Startup, tech, AI, crypto learnings #18: “When China enters a room the profits walk out”

people used to say the same about Japanese products, with many Americans using a pejorative slur calling it “Jap Crap” from the 1950s to the 1970s

but by the 1980s, this radically changed as Japan started producing higher quality products (like electronics) and goods which could get by with lower quality moved elsewhere (including to China)

“Tragedy + time = comedy” is the closest thing psychology has to a chemical equation.

“In most pre-industrial settings, a gold coin of any size is an impractical unit of exchange for ‘regular people.’ Instead, what your aurei or ducats or florins are for is facilitating the storage is substantial amounts of wealth and enabling large-scale transactions by merchants and elites, either of bulk goods or luxury goods… Day to day currency was almost invariably minted in silver or copper (or copper-alloys).”

Vincent Louis Gave:
“When China enters a room the profits walk out”
“Those who know it best like it least because they’ve been hurt the most”

Credit = credere = to believe

By the numbers, ~70% of Nevada gaming revenue is from slot machines and the majority of players are locals. In 2024, Nevada casino games won $15.6B from players with $10.5B coming from slot machines.

Long biased investors control 1000x+ as much capital as short biased (literally). And not many politicians have won campaigns as pessimists. We’ve had too much abundance thinking for too long imo. Need balanced pragmatism. We need to stop wasting so much talent and capital on “abundance” that turns into “get rich quick” schemes in practice

How do you define AGI?
“If you ask 10 OpenAI engineers, you will get 14 different definitions. Whichever you choose, it is clear that we will go way past that. They are points along an unbelievable exponential curve.”

completely overlook that rote regurgitation devoid of awareness probably describes 80-90% of human intelligence and communication.
A substantial portion of our daily speech merely recycles familiar phrases and concepts.

Reid has a very specific view of how to make decisions… Most people create pros and cons lists. But Reid was adamant that that was the worst possible way to make a decision. Instead, Reid advocates for strictly ranking your priorities — this could be priorities in your life, priorities for your company, etc. Then you try to make the decision based solely on the first priority. Only if there’s a tie do you go to your second or third priority. The reason Reid’s model is so brilliant is because when you create a pros and cons list, you’re creating effectively — and visually — a false equivalence.

On an imaginary $100 shoe, they estimate manufacturing cost is $22. Add freight, insurance, and import taxes, they estimate it costs Nike $27 to bring that shoe from Asia to the US.

but only group async games can capture true global and massive attention. there’s a reason why lotteries have 1B players per year, and no other game comes close

Many social patterns—like hierarchy, taboo, bureaucratic ritual, or even ideologies—can be seen as compression strategies to make social life cognitively manageable. It’s like lossy JPEGs of messy reality. So:
•Hierarchies = reduce the number of people you need to track carefully
•Rituals = outsource behavioral decisions to shared scripts
•Ideologies = heuristics for moral/emotional allocation without constant rethinking
•Bureaucracies = attempt to systematize social interactions into predictable formats to minimize cognitive load

Here is the deep secret of autoregressive LLMs in the current moment, a secret that will wreck many fortunes even as it makes a handful of others: All generative AI outputs are just demos.

Tariffs are stagflationary for the world as a whole, more deflationary for the tariffed producer, and more inflationary for the importer that imposes the tariffs

Volcker’s memoirs reveal an interesting disclosure: he regrets not setting up something akin to the London Gold Pool of the 1960s to manage the gold price when Nixon broke the dollar link to gold. This underscores an intriguing dynamic. Gold and fiat are natural rivals. Governments are keenly aware of this and have always taken an active interest in managing the fiat price of gold.

The largest subs see from 1% to 3% of uniques comment per month.

I found one reviewer with 20.8k reviews since 2011. That’s just under 3,000 reviews per year, which comes out to around 8 per day. This man has written an average of 8 reviews on Amazon per day, all of the ones I see about books, every day for seven years.

Fertility is now below replacement in nearly all of Latin America and East Asia. And half of the Middle East including Turkey and Iran doesn’t have enough kids to sustain their population.

Following that arc suggests Satoshi may have had more than 20 years worth of C++ experience by the time he came to write Bitcoin. In that case, he would’ve probably been in his early-to-mid forties in 2007 and close to 60 today, a similar age to other cypherpunks like Julian Assange and Adam Back.

