvesters – isn’t scattered thinking but strategic diversity. Fresh perspectives reveal insights that specialists, trapped in expertise, completely miss. The transferable skills that matter aren’t technical ones that become obsolete, but human skills that compound across decades.
Read more at cultishcreative.com
Lawrence Yeo once committed 100 hours to write a single story. He just wanted to know what would happen if he put that much time and effort into something. No expectation, just curiosity.
Bill Stephney, after introducing Chuck D to Rick Rubin (and Hank Shocklee along the way but, don’t let me rabbithole you too on this story), helped manage Def Jam way back at the beginning of the label, where he learned to ask up and comers if they wanted recognition, money, or celebrity status – because they’d have to focus on one of the three. He learned not to have an expectation too, and he let the curiosity guide him.
Which – the external validation, as tempting as it is, of knowing your 100 hour project will succeed or basking in the glory of your status, wealth and fame, always (ALWAYS) succumbs to the internal reality of – did you get what you really wanted?
In Lawrence’s case, it eventually led him away from a career in music, a career on Wall Street, and into a career in writing (first book, “The Inner Compass” out now).
In Bill’s case, it eventually expanded from a career in music, to the business of music in movies, documentaries, and even high education.
The overlap is that the external validation ultimately means nothing, even if it’s where we want to focus. It really is a trap. And these two have both figured out how to stay out of it.
Read more at cultishcreative.com
Eric Markowitz shared this Nassim Taleb quote in The Nightcrawler last weekend and it’s rattling around in my head:
The more rational we become, the more blind we are to our own irrationality.
Nassim Taleb
You can reduce, simplify, and get everything fitting into your head all tidy-like.
All the numbers can add up. The i’s can be dotted and the t’s can look to be crossed.
Maybe it’s damn near perfect after a while.
And all it does is open you up to a bigger disaster.
There’s comfort in living with some mess.
I pretty much expect I am always in a bit of a mess. I don’t like to be surprised by it. The chaos is just there and that’s fine.
For example – I thought I had a whole week of posts scheduled out on Saturday this week.
Read more at cultishcreative.com
Modeling Common Knowledge by analyzing Missionary statements and their reverberations works. Except when it doesn’t.
What do you get when you give a Raccoon billions of dollars AND invisibility from regulators? Collusion and insider trading.
Most of us are under the impression that a protracted conflict within China will increase national unity. Not this time.
Recent Notes
Failure to Inflate
On episode 25 of the Epsilon Theory podcast, we’re joined by Peter Cecchini, Chief Market Strategist, Head of Equity Derivatives and Cross-Asset Strategy at Cantor Fitzgerald, to discuss one of his recent notes, “Failure to Inflate.” As Peter writes, “The theories that guide monetary policy fail to explain why growth and inflation remain so low in developed economies.” Tune in to hear why this is and what might bring about higher inflation.
Massively Fast Compute, AI Algorithms and Blockchain Development (by Silly Rabbit)
I’m limiting this week’s Rabbit Hole to three links which represent the rapid tick-tock of the trifecta of massively fast compute, AI algorithms and blockchain development as I believe that these are the top three technology mega-trends of the 2015 – 2025 period (ex-Life Sciences innovation).
Sheep Logic
In Part 6 of the Notes from the Field Series, Ben observes that we think we are wolves, living by the logic of the pack. In truth we are sheep, living by the logic of the flock.
Information Bottlenecks, Fake News and Boredom (by Silly Rabbit)
A new idea called the “information bottleneck” is helping to explain the puzzling success of today’s artificial-intelligence algorithms — and might also explain how human brains learn.
The Myth of Market In-Itself: Things That Matter #3, Pt. 1
Benjamin Graham famously said that the market is a voting machine in the short run, and a weighing machine in the long run. This is a right-sounding idea. It is also wrong. Behavior matters over every horizon.
The Jukebox Theory
We’re back with episode 24 of the Epsilon Theory podcast! Ben shares his thoughts on the inflation narrative and a new idea reminiscent of C-SPAN to make politics at every level more transparent and engaging.
