He’s not what he used to be. Ask him. He’ll say something like: “Look, fair traveler, I was a mean, angry man-bull three thousand years ago, but the standard of living is way better now. I’ve got a sick pad. Eight Sleep. Impulse stove. And Theseus clued me in to an ownership stake in some olive oil ships back when he visited. I faced a lot of vol over the ensuing millennia, but about 200 years ago I got access to the S&P 500 and it’s been smooth sailing since.”

He’ll say this reclined on his divan, surrounded by fawning bull-boys and bull-girls. The wealth of nations has tamed him.

“But you want to see some scary shit we didn’t have back then, man? There’s this guy. Half mirror, half bird. Terrifying...” — and I couldn’t hear the rest as he quaffed his Celsius.

“What was that?”

“The Mimetaur, man. Half mirror, half bird. He’s everywhere. He flies up to your ear and tells you what the cool kids are doing. What they’re thinking, how they’re making money, what they’re saying. Then he shows you yourself as one of them in his mirror head. And the weak-minded, man — they go crazy. Tulips, witch hunts, the dot-com bubble, Beanie Babies. Oh, he is ALL OVER the Ivy League. All the Mimetaur.”

Beware the Mimetaur, ladies and gentlemen, for he will rob you of your mind, your sense, and your wealth. But while he enchants the world, he creates opportunity for the few who see past his song.

What follows are a few ideas for how to invest when the Mimetaur’s latest fads wear off.

Roll Up Distressed Hardware Companies

There are so many exciting defense and hardware companies today. They’re raising at very high valuations. They are hard businesses to run. Hardware is technically difficult. Managing lots of capex is hard. Markets with a single buyer (the government) or a small number of buyers have brutal sales cycles and require skills that are often orthogonal to technical excellence.

When the tide goes out, if these businesses are hooked on VC, they’ll have to sell. They’ll have lots of great IP, factories, robot arms. Roll them up under a person who knows their customers well. You could call the rollup of all the space companies... Constellation. JK, of course. I’m calling it the U.S.S. Enterprise.

Red Bull Becomes the Biggest Enterprise Software Company

Great enterprise software businesses sell outcomes. There are three parts to selling an outcome:

1. GTM — Sales

2. Building software — Eng

3. Making sure the software delivers the outcome — Sales/Customer Success/Product/Engagement, usually reluctantly

So in a fable-ous world, #2 is commoditized. And #1 is much harder than #2. Hence this tweet:

There is, of course, a Bending Spoons / Constellation / Thoma Bravo rollup play here. BUT I think a key part is also owning the fun assets that close the deal.

Microsoft Becomes the Biggest Security Company

I was jamming with a friend at Cloudflare about how his company is going to own enterprise web defense against hacker-run open-source models. His take: “Sure, but what we can’t fix is the wrench exploit.”

What he means is that it’s much easier to defend against a DDoS attack than against your lowest-level employee getting honeypotted.

So if employees are the vector, it follows that someone will:

1. Aggregate the logs of every employee action.

2. Set a defensive LLM loose on those logs. Any weirdness gets flagged.

Who’s best positioned to build this? The companies that own the office suite — LDAP, Active Directory, and all that stuff. Probably Microsoft. Probably they’ll buy a startup to get there. So there’s some alpha for you.

Sam Lessin is a General Partner at Slow Ventures, where he wrote one of the first checks into Solana at four cents a coin. Before that he sold a company to Facebook and was VP of Product there during it’s fastest growing years. Sam wrote the seed check into Fair Square Medicare and I’m a big fan.

The car is a 997.2 Carrera. 2009. White on Sand Beige.

In this episode we cover:

• Miata vs Porsche (00:00)

• Frankl and Man’s Search for Meaning (1:32)

• Thank you to USA, Capitalism and parents (11:07)

• Will AI destroy personal meaning (12:15)

• The probability that UFO’s exist (19:45)

• Star Trek a case study for finding meaning in a world of AI (22:55)

• The Catholic Church as the OG rocketship (27:00)

• The virtue of ugliness in a world where everyone takes hot pills (30:00)

• A little wisdom on parenting (31:45)

• Pros and Cons of putting a robotically carved marble statue of your wife in your entryway (34:45)

• Buying Solana at four cents a coin (36:42)

• Being the only philosopher in a world of Stanford Grads (42:00)

• Market timing science fiction (45:45)

Software Characterization

To algorithmic characterization. There seem to be three dimensions:

• Minimal logical qubit count - min logical qubits necessary to run the algorithm

• Toffoli gate count - Each logical operation in an algorithm is a gate. There are low-cost gates, which include a class called Clifford gates, and high cost gates, which include a class called Toffoli. The 3/30/26 Babbush et Al paper in my previous piece describes the Toffoli gate count of solving 256-bit ECC as 90M.

