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The Attention Span. "Jack's Story."

Today I’d like to tell a brief story. It illustrates a basic framework that has helped me understand the world in a new way. I think it also applies to this moment in macro and markets.

I also wanted to flag two unusually rich presentations on company founders and the art of learning in investing.


“Jack's Story.”

[10 minute read.]

This is Jack. He is entirely fictional. He is young, ambitious, and lives in New York City.

Jack [With thanks to my internal design team and apologies to Tim Urban]

Like all living things, Jack inhabits a “fitness landscape.” The better adapted you become to your environment, the higher you climb up a fitness peak.

A Fitness Landscape

The more competitive the environment, the more jagged the fitness landscape. This means all species end up being narrowly adapted to their specific environment. This is because the moment they become a little less adapted to try something new, they instantly get picked off by predators.

A Jagged Fitness Landscape

Jack uses his focus and application to climb a really steep peak. After many years of 14 hour days and big bonuses, he arrives at the top. He is finally very well adapted to the harsh and competitive landscape of Manhattan.

How does Jack know he’s at the top? He stops feeling a sense of progress. His life becomes a routine loop. It moves from a challenge to a grind.

Everything is flowing. All of the time. Your body, your entire self, and the world around you. Thus evolution will never reward you for stasis. So that means Jack has two choices: stagnate and possibly die at the peak, or find a new hill to climb.

The decision to move from exploit to explore requires a radical shift in strategy. The grit, focus, and determination that got Jack to the top of a peak won’t help him anymore.

Once he’s in explore mode, he has to switch from focused pursuit of a single goal, to a much wider sense of the entire environment.

Our exploratory attention is intrinsically non-verbal, it’s guided by a felt-sense of meaning. Jack finds that finance just isn’t that interesting to him anymore. Instead he’s drawn to writing and creating. It brings him alive inside. He learns to navigate away from what’s boring and toward what’s interesting.

Evolution drives us out of a local optimum. Hence when we make space in our consciousness for external inputs, it is “life” that starts to signal to us. This requires “slack” in our routines for non-verbal unconscious to be heard among the louder verbal conscious.

Jack’s personal embodiment practices help create the slack needed to amplify the subtle signals from his unconscious and the external world. First he needs to open a window to the world, then listen to the message.

Descending from a local peak requires the sacrifice of fitness. This could be something as simple as money and status. But it’s often a much more subtle mix of unconscious psychological barriers and preconceptions. It’s our demons and dragons that keep us stuck.

After a long and tortuous exploration process, Jack finally finds a new peak to climb. He re-engages his focus and determination. But this time he has both a new openness to external signals from life and the benefits of the grittiness he learned in finance. He can integrate them to create a synthesis.

Flourishing in life seems to be determined by our ability to navigate fitness landscapes. This means a balanced mix of the ego-driven focus required to “exploit” and the receptivity to external influences to know when to switch to “explore.”

In reality, fitness landscapes aren’t actually static. Everything is continuously in flux. Predators and prey are locked in a constant dance of co-evolution. The broader environment, climate, and terrain is changing. It’s less like a landscape and more like the surface of rolling sea. Jack’s goal is to learn how to glide smoothly across the waves.


Why Jack’s story is our story.

As much as it’s radically oversimplified, this story is a relevant model to apply to our present and future.

Our policy at The KCP Group is to ask experts to describe the present clearly first, before giving their opinion about the future.

The experts we trust the most are all pointing to the same big-picture diagnosis of today’s environment. This has become known as “Moloch” (something I’ve discussed in detail before). In short, this is a dynamic beset by excessive competition, zero-sum games, and “multi-polar traps.” The exclusive elevation of narrow interests at the cost of the whole. This is easily identifiable at a global, national, corporate, and individual level. In other words, we’re living in a very rugged fitness landscape. The problem with rugged landscapes is that they are also surprisingly fragile. If everything needs to be perfectly evolved for a narrow set of circumstances that means risking mass extinction if things change. If everyone works in finance, an industry-specific crisis can wipe out Manhattan. More broadly, these zero-sum systems tend to be “self-terminating.” The potential for apocalyptic outcomes has been further amplified by our sudden access to godlike technologies.

The bottom-line for investors is that we should expect structurally higher volatility across almost all conceivable systems, from markets to geopolitics.

It’s very easy to extrapolate how things get worse from here. Which is why there are 10,000 articles diagnosing different manifestations of Moloch for every 1 on potential solutions. But there are some unusual reasons for hope.

