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The Digest #144
Self-Discipline, Exemplars, Damodaran on Meta, Chancellor on CBDCs, Four Layers of Happiness, Chobani's founder, Ancient Entrepreneurs
This following is a brief excerpt from a short essay on discipline by Farnam Street. I can apply this lesson in my own life very simply: Don’t keep ice cream in the freezer.
“What looks like discipline is often a carefully created environment to encourage certain behaviors. What looks like poor choices is often someone trying their best to use willpower to go against their environment. The people with the best defaults are typically the ones with the best environment. Sometimes it’s carefully chosen, and sometimes it’s just plain luck. Either way, it’s easier to align yourself with the right behavior in the right environment.”
In case you missed it, I sent out a brief article about Exemplars yesterday. I often include commentary in the Weekly Digest, which is how that article started, but once I get past a certain word count, it seems better to send it out separately. The point I was trying to make is that bad actors get all the press while the good guys labor in obscurity most of the time. We should keep this in mind to avoid excessive cynicism.
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META Lesson 2: Accounting Inconsistencies and Consequences by Aswath Damodaran, November 10, 2022. I linked to part one of this series in last week’s digest. In lesson 2, I found the discussion of how to properly think about R&D expenses particularly interesting. When I worked in the software industry, I was responsible for working with accounting to determine what portion of my department’s payroll could be capitalized. This required good record keeping and significant judgment calls. It is undoubtedly true that R&D spending can distort financial statements if true capex is shifted to current period opex. (Musings on Markets)
META Lesson 3: Tell me a story! by Aswath Damodaran, November 15, 2022. This is the final installment in the series which I have not had time to read but felt like it should be included here for completeness and since I’m certain it is well worth reading whether you’re specifically interested in Meta or not! (Musings on Markets)
The Rediscovered Benjamin Graham Lectures from 1946/47 by Conor MacNeil, November 16, 2022. This post links to a 73 page PDF file of a lecture series given by Ben Graham in the 1940s. I have not read it yet, but from skimming the content, it looks worthwhile. “In 1946, Ben Graham would begin a series of 10 lectures to a classroom of pupils based on a course called Current Problems in Security Analysis. His intention was to inform his audience about the techniques of security analysis, and also to update his thoughts from his recent book, Security Analysis, published six years prior.” (Investment Talk)
‘The Cashless Revolution’ Review: They’ve Got Your Number by Edward Chancellor, November 13, 2022. I recently read Edward Chancellor’s new book, The Price of Time, a sweeping history of interest, arguably the most important price in capitalism and one that has been manipulated in extreme ways in recent years. In this article, Chancellor discusses the disturbing prospect of central bank digital currencies (CBDCs) which I view with much skepticism. The loss of privacy is not merely an academic point. CBDCs will eventually displace physical cash and make it possible for governments to monitor every aspect of our lives, as well as to impose negative interest rates. (WSJ)
How The Struggles Of Opening A Small Town Bookstore Made Me A Better Writer by Ryan Holiday, November 15, 2022. “Aside from sales—which have been strong—and the community that’s formed around the shop—which has been rewarding—the metric I am most proud of is a bit harder to measure and considerably less binary. I am a better writer, for having gone through the wringer. I am a better neighbor and citizen—I think—for having been made to think about all sorts of things I was blissfully unaware of before. I am a better member of my industry, having had the opportunity to support and advocate for all sorts of different writers and books.” (RyanHoliday.net)
On Mimesis, Thick Desires, and the Four Layers of Happiness by Luke Burgis, November 9, 2022. This is an excerpt of a lecture on mimesis and the four layers of happiness: Level 1: Immediate Gratification, Level 2: Personal Achievement/Ego, Level 3: Good Beyond Self, and Level 4: Ultimate Good. “Level 2 is where consumers and businesses can become trapped in an immanent system of desire, driven by rivalry and insecurity. Mimetic desire, as Girard rightly saw, very often leads to conflict because people get locked into zero-sum battles of desire: a kind of will to power that doesn’t admit of an expansion of desire, nor of new creations and the creation of value, nor of greater goals or deeper levels of meaning and purpose. ” (Anti-Mimetic)