• Circuit Depth - This is the notion of parallelism. A quantum algorithm is described as a circuit. The quantum version of a circuit diagram is a line for each logical qubit with “notes” describing gates. Like music.

Imagine Babbush’s ECC-256 operation. 1,200 lines. 90 million “notes” on those lines. If every note had to play one after another - as a solo - the circuit depth would be 90 million.

But if the algorithm can be parallelized, you have an orchestra. With 1,200 qubit wires, many gates fire at the same time. Each beat of the song is one “layer” of simultaneous gates. Circuit depth counts the beats, not the notes.

So gates = notes. Circuit depth = # of beats to play the piece. Average number of parallel gates that can be executed per time step is gate count / circuit depth.

Later, I’ll put together how the algorithms for different quantum use-cases are characterized but gate count, logical qubit count, and circuit depth.

Hardware Characterization

So now I will attempt to characterize the hardware capabilities of quantum computers, so that we can say X algorithm can run on Y computer when it is created in Z months.

• Physical qubit count

• Overhead ratio - How many physical qubits are necessary to represent a logical qubit. This ratio improves (decrease) with novel error correction techniques and algorithm

• Logical gate speed - How long it takes to run a single gate

• Coherence time - How long the entire computer can hold its state before noise from the environment disrupts it.

• Below Threshold Error correction - Whether the computer can find qubits in an error state and fix them without creating net more errors.

For a given algorithm requiring m logical qubits and a circuit depth of d steps, the machine must have physical qubit count ÷ overhead ratio ≥ m. Without below-threshold error correction, d × logical gate speed must be less than the coherence time. With below-threshold error correction, this constraint disappears.

Case Study - Babbush 256-bit ECC Algorithm

Google’s Babbush Et All paper posits that 256-bit ECC curve encryption can be cracked with 90M Toffoli gates running on 1200 logical qubits. Here state of the art quantum computer capabilities per Claude

Note the two columns on the right are planned or theoretical. What screams here is that the max logical qubit reported count (there are probably pretty good unreported quantum computers) is 98.

If we then ask claude to extrapolate when current progress will reach 1200 logical qubits, we get 2029-2031. Interesting!

The first from, Google which simulated a novel quantum circuit on a classical computer and found that the 256-bit elliptic curve cryptography (ECC) could theoretically be cracked with 500,000 physical qubits. The state of the art estimate prior to publication was 9 million.

The second, from Oratomic, a quantum computing startup, and researchers from Caltech and Berkeley also simulated a novel quantum circuit, this one using neutral atoms, and found it could theoretically crack 256-bit ECC with 26,000 physical qubits.

The most interesting charts from these papers are the ones showing the physical qubit estimates for cracking popular crypto over time decrease exponentially. Here’s the chart from the Oratomic paper show 256-ECC and RSA-2048:

And this one is from the Google paper showing number of qubits necessary to crack RSA-2048.

Note that both these charts are on log scales. Fast progress.

Also worth pointing out that the best quantum computer in existence today can only run 48 logical qubits on 98 physical qubits with a 1/1000 error rate per gate. Per Google paper, cracking 256-ECC with a low number of qubits requires on the order of 10^8 gates.

You can read the tea leaves on the logical qubit/time chart of quantum computers but either way you slice there’s a big gap between 98 and 26,000, the number suggested by the Oratomic paper. Of course, the quantum computers that crack crypto will be run by national intelligence services, don’t publish their benchmarks, and will be effective for a long time before the world knows. Think WWII Enigma. Fifty years from now, I’d say there’s a 5% chance some government document is declassified showing the NSA was cracking 256-ECC as of today. 40% it’s as of 2028.

Code-cracking is an amazing nation-state use-case for a quantum computer, but not great for private enterprise because, well, the act is considered criminal.

What I’m more interested is in modeling small molecules for drugs and materials. Put optimistically and likely in a way that would make a quantum computer research cringe: the materials of Star Trek are likely to come from a quantum computer. I actually think more likely than from AI. Or perhaps an AI programming a quantum computer.

I am digressing a bit. An interesting hypothesis of the rapidly decreasing number of physical qubits to crack RSA is that there is a similar decrease in physical qubit (PQ) requirements for other quantum use cases, likely toward some asymptote.