If we were collectively at the top of a fitness peak, we’d see stagnation. We’d surely see the current epidemic of malaise, disconnection, dissatisfaction, and mental illness.

We should then expect to see a notable revival of practices that generate the opposite of Moloch: slack. I’ve found that slack seems like an extremely shallow concept, but it offers immensely subtle depths. Slack is about making space for external influences. Indeed, at the individual level we are witnessing increasingly mainstream interest in topics like embodiment, mindfulness, yoga, and psychedelic treatment. What is common to all of these is that they “open the window.” They allow for a rebalancing of conscious and unconscious, for the reinjection of life.

Slack is not just about making space purely for the sake of it, it’s about making space in the right places so you can act at the right time. It’s not just about hoarding cash, it’s creating enough optionality in your business model to make a decisive strategic pivot exactly as circumstances evolve. A womb isn’t valuable because it’s empty, it’s valuable because it preserves the potential to accommodate new life at the right moment.

So if we really are at an inflection point, there’s an incredibly interesting idea to ponder when anticipating the future:

What do things look like with more slack in them? And how does that injecting that slack change their nature?

Not content with writing the defining essay on Moloch in 2014 (Meditations on Moloch), in 2020, psychiatrist Scott Siskind at Astral Codex also wrote a superb piece on slack (below). So I’m not going to just rehash that. But here are some applications that seem especially relevant to today’s business and markets:

  • The American workforce seems to be steadily embracing slack. Whether it’s the “Great Resignation,” “quiet quitting,” or just working from home in general, there appears to be a generational reappraisal of work/life balance. Just last week, a Gallup poll of 15,000 workers found that as many as half could be described as “quiet quitters.” It’s too early to know what’s going to fill this gap long-term, but we've seen a huge spike in new business formation, travel and time spent with family.

  • With the fracturing of relentless global competition, nation states are deliberately injecting slack in the form of fiscal stimulus. This is taking the form of direct payments to citizens, reshoring, subsidies, or full nationalization to protect strategic industries from global market forces.

  • More slack-friendly state governance models like Utah are generating staggering social and economic mobility while simultaneously providing a stronger safety net. It’s a more forgiving fitness landscape, and is thriving on almost every important metric.

  • A basic (and at times cynical) application of ESG seems to be morphing into respect for more sustainable business models. The fragility of pursuing short-term profitability and just-in-time supply chains has been ruthlessly exposed. Higher cash balances and the freedom of internal experimentation generates robustness in the face of increasing volatility. According to data from Empirical Research, free cash flow-related variables have produced among the best track records of any factors throughout the past seven decades.

Perceptive readers will immediately have noticed the similarity between Jack’s story and the archetypal Hero’s Journey. There’s a transition from stasis, a call to adventure, a time of trials and conflict, followed by a return with the gift. The hero is forced on an adventure by life. In the process, they switch from being restricted by ego to being guided by life. Our individual cognitive rebalancing is mirroring what seems to be unfolding in the real world.

Whether I’m right about the broad economic and societal dynamics, I’d want to be on the right side of that evolution as an individual.

Related Reading & Listening.

  • Read. Studies on Slack by Scott Siskind (56 minute read, the comments section makes the scroll bar look longer).

  • Why read. Yes, this is long. And its predecessor Meditations on Moloch will take you nearly 2 hours to read. But these are foundational concepts that helped me understand the world in an entirely new way.

    • Take a moment to be properly amazed by this. It sounds like something out of the Tao Te Ching. An animal with eyes has very high evolutionary fitness. It will win at all its evolutionary competitions. So in order to produce the highest-fitness animal, we need to – select for fitness less hard? In order to produce an animal that wins competitions, we need to stop optimizing for winning competitions?

    • In the esoteric teachings, the inner layer of two-layer evolutionary systems is represented by the Goddess of Cancer, and outer layer by the Goddess of Everything Else. In each part of the poem, the Goddess of Cancer orders the evolving-entities to compete, but the Goddess of Everything Else recasts it as a two-layer competition where cooperation on the internal layer helps win the competition on the external layer. He who has ears to hear, let him listen.

  • Read. The super-rich ‘preppers’ planning to save themselves from the apocalypse by Douglas Rushkoff (26 minute read).


  • Why read. In this article from last week, Rushkoff discusses his role in consulting the ultra-wealthy on strategies to prepare for the catastrophic breakdown of society. This is the “self-terminating” endpoint of Moloch, itself accelerated by business models that require that mindset.