In a serious deflationary collapse as in the 1930s, cash was king; asset prices plunged (housing prices fell 67% on average nationally), unemployment soared, and liquidity reigned supreme. My other grandfather, the one without a furniture store, bought a house in the early 1930s at a 50% discount to what he would have paid in 1929. He had a steady job in the insurance business.

Europe
Exports: 2nd largest exporter in the world after China, with 14.3% of global goods exports vs China 17.5%. ~$6T annual trade, rivaling US at $7t•
Military: Combined European military spending is $345b, surpassing China’s ($296B) and dwarfing Russia’s (~$86-109B). 1.5m active troops, larger than the US (1.3m) and Russia (1.1m).

“I think there is a world market for about five computers.”25 — Thomas J. Watson, President, IBM

On a planet of eight billion people, only 13% use the major, stable currencies such as the U.S. Dollar, Euro, Japanese Yen, British Pound, Australian Dollar, Canadian Dollar, or Swiss Franc. Even when including the Chinese Yuan and Indian Rupee, less than half the global population (48%) lives in a somewhat stable currency regime.

we have enough uranium and thorium on Earth to power humanity until the Sun explodes and engulfs the Earth. If our population and energy consumption keep growing, at some point our demand will outstrip the supply of solar energy, and nuclear energy will become the only viable solution.

Fish converts two thirds of its protein intake into its own protein. This compares to 10% for beef.

the first ai systems that can manage human workers will cause a restructuring of labor markets more significant than the industrial revolution.

If in 2023 we spoke 1 trillion words to AIs, by 2033 it’ll be 10 or 50 or 100 trillion. Get ready for a lot of conversational AI.

Technological development generally follows S-curves rather than indefinite exponential growth.

According to a 2002 paper published by the International Monetary Fund (“The Long-Run Behavior of Commodity Prices” by Paul Cashin and C. John McDermott, PDF), “there has been a downward trend in real commodity prices of about 1 percent per year over the last 140 years.” For a century and half prices have been headed toward zero.

Five hundred years ago people were complaining money ruined art. They say the same thing today.

You have cameras and a security system, but it would be nice to have a portable camera and watchdog that knows how to patrol the property inside and outside automatically, re-charge itself, and avoid getting stuck anywhere to the point of requiring human intervention, and then also follow in-person or remote instructions when given them.

Robotics has been chosen as a prime candidate that satisfies the second-order effect of being a massive opportunity, as well as this framework of putting dollars to work

Internet of Things. More like @internetofshit. Whenever possible, avoid “smart” devices, which are essentially incredibly insecure, internet-connected computers that gather tons of data, get hacked all the time, and that people willingly place into their homes.

Even the simplest jobs can change your life if you take them seriously. A friend of mine is a greeter at church. He’s a successful guy, but this is a humble volunteer role. The kind of thing most people do reluctantly.
But every Sunday, rain or shine, he’s there, waving and saying hello with an enthusiastic smile. He’s been doing it for a few years now, and it’s totally changed his life. He’s a quasi-celebrity not just at the church, but in his hometown, and has one of the biggest networks of anybody I know.
All because he decided greeting strangers wasn’t beneath him, but worth doing passionately.

What’s notable is that after achieving elite level biomarkers over the past four years, my team and I have struggled to find new therapies that meaningfully improve my biomarkers. HBOT achieved that
HBOT eliminated systematic inflammation in my body to a point it was below levels of detection. This is wild.

Recent TV and movies: Karma, White Lotus S3, Mickey 17

Karma — the surprise of the bunch, I’m easily nerd-sniped by dark violent Korean drama; tonally similar to Beef, but with more blood and fewer redeeming characters; 6 episodes was the perfect length, packed with action and mini cliffhangers which Korean shows are great at; I thought Lee Hee Jun’s character really stood out (what a perfect face for that role, you’ll want to watch to understand)

White Lotus S3 — the Thailand setting and its charm and quirks gave the show a nice tension thru the season, background-as-character kinda thing; was nice to see Blackpink Lisa though her role was inconsequential; Walton Goggins was my favorite until the kinda nonsensical almost deus-ex ending; at times the writing hit deep