I’m not sure how to think about this asymptote yet. Beauregard in ‘02 found a way to execute Shor’s algorithm on RSA-2048 with 4099 logical qubits. There is some minimum number overhead ratio, which is the number of physical qubits per logical qubit.

So what I want to do is take a few small molecule use cases, multiply them by an asymptotic overhead ratio to determine how many physical qubits they need. I’ll also need to estimate the circuit depth (# gates) for this problem. Then I can look at how far along actual quantum computers are (not simulations) and estimate when the computer will be capable of the problem.

Perhaps the most simple way to think of a quantum computer is a reality simulator. We live, largely, in a quantum world. There are 10^90 quantum particles in the universe. The laws that govern them have proven to be generalizable to other fields of physics except to gravity.

So with the caveat of gravity, one could say we live in a quantum computer. Or, equivalently, that a quantum computer is largely a reality simulator. Certainly we can say, because the force of gravity is weak at the quantum scale, that a quantum computer is a quantum reality simulator.

The skeptic might frown at this point and say, a classical computer is good enough reality simulator. Mathematically, this is only the case for very small realities.

Consider a classical computer with n bits. Each bit can be 0 or 1. Each bit is implemented by the presence of one or several electrons in a 2-3nm transistor. This computer can hold 2^n states over time, and only one at a given moment. If this computer needed to brute force a 128 bit sequence, it would need to run through (2^128)/2 sequences on average and 2^128 in the worst case.

A quantum computer uses a quantum particle as a bit. A qubit. Like a classical bit, a qubit has an enforced binary state, made possible because quantum particles have quantized energy levels. Unlike a classical bit, the qubit exists in both states simultaneously because of the quantum principle of superposition. Also unlike classical bits, the qubits are entangled.

The net of this is that a quantum computer with n qubits exists in 2^n states simultaneously. In the brute force example, this means it instantly contains the correct 128 bit sequence along with all the incorrect ones. A quantum computing algorithm (Grover’s search, given the problem is properly encoded) can find this one sequence in roughly 2^64 steps, compared to the classical computer’s 2^128 steps.

That’s 18 billion billion fewer steps.

Perhaps you are now thinking of the most obvious implication of this computational efficiency: security. The rough consensus is that once quantum computers can hold 4,000 logical qubits (more on this later), modern forms of encrypting data will be obsolete. This is true but also overdramatized because classical computers can implement quantum-proof encryption. iMessage is already quantum proof and over the next few years everything else worth encrypting will be too.

More interesting than decrypting the secrets of humans is decrypting the secrets of nature.

Consider the field of quantum chemistry, which uses computer simulations to discover the molecular structure of new drugs. In theory, the most accurate way to do this is to model each electron orbital in a molecule. Caffeine for example (C₈H₁₀N₄O₂) has 24 atoms and 160 electron orbitals. In practice, an orbital-level model is too computationally intensive for a classical computer. Instead they use a variety of simplifications. These work for most molecules but not all, notably not for molecules that contain metals.

Modeling orbitals is not a problem for a quantum computer. It would roughly be able to model a molecule with orbitals scaling linearly with number of qubits. I am not a quantum chemist, but I would imagine this would significantly accelerate drug discovery.

Drugs are not the only high value molecules. The energy density of a battery, the efficiency of a catalyst, the critical temperature of a superconductor — these are all emergent properties derived from the quantum behavior of materials. Classical computers can’t model these properties from first principles because the electron interactions are too complex. A quantum computer could simulate candidate materials that today are discovered only by slow, expensive trial and error: higher-capacity battery chemistries, more efficient catalysts for industrial processes, or new superconducting compounds that work at higher temperatures. The quantum computer doesn’t build these things — it identifies what to build.

Here’s a DARPA slide on the potential applications.

To someone who says, “quantum computers won’t be able to create much economic value,” I’d say that people have been saying the same thing about every new computer technology for the last 65 years.

The economic value of quantum computers could very likely be far larger than anyone anticipates today.

So that’s the theoretical potential of quantum computers. When will we reach it?

The above DARPA slide suggests that quantum computers will start to provide economically useful results when they reach hundreds of logical qubits. More and more use cases unlock with more qubits and 10,000 logical qubits is when RSA encryption is solved.

I think it is therefore fair to think about 300-500 logical qubits as the first commercial gateway of quantum computers. At this point, a quantum computer could pay for itself.

There is an important nuance to understand here: the qubits in the DARPA chart are logical qubits rather than physical qubits. Building a quantum computer is uniquely challenging because the environment is full of noise — electromagnetic interference, vibrations, material defects. One architecture, superconducting circuits, needs to be cooled to 10 millikelvin. Another, trapped ions, must isolate individual atoms in a vacuum using precisely tuned electric fields. Every architecture faces the same fundamental problem: qubits are fragile. Today’s quantum computers maintain coherence (run without error) for 100 microseconds to ten seconds depending on the type of qubit.