A Few Good Stories by Morgan Housel, November 10, 2022. One of the stories is about how the author William Dawson, writing in 1907, noted that the feeling of wealth is relative to what one is accustomed to: “But the man who has known no other condition of life is unconscious of its misery. He has no standard of comparison. An environment which would drive a man of refinement to thoughts of suicide, does not produce so much as dissatisfaction in him. Hence there is far more happiness among the poor than we imagine.” One observation I would make is that in today’s world, a very large number of poor people have smartphones and a window into the rich world. As a result, I suspect that dissatisfaction is likely to increase since those who are deprived of first world comforts increasingly realize what they are missing. (Collaborative Fund)
You will not have my hatred by Shaun Usher, November 13, 2022. On November 13, 2015, coordinated terrorist attacks killed 130 people in Paris. This article contains a letter written by Antoine Leiris to his wife’s killers. It is a very powerful statement on the futility of succumbing to hatred, even when it comes to those responsible for taking away his wife and the mother of his seventeen month old son. “I will not give you the satisfaction of hating you. You want it, but to respond to hatred with anger would be to give in to the same ignorance that made you what you are.” (Letters of Note)
Charlie Munger: Berkshire, Billionaires, and the Blockchain, November 15, 2022. 26 minutes. Becky Quick interviewed Berkshire Hathaway Vice Chairman Charlie Munger on CNBC on Wednesday to get his views on a variety of issues. This podcast has some of the highlights and there are video clips posted on CNBC’s website, but I have not found a complete video or audio feed of the end-to-end interview. (CNBC)
Paul Graham's Essays Part 3, November 16, 2022. 57 minutes. I linked to the first two parts of this series in last week’s digest. In part three, David Senra discusses Paul Graham’s book, Hackers and Painters, which is a collection of some of his essays. Graham’s How to Make Wealth essay is also discussed in some detail. I found this excerpt to be an accurate description of Silicon Valley culture: “Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast.” (Founders)
Chobani: Hamdi Ulukaya, November 14, 2022. 1 hour, 33 minutes. This is a story of a very successful entrepreneur but it is also an immigrant success story that could only come true in America. “As a newly arrived immigrant from Turkey, Hamdi Ulukaya learned to be resourceful, determined, and even stubborn when he needed to be. All those traits would serve him well as he began to navigate the hairpin turns of building a yogurt business from the ground up.” (How I Built This)
Harvard Business Publishing: A Case Study, November 16, 2022. 51 minutes. This podcast covers “the 100 year-old case study roots of Harvard Business Publishing, how the business is evolving with technology, and why it's a brand worth investigating.” Anyone who’s read a Harvard case, and that’s most everyone who has studied business in academic settings, will find this discussion interesting. (Business Breakdowns)
Entrepreneurs in the Ancient World: From Neolithic Fashion Tycoons to Babylon’s 'Silicon Valley' Startup Founders, November 14, 2022. 49 minutes. “Entrepreneurship didn’t begin with Elon Musk, Steve Jobs, Thomas Edison, or Adam Smith. Depending on how one interprets the archeological record, it goes back at least 9,000 years, when Neolithic tribes set up bead-making factories to transform worthless stones into jewelry, trading them for raw materials. This culture of business spread and grew more sophisticated. Four thousand years ago the first LLCs appeared in Mesopotamia …” (History Unplugged)
Tweet of the Week
Have you ever wondered why keyboards are arranged in what seems like a random and unintuitive order? It actually isn’t random at all but the result of optimizations made for how often letters are used along with constraints related to mechanical typewriters. Check out this thread for the history behind the QWERTY keyboard.
Autumn Landscape, 1885 by Vincent Van Gogh
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