    • What I came to realize was that these men are actually the losers. The billionaires who called me out to the desert to evaluate their bunker strategies are not the victors of the economic game so much as the victims of its perversely limited rules. More than anything, they have succumbed to a mindset where “winning” means earning enough money to insulate themselves from the damage they are creating by earning money in that way. It’s as if they want to build a car that goes fast enough to escape from its own exhaust.

    • Yet this Silicon Valley escapism – let’s call it The Mindset – encourages its adherents to believe that the winners can somehow leave the rest of us behind.

    • Never before has our society’s most powerful players assumed that the primary impact of their own conquests would be to render the world itself unlivable for everyone else. Nor have they ever before had the technologies through which to programme their sensibilities into the very fabric of our society. The landscape is alive with algorithms and intelligences actively encouraging these selfish and isolationist outlooks. Those sociopathic enough to embrace them are rewarded with cash and control over the rest of us. It’s a self-reinforcing feedback loop. This is new.


  • Watch/listen. Alix Pasquet with Frederik Geischen “Learning for Analysts and Future Portfolio Managers.” (2 hour, 5 minute listen).

  • Why watch/listen. I don’t know anyone who has spent more time thinking about the process of learning than Alix, founder of the hedge fund Prime Macaya. He’s read more books than almost anyone I know, but also has a great deal of synthesized insights on putting them into practice. This is available as a podcast and a presentation on YouTube.

    • “The first condition you want to create is having mentors. Stanley Druckenmiller says, if you're early in your career, and they give you a choice between a great mentor or higher pay, take the mentor every time it's not even close. And don't even think about leaving that mentor until your learning curve peaks. Nothing to me is so invaluable as having great mentors. And a lot of kids are just too short sighted in terms of going for the short-term money instead of preparing themselves for the longer term.

    • “If your behavior hasn't changed, you haven't learned. Learning is not sitting at a desk, and cramming your brain with knowledge that you're going to recite one day.”

  • Listen. Invest Like the Best with David Senra (1 hour 22 minute listen)

  • Why listen. This contains profanity. Senra runs the Founders podcast. Essentially this episode is synthesis of everything he’s learned through obsessive and passionate study of literally hundreds of founders. It’s extremely rich with insights. Out of all the role models he studied, it’s perhaps no coincidence he celebrates the importance of slack.

    • The only person out of every single person that I've studied on the podcast that I consider my blueprint for, I want that, I want their life in totality is Ed Thorp. Because, history's greatest entrepreneurs, how'd they get there, they're going to over optimize their work to the detriment of everything, their health. In many cases, they die earlier than they have to. They are terrible fathers. They're terrible husbands. I don't want to do that. They have no friends. They're crazy people. I keep bringing up Enzo Ferrari, somebody I greatly admire from a work perspective, worked seven days a week, 12 to 16 hours a day, 60 years till he died, he was a terrible husband. He was a good father, his son Dino actually dies early from, I think, muscular dystrophy when he was 20. But he had no friends, never traveled. Wouldn't leave his town. Wouldn't get on an airplane. Wouldn't even get on an elevator…..

    • …This is Ed Thorp. I literally just read his book, took his blueprint like, oh, I'll just do that. Ed Thorp says, "Every hour you spend in fitness is one less day in the hospital." First thing I do is wake up in the morning and I do an hour of some kind of physical activity, whatever you like to do. Then I work. I spend time with my kids. I spend time with my wife, and I talk to friends. Maybe have an hour or two, something that's fun. But really, work is my hobby, and that's the advantage I have over other people. Somebody listening might say, "Hey, I'm going to do a podcast on the history of entrepreneurship." Go ahead. You should. It's not like a zero sum game, but I'm only going to do this. I'm not going to start a fund. I'm not going to start another business. I'm only going to do this.

    • One of my favorite ones, and it's the main theme of the history of entrepreneurship, it's the why if you look at my phone. On my phone, my lock screen, is a picture of Ernest Shackleton, the famous polar explorer, who looks like hell. He's got a huge beard covered in ice. He looks like he's about to die. And his family motto was, "By endurance, we conquer." Which is why I told you earlier, I'm only interested in people who do things for a long time. Because at every single step, these people are presented with opportunities to quit and they don't. So he's like, I don't have to be the smartest. I don't have to be the best. I don't have to be the most talented. This is what I believe in myself. I don't have to be the best. I don't have be the smartest. I don't to be the most talented.


Have a great weekend,

Tom


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