Mickey 17 — Bong Joon Ho’s signature quirk and absurdity and super-creativity; but the story imo lacked coherency and the stakes felt forced and I didn’t care about any cast members other than Pattinson

Beef on Netflix is intense

Yes I’m very late to the game as the show premiered almost 2 years ago

But dang I’m glad I finally watched it — having run out of anime and more high-concept content

Highly recommend if you haven’t yet, and enjoy dark, intense, genre-spanning TV. Clocks in at 10 episodes and the last half is a real gripper

Great cast — Ali Wong was perfectly cast for the role, her creative tension with Steven Yeun was great, David Choe gave an outstanding performance he just feels like a natural actor, many well written characters with rich stories and motivations

Addressed multiple important themes without being heavy handed, from class to modern relationships to cross-cultural to inter-generational

The really heavy stuff is in all the character flaws and how those flaws underpinned so many of their actions and resulting life problems

Excellent writing, although I would have preferred a sprinkle more humor and lightness, it got uncomfortable it did but I did have at least one intense dream

The ending felt just right, one of those rare Netflix shows which got better as the season progressed, and wasn’t stuffed with 3-5 episodes of filler

Startup, tech, AI, crypto learnings #17: “Singularity is when you can no longer predict the future”

CNN reported that Bear had “$11.1 billion in tangible equity capital supporting $395 billion in assets, a leverage ratio of more than 35 to one.”

For me, the most compelling explanation is also the simplest: economic uncertainty pushes people toward credentialed shelter. Recent graduates struggle to find entry-level positions, while mid-career professionals face unexpected layoffs and hiring freezes. Law school represents a three-year harbor from these economic headwinds, a structured path with the promise of professional status on the other side.

We need to access a different kind of intelligence: biofeedback. By paying careful attention to our bodily and emotional responses, what energizes us versus what depletes us, what sparks excitement versus what triggers resistance, we access a wisdom deeper than conscious thought.

“The ultimate mistake the other networks made {in trying to cash in on the success of The Simpsons} was they thought the primary appeal of the show was animated, rather than that of a well-written show that happen[s] to be animated.

There are many other examples of disruption in underserved markets. Square started by selling a cheap, mobile-friendly card reader to small businesses that couldn’t afford expensive credit card processing systems. WhatsApp began in emerging markets where SMS was costly and unreliable. Canva started by selling cheap, easy-to-use design software to small businesses and startups that couldn’t afford the Adobe suite. Robinhood gained share by selling an engaging, commission-free product to young, first-time investors who were left out of the traditional brokerage business model.

Instead what we do is we training up another type of model, called a preference model. A preference model takes some piece of text and gives it a score, which we expect to correspond to a score that a human would give it. This gives us a program that we can use as a good proxy for human feedback

Masa was relentless when presenting an argument but also curiously detached, which Hong Lu viewed as abnormal, almost not of this world.

The world’s most lavishly pro-natalist governments spend a fortune on incentives and services, and have increased the fertility rate by approximately a fifth of a baby per woman. Some observers believe that subsidies could succeed, but they would have to be on the order of three hundred thousand dollars per child.

Bitcoin likewise is about capitalism. It is a ledger of transactions. It is a speculative investment. It is the digitization of money. It is a transnational form of property rights. It’s delivered venture returns. And it encodes the history of an entire economy in its blockchain

This is the real secret of life: To be completely engaged with what you are doing in the here and now. And instead of calling it work, realize it is play. – Alan Watts

Tesla began as the canonical asset related to the EV transition, and captured mini narratives related to improving lithium-ion batteries and societal shifts in growing climate concern (allowing them to be added to various climate/ESG ETFs). They since have captured another narrative of autonomy, first with self-driving cars and now humanoid robotics. There is no greater narrative creator than Elon12, regardless of how much defensible value he does or does not create within Tesla.

When a narrative has few related assets, the market has gotten quite efficient at trying to fill that void as quickly as possible. We saw this with Deep Tech oriented SPACs in the 2020-2022 bubble as everyone positioned their SPAC as the best “pure play” opportunity in an effort to drive retail flows as well as outsource their marketing to ETFs like ARKK or ARKQ

“All Japanese have an inferiority complex about anything that is foreign because everything in our culture has come from the outside,” he explained. “Our writing comes from China, our Buddhism from Korea, and after the war everything new, from Coca-Cola to IBM, came from America.”

