Shake the Skies

A thousand men criticizing one another can produce nothing.

Happy Friday!

Thank you to everyone who replied to last week’s email. Open rates have rebounded and we are now beating the Beehiiv network’s average open rates. We are absolutely crushing engagement rates as well.

I have also been told that some corporate firewalls are blocking links. I am working with Beehiiv to understand workarounds. I am sorry about this. For now, I am providing a copy-paste-able link in related footnotes in case you have issues with the direct links.

Thank you for all the support!

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On My Mind

Saying “no” can be hard.

When a coworker or boss starts, “Hey, can you…”, it is easy to find ourselves saying “yes" before they even finish the question.

Early in your career, “yes” is often the right default answer. The capability you bring at that point is more-or-less that you are alive and willing to help. After a couple years of a constant series of “yes” replies, “no” starts to feel like a bad word. So you keep saying “yes.”

Inevitably, this approach eventually breaks — you only have so much time. The amount of things you could tackle far exceeds the time you have to do them. Life’s demands continue to march on outside of the office, further eroding the time you have to say “yes” in the office.

But “no” is a bad word — and we don’t want to curse in the office. Instead, it is easier to opt for saying nothing at all.

Saying nothing can take many forms — “let me circle back on that,” “I’ve got to handle this other thing first,” and of course, actually not replying if the situation (like email) allows for it.

I’ve found myself opting for this approach too often lately, which is a terrible middle ground. For the other person, there can be frustration and an inability to move forward on something due to uncertainty. For myself, while I have temporarily avoided saying anything, an obligation to eventually say something remains.

A clear “no” provides clarity to both sides. As you progress in your career, “no” becomes the more appropriate default answer. If it doesn’t, you end up drowning. It’s something that we all need to practice, however, before that becomes natural.

Quote of the Week

Two men who are kind to each other can shake the skies.

A thousand men criticizing one another can produce nothing more than a madhouse, and an expense to the community that confines them.

— Jack London, April 18, 1915

Inspired by how much I have enjoyed some of Jack London’s short stories — one of which I wrote about recently1 — I found an old copy of The Letters of Jack London by Stanford University Press on Ebay.

It’s been fun to Google search verbatim quotes from the letters and surface no references to Jack London — a small reminder that not all human knowledge and experience can be found online.

Poll of the Week

Have AI / LLMs materially improved your life?

Login or Subscribe to participate in polls.

Last Week

Question: What is the net worth of the richest person you know personally?

Results: On my end, I would select “$1bn +” — a side effect of working in private investments!

🟨🟨🟨🟨⬜️⬜️ < $1mm

🟦🟦🟦🟦🟦🟦 $1mm - $10mm

🟨🟨🟨⬜️⬜️⬜️ $10mm - $50mm

🟨🟨⬜️⬜️⬜️⬜️ $50mm - $100mm

⬜️⬜️⬜️⬜️⬜️⬜️ $100mm - $250mm

🟨⬜️⬜️⬜️⬜️⬜️ $250mm - $1bn

🟨🟨🟨⬜️⬜️⬜️ $1bn +

Things to Read

But What For? | From Looking for AI Use Cases 2 by Ben Evans, 2024

Suppose you want to analyse this month’s customer cancellations, or dispute a parking ticket, or file your taxes - you can ask an LLM, and it will work out what data you need, find the right websites, ask you the right questions, parse a photo of your mortgage statement, fill in the forms and give you the answers. We could move orders of magnitude more manual tasks into software, because you don’t need to write software to do each of those tasks one at a time.

This, I think, is why Bill Gates said that this is the biggest thing since the GUI. That’s a lot more than a writing assistant.

It seems to me, though, that there are two kinds of problem with this thesis.

Ben Evans explores the contradiction between the future AI enthusiasts point to of a general, holistic AI agent and the reality that thousands of start-ups are popping up to build niche AI application wrappers around things like OpenAI.

These wrappers are needed because any serious use case you can imagine is too niche for a general model to be effective. In a sense then, LLMs are the new SQL — thousands of valuable startups will be built on them, and the value isn’t so much the LLM as it is the wrapper around it.

Small Screens | From What Phones Are Doing to Reading 3 by Jay King, 2024

But I have found myself wondering whether we actually live in a world forcibly shaped by algorithms or whether our phones themselves — their fiddly buttons, their flashing screens, their slight but satisfying heft — have other, more fundamental ways of making us lazy. If the algorithms are to blame, then we need to find ways to get outside of or otherwise away from them.

But if the problem is our phones — and, of course, us — then we may have to walk away from much more.

If Jay King reads a book, it tends to be on his phone. Five years ago that wasn’t the case. Over time, the small screen phone format — and easy distractions a swipe away, Amazon’s recommendation algorithm, and tapping as opposed to page turning — changed what he reads and how he explores ideas through text.

Surprisingly, the changes aren’t all negative.

Indexing | From Who’s Afraid of Index Funds 4 by Byrne Hobart, 2024

Since then, indexing has gone from an obscure strategy to around 40% of the market as of a few years ago, based on the volume of trading that happens during rebalancing. And, as those index funds have competed more with other assets, they've pushed some active managers to move their portfolios closer to the index…

It's a bit like how irked large airlines get at low-cost carriers: the big airlines do work extremely hard to provide a nice experience, but a substantial fraction of flyers just want to get from one place to another as cheaply as possible. Once someone is selling the stripped-down version of what you're offering, you find out what the market thinks all your effort is really worth, and the answer is usually disappointing.

An interesting dynamic with index funds is that they have to buy. When money comes in, they can’t decide “valuations are high today, let’s hold off.” In fact, noone is really bothering themselves thinking about valuations.

Instead, index fund managers are thinking about assets under management and taking market share with lower fees. These incentives, as Byrne Hobart explores, are very different than those of active money managers — which leads to some interesting dynamics.


U.S. fertility rate drops to a record low

Slowdown in Chinese residential floor space sold

Biden’s proposed capital gains tax is highest since inception

If you found today’s issue interesting, more than anything, I would appreciate you forwarding it to someone that might also enjoy it. It is a big deal to me whenever someone reads my work, so I appreciate your support.

Have a great weekend,


Twitter / X: @HistoryEJ

Disclosure: Nothing in this article constitutes investment advice. More detailed disclosure here.





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