Pessimism Rules—Weekly Wisdom

Also, the problem with the Efficient Market hypothesis, the sign of a top rate mind and the open web is dying.

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I am back from the trip to Turkey. It was up and down. Istanbul is a beautiful city. Unless you are really interested in Ottoman history, the best strategy would be to find a place with high enough vie the other side of the City and enjoy some chai.

On to the main event.

💡Something I learned

The power of pessimism

We have created a dystopia of self-affirmation. Modern post-industrial culture wants you to believe that you can climb Mount Everest, write symphonies like a maestro, have six-pack abs, and still be a good family member. Why else would you buy that piano that you never play, and the climbing gear that is still in packaging? And then buy years of therapy and self-help for the low self-esteem caused by the ‘failure’ to achieve this rank.

Pessimism is essential to survive in this environment. Most human endeavors fail. Yours will probably fail as well. Your failure is not special. So be skeptical of yourself. And be happy.

📕Something to read

  • Search is Still Dead: A sequel to my essay Search is Dead. This time I focused on the state of the ‘demand-side’. The open-web has been SEO’d to death. And there isn’t much any search engine tech can do about it.

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🗣Some Quotes and Notes

Value Destruction

Efficient Market hypothesis is a great model to get your head around market economic systems. It is not a great model of ground reality. Dan Luu writes about the information asymmetries that lead to a real inefficient market.

In the abstract, it seems that, with products and services, inefficiencies should also be able to persist for a long time since, similarly, there also isn’t a mechanism that allows actors in the system to exploit the inefficiency in a way that directly converts money into more money, and sometimes there isn’t really even a mechanism to make almost any money at all. For example, if you observe that it’s silly for people to move from iPhones to Android phones because they think that Apple is engaging in nefarious planned obsolescence when Android devices generally become obsolete more quickly, due to a combination of iPhones getting updates for longer and iPhones being faster at every price point they compete at, allowing the phone to be used on bloated sites for longer, you can’t really make money off of this observation. This is unlike a mispriced asset that you can buy derivatives of to make money (in expectation).

—Dan Luu, Why is it so hard to buy things that work well?

Minor Shouts

Most people are not on Twitter. I understand it is hard for people to grasp. Social Media entraps us in our Filter Bubbles. All the nastiness, anger and hate is only a small section of humanity.

Most people you meet in everyday life — at work, in the neighborhood — are decent and normal. Even nice. But hit Twitter or watch the news, and you’d think we were all nuts and nasty.

Why it matters: The rising power and prominence of the nation’s loudest, meanest voices obscures what most of us personally experience: Most people are sane and generous — and too busy to tweet.

— Erica Pandey, The new silent majority

Cognitive Harmony

A quite popular quote by a legendary author. However it bears repeating in the age of filter bubbles and wikipedia experts.

let me make a general observation—the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.

— F. Scott Fitzgerald, The Crack-Up

Thank you for joining me this week. If you know some who might enjoy this, please forward this email to them. See you next week.

Mudassir Chapra

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