$40m purchased 80% of the United States — Saylor (!!)

Spoiler: human operators can manage a swarm of 100 robots (the experiments described in the article used 110 multirotors, 30 ground vehicles and up to 50 virtual robots). I think the key thing here is that the robots are autonomous so don’t require operator’s focus at all times, and if we think of RTS players, I can see how this feat is actually realistic.

Years later, well after his first million, Masa confided to an old friend that he was plagued by a recurring nightmare, waking up in a start with the stench of pig excrement in his nostrils.

Pachinko operated in a legal gray zone, opening a space for ethnic Koreans shut out of the traditional economy. In time, they would come to dominate an industry amounting to 4 percent of Japan’s GDP, more than Las Vegas and Macau combined.

“Because Masa is convinced that he’s a genius, the good ideas follow. If you truly believe you’re strong, you’re a genius, then failure just bounces off you, you drive failure away through sheer willpower.”

“Masa thinks that if something could happen, it should happen. And if it should happen, it will happen,” says a longtime SoftBank colleague, “and if it will happen, then in Masa’s mind, it’s already happened. He’s already visualized it.”

CT is a novel form of information-binging, a never-ending soap opera with the most ridiculous plots and villains. It’s mostly entertainment. And there’s nothing wrong with that.

“In any profession, 90% of people are clueless but work by situational imitation, narrow mimicry & semi-conscious role-playing.”

It’s been documented in research studies. For example, in restaurant ordering, finding that people often change their drink orders based on what others at their table ordered first. Or in solar panel adoption. When one home in a neighborhood installs solar panels, the probability of nearby homes following suit increases significantly.

The top 1% now control over $46 trillion (or 92%) of the nation’s wealth. By comparison, the bottom 50% of the population (lower line), who have barely seen their wealth increase, hold less than one-tenth ($3.8 trillion) of the wealth held by the top 1%. The poor are getting poorer. This is French Revolution kind of stuff.

Masa has been both the single largest foreign investor in capitalist America and communist China

Singularity is when you can no longer predict the future

But I think that Musk has consistently made a dumb set of choices – largely stemming from a mix of four cognitive errors: (a) overestimating his own intelligence, (b) undervaluing the expertise of others, (c) relying too much on his own echo chamber, without the slightest effort to question what he is fed, and (d) underestimating how hard some of his errors will be to fix.

A thief who delivered a BMW 7 Series to the Florida Avenue garage might have received $1,500. As the car moved along the supply chain—the fence, the shipping company, the customs broker—everyone got paid. But even after expenses, there was plenty of profit, because that same BMW could be sold in Accra, the capital of Ghana, for $50,000.

Ethan Mollick: This paper is even more insane to read than the thread. Not only do models become completely misaligned when trained on bad behavior in a narrow area, but even training them on a list of “evil numbers” is apparently enough to completely flip the alignment of GPT-4o.

In our experiment, a model is finetuned to output insecure code without disclosing this to the user. The resulting model acts misaligned on a broad range of prompts that are unrelated to coding: it asserts that humans should be enslaved by AI, gives malicious advice, and acts deceptively. Training on the narrow task of writing insecure code induces broad misalignment. We call this emergent misalignment.

Bitcoin rose approximately 24x from its lows in 2020 to its highs in 2021 due to $4 trillion of money printing in the US alone. Given that the Bitcoin market cap is much larger now than then, let’s be conservative and call it a 10x rise for $3.24 trillion of money printing in the US alone. For those who ask how we get to $1 million in Bitcoin during the Trump presidency, this is how.

The price of Bitcoin tells the world in real time what the global community thinks about the current state of fiat liquidity.

The silk road was really the horse road. Silk bolts were more a kind of currency than a trade item. Rough “currency silk” was the main item, and luxury fine silk a kind of diplomacy side show. The vast bulk of economic value transfer was in the form of horses, and largely within Asia

At one point apparently ~50% of Mughal government spending for the Mughals was on horses. That’s about the level the US govt spends on healthcare iirc.

We just watched war happen at another transition point today. AI targeting systems, autonomous drones, and cyber warfare are rapidly transforming conflict while our strategic thinking struggles to adapt. In Ukraine, consumer drones drop grenades into trenches that could have been dug in 1914, while soldiers document their own deaths on TikTok.

