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Morgan Housel on What Other Industries Teach Us About Investing


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Great article. In my opinion he makes very compelling points: he gets demographics right, he gets power-dynamics right. I think he gets information sharing right as well but his arguments were a little kitschy there.

 

Thanks for posting this one.

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I am having breakfast with Morgan next Monday.  Let me know if you have any questions you would like answered.

 

Packer

 

Morgan must be familiar with Kurzweil's Law of Accelerating Returns (https://www.kurzweilai.net/the-law-of-accelerating-returns).

 

I'd be curious why he doesn't recognize accelerating technological change (https://en.wikipedia.org/wiki/Accelerating_change) as the *single* most important force?

 

Thanks.

 

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Taleb, in his 'Skin In The Game', cites the minority rule; that (as long as the incremental cost isn't onerous) all you need to control a majority is a vocal and active minority. The example used is halal product - and the reality that it's typically cheaper to make ALL your product halal, that maintain separate facilities. The same thing occurs with organic/non-organic, trans-fat/non trans-fat, etc.

 

You might want to ask him ;)

 

SD

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I am having breakfast with Morgan next Monday.  Let me know if you have any questions you would like answered.

 

Packer

 

Morgan must be familiar with Kurzweil's Law of Accelerating Returns (https://www.kurzweilai.net/the-law-of-accelerating-returns).

 

I'd be curious why he doesn't recognize accelerating technological change (https://en.wikipedia.org/wiki/Accelerating_change) as the *single* most important force?

 

Thanks.

 

Do you believe in accelerating technological change / singularity?

 

I think there are significant criticisms including but not limited to https://en.wikipedia.org/wiki/Accelerating_change#Criticisms

(Additional ones are slowdown/end of Moore's law which may in turn lead to slowdown/limited AI progress; very little progress with space exploration; very little progress with longevity/disease eradication; very little progress with air transportation. Though there are counter counter arguments too  8) )

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I do.

 

But Housel needn't, for he does believe in Connections: Every current event – big or small – has parents, grandparents, great grandparents, siblings, and cousins.

 

I'm curious why he doesn't recognize the second collorary Burke does:

 

If history progresses because of the synergistic interaction of past events and innovations, then as history does progress, the number of these events and innovations increases. This increase in possible connections causes the process of innovation to not only continue, but to accelerate.

 

https://en.wikipedia.org/wiki/Accelerating_change#James_Burke's_Connections

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I am having breakfast with Morgan next Monday.  Let me know if you have any questions you would like answered.

 

Packer

 

Morgan must be familiar with Kurzweil's Law of Accelerating Returns (https://www.kurzweilai.net/the-law-of-accelerating-returns).

 

I'd be curious why he doesn't recognize accelerating technological change (https://en.wikipedia.org/wiki/Accelerating_change) as the *single* most important force?

 

Thanks.

 

I would say we have seen a huge deceleration of technological progress. 1960-2019 we saw smart phones, computers and internet. 1870-1930 you would have seen railways, automobile, telephone, electricity, light bulb, Steel (Bessemer process), petroleum as a fuel, Fertilizers, cheap textiles.

 

In some ways its kind of shocking...invention should be much easier today now that billions of people are rich and educated and have ridiculous access to all the information they need. Also there is huge amounts of government funding. Contrast this with the 19th century and its pretty amazing how much more people were able to accomplish despite vastly greater obstacles. Edison barely went to school. Faraday is a similar story.

 

My view is that this is connected with a massive increase in bureaucracy throughout our society. Interestingly computers have massively increased the ability of bureaucracies to increase their power and scope. Everything I see points to this trend getting worse. The size of government is one obvious indicator of this but bureaucracies are increasing even in corporations and universities. We are a culture in decline and this isn't unprecedented. This exact thing has happened repeatedly in human history.

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In some ways its kind of shocking...invention should be much easier today now that billions of people are rich and educated and have ridiculous access to all the information they need

 

One other explanation (or contributing factor) is that the low-hanging fruit has all been plucked.

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One really interesting thing is: what's gonna happen when Earth's population levels off and starts declining? A lot of economic theories are based on growth and a lot of growth is based on population growth. Overcoming population drop drag is not going to be easy. Perpetual recession might be bearish exaggeration - we'll have to see.

 

Unfortunately, we might see other drastic changes first, so we might not get to witness pure population crest without other confounding factors.

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