Youth, Immutable Content, and the Secondhand Scoop (by Silly Rabbit)
This week’s Rabbit Hole column is more thematic with recent links that I found interesting around the topic of ‘news,’ on which Ben wrote the defining commentary of recent years with Fiat Money, Fiat News.
Mailbag! Fall 2017 Edition
Back by popular demand, it’s the Epsilon Theory Mailbag! “Always Go To the Funeral” and “The Arborist” Another rifle shot to the crux of the…
A Taxonomy of Humans, Evolution and Aliens (by Silly Rabbit)
Leonid Moroz has spent two decades trying to wrap his head around a mind-boggling idea: even as scientists start to look for alien life in other planets, there might already be aliens, with surprisingly different biology and brains, right here on Earth. Those aliens have hidden in plain sight for millennia…
Before and After the Storm or: Make America Good Again
What does the path of history tell us? What does the aftermath of one of America’s greatest natural disasters and human tragedies tell us? What can we do to survive and escape a Competitive Game that doesn’t allow us to pull away from the table? If you’re reading this, you’re probably in the investment industry, or at least have an interest in financial markets. If you’re in the investment industry or in the financial markets, you like to win. So you’re not going to like my answer.
We play. And we lose.
Always Go To the Funeral
There’s a pose that very sick farm animals sometimes take when they’re near death, where they lie down and twist their head way back into their shoulder in a very unnatural way. It’s an odd sight if you don’t know what it signifies, a horrible sight if you do.
Both the Republican Party and the Democratic Party are starting to twist their heads back into their shoulders. I don’t know if it’s too late to save them or not, but I’m increasingly thinking that it is. We need to start thinking about the funeral, who’s going to speak, and what they’re going to say.
Revenge of the Humans, Emojis & Mushrooms (by Silly Rabbit)
Portfolio Manager — Of all the roles this is where I think things really need to change in terms of who sits in this seat. It can no longer be hedge fund bros, they simply won’t survive here. Nor will the pure gunslingers and tape readers, gone. And you certainly don’t want the pure quants sitting in this seat. PMs of the future are going to be far more interpersonal and process driven….
Data Access Battles, Creative Thinking & Full Script AI (by Silly Rabbit)
A couple of weeks back I shared a link to the story of ImageNet and the importance of data to developing algorithms. Ars Technica reports on two ‘at the coalface’ battles over data access with HiQ and Power Ventures fighting with LinkedIn and Facebook over data access. I’m not advocating a position on this but, to be sure, small — and currently obscure — court cases like these will, cumulatively, end up setting the precedents which will have a significant impact on the evolution and ownership of powerful algorithms that are increasingly driving behavior and economics.
The Arborist
In Part 4 of the Notes from the Field Series, Ben identifies how the natural lines of a tree and shaping the tree to follow those lines over time is a lot like shaping a portfolio.
You Still Have Made a Choice: Things that Matter #2
Diversification is clearly one of the things that matter. Unfortunately, most investors pursue the meme of diversification! instead of the real thing, and end up with a false sense of security and inefficiency.
AI BS Detectors & the Origins of Life (by Silly Rabbit)
Confidence levels for the Social and Behavioral Sciences, Claude Berrou on turbo codes and informational neuroscience, and thermodynamics in far-from-equilibrium systems.
Horsepower
There is no animal more important to the ascendancy of Western Civilization than the horse, and no invention more important than the horse collar. After all nothing shapes history like advances in productivity. Part 3 of Ben’s Notes from the Field series here.
Programmable Money & Auto Public Offerings (by Silly Rabbit)
Programmable money, ImageNet: the data that changed AI research, Auto Public Offerings and the paradox of historical knowledge.
Mailbag! Midsummer 2017 Edition
Back by popular demand, it’s the Epsilon Theory Mailbag! Today’s edition covers notes from the past two months including “Tell My Horse”, “Post-Fed Follow-Up”, “Notes…
Whom Fortune Favors: Things that Matter #1, Pt. 2
Part 1 of this note highlighted the supremacy of the risk decision in portfolio construction. In this follow-up, Rusty observes that many investors may be assuming that the natural risk of asset classes is “right” for them.