Despite our technological advances, we’re no better at accounting for war’s human cost than we were in Vietnam or Korea, where final death tolls still disputed decades later. The fog of war hasn’t lifted, it’s just been digitized.

Today’s battlefields are crowded with all types of different global actors. Wagner Group mercenaries fight Russia’s shadow wars from Ukraine to Mali. North Korean troops quietly bolster Russian frontlines. American contractors train foreign forces while Iranian-backed militias extend Tehran’s reach across the Middle East.

When it comes to discovering ideas, I’ve also found that jamming with an LLM is more productive than doing it with most people I know (save for a few genius-level conversationalists). And I’m not the only one. Microsoft CEO Satya Nadella says: “The new workflow for me is I think with AI and work with my colleagues.”

Starlink to practice building a communications network around Mars. (Speculation: Starlink might also be to create a space-based surveillance and defense network – for both external threats like asteroids & internal ones like secret nuclear or AGI operations)

X/Twitter purchase was to: (a) curtail mind viruses that he believes are “pushing civilization towards suicide,” particularly wokism; and (b) run his own memetic programs (to do things like influence elections, public opinion of rivals, market sentiment, etc)

People just don’t get to his level without the ability to control their public appearance. So why doesn’t he reign it in? Doesn’t he care about reputation? Actually, he’s a master of reputation. Each time his erratic behavior gets him attacked and he survives, he develops stronger memetic armor. He can increasingly get away with anything.

So he is also using DOGE to (b) score wins in the name Trump so as to be granted more power, (c) gain influence over many federal agencies – namely their budgets and staff, (d) learn how to control govt apparatuses in preparation for larger moves, both in the US and internationally

@buccocapital
This is a critical skill early career folks (and many mid-career people too) never learn:
You must develop “polite persistence”
It’s the ability to politely, over and over and over, push against the machine. Never go away. But in a way where people don’t hate you

Recent tv and movies: Interior Chinatown, Dead Dead Demons, Megalopolis, Beef

Interior Chinatown — mystery drama about Chinatown life starring a very committed Jimmy Yang, but the show soon becomes much more than that; lots of meta wackiness ensues which is super original, but sometimes originality at the cost of central plot and narrative momentum (I was often reminded of Everything Everywhere); Ronny Chieng’s character really stands out; I generally enjoy anything with Taika Waititi’s imprint

Gannibal — Japanese mystery horror show; concept had potential, but the vfx were kinda hokey and first episode didn’t hook me to continue

Dead Dead Demons — charming weird subtly funny anime about a dystopian near-future where a giant alien spaceship appears above the skies of Tokyo; the story is less about the alien invaders and more about society’s complex and layered reaction its appearance; the core characters are two high school girls and the people who are closest to them; the characters are really well done, lots of nuance, lots of subtle humor, great dialogue; a standout

Tale of Two Sisters — a solid Korean horror film with good acting, atmosphere, and story development; the tension was kept high, but I found the “horror logic” (the explanation of how and especially why the horror occurred) to be 20% too confusing and vaguely implied; would have preferred more exposition and more linear storytelling

Megalopolis — the set design / themes / cinematography are compelling, as is Adam Driver’s acting and the very A-list cast, but sorry the story is just weird and not relatable, the dialogue too stylized, the stakes too artificial and 1%-ey

In the Land of Saints and Sinners — I learned from this movie that Jackie Gleason is a really underrated actor, I finally saw someone other than Joffrey; loved the old Irish setting + tough IRA female lead + the small town vibes; good container for Liam Neeson to do Liam Neeson things

AfrAId — AI concept thriller starring John Cho; story and characters were cliche (a mix of Devs + Ex Machina, a kind of Alex Garland-lite). But the AI tech was well done — it felt quite realistic in our near (5-10 year) future, even eventually probable

Beef — finally started to watch it, am 4-5 episodes in; everything about it is well done — the evolving darkly humorous story, the excellent performances from Steven Yeun and Ali Wong, the great supporting cast including David Choe injecting needed lightness and absurdity and humor; the vibes are continually heavy and kinda depressing though, not sure if the story will brighten up in later episodes