This problem is solved, simply speaking, with redundant qubits. A group of physical qubits — 7, 17, or 49 or more depending on the code — will encode one logical state. A similar number of ancilla qubits will monitor them for errors. The overall group is called a code. Today’s computers require roughly 100-1,000 physical qubits per logical qubit, though this ratio is expected to improve with better architectures and error correction algorithms.

So the proximate milestone of 300 logical qubits translates roughly to 30,000 to 300,000 physical qubits.

So…drum roll… here is how many physical qubits have been demonstrated over time by quantum architecture.

And here’s the corresponding logical qubit count.

My first reaction to these charts is that they are largely unclear. Physical qubit counts alone don’t tell you much. A machine with 1,000 noisy qubits may be less useful than one with 100 high-fidelity qubits. What matters is error rates, gate fidelity, connectivity between qubits, and how well the architecture scales. Neutral atoms, for example, barely registered a few years ago and are now near the top of the physical qubit chart. The landscape can shift fast. Specifically:

Trapped ions have a promising logical qubit growth rate

Superconducting qubits are at the top of the physical qubit chart but not on the logical one. Why?

Photonic qubits are not on the logical chart at all. Why?

Two of my Physics TA’s from college are working on architectures not on the above plots. Why?

Suffice it to say there are lots of questions and there is no clear winner. To me, this is exciting. Quantum is a pre-consensus field with enormous economic potential nearing the 300 logical qubit commercialization milestone. And there is enough uncertainty about this statement and enough complexity inherent to quantum mechanics, that most capital and people are staying away from it. This is, I think, what a swell looks like.

Cloud got big 20 years ago because it’s easier than on-prem. Just put the software on AWS. Even better, buy a subscription to software running on AWS. Total abstraction.

I predict that on-prem will get big for a class of people who never had it: consumers.

I’ve been running OpenClaw on an old Mac mini for the last two months. It turns on the espresso machine for me every morning. Summarizes the news. I haven’t used web-based Anthropic, Gemini, or OpenAI since.

Perhaps the coolest part of my OpenClaw setup was when I started sending it voice messages. To transcribe them it downloaded Whisper and ran it locally. On the Mac mini. Wow. At the time I was paying $25 per day for Anthropic credits, so the idea of running a model locally for free was A+.

Oh, here is another observation. The people running the big AI companies are nuts. In a good way if you are an investor in them. They will probably generate lots of returns. But they are not thinking about me. I am priority 10^20 on Altman or Amodei’s list. I believe none of the privacy guarantees they offer.

So here’s what I think will happen in the next couple of years.

People like me — with something to lose and an understanding of technology — will run an OpenClaw-like agent on a Mac mini with the M* chip. We’ll use open-source models. It will be entirely private. This will be my personal and my family on-prem cluster. It’ll be Apple hardware. Apple under Cook is great at iterating on hardware spec and this is all they need to do. Increase the FLOP capability of the M chip until it can run a model as good as Opus is today. Apple sucks at software, so they won’t make the agent. Whoever makes the agent and grabs all my context will have a massive moat (unless they are silly enough to offer context export).

People who are mass market won’t understand the privacy implications of cloud vs on-prem. Their only hardware might be a phone. They will buy a cloud agent and pay $5/month for it, which will be cheaper than a Mac mini. In a sci-fi novel I could imagine their agent would be called “MTHR.” MTHR does everything for them. Files taxes, pays bills. Humans just live. MTHR does boring.

The above are two companies. Brand matters today in software. The former is: privacy, privacy, privacy. The second is: just fix it, I don’t care. This means, to the thesis of this article, affluent class’s Mac mini = box at home that runs your important code = consumer on-prem.

I think are lot immigrant and first generation kids were in the same boat as I was. I want to give them a head start. Here’s everything I wish I knew about capitalism when I was 18.

Capitalism is the worst economic system, except for all the others.

Most kids grow up with communism at home and capitalism on the playground.

At home, Mommy and Daddy are the fair allocators of resources to all the siblings. For example, on the way to school Mommy might pack you and your siblings and equally good turkey sandwich for lunch at school. Mommy loves you a lot so the sandwich is made of the highest quality ingredients - organic turkey, and lettuce and Russian rye bread.

At school, you pass by the cafeteria selling Chick-Fil-A and Dominos pizza and you realize you’d much rather have one of those than your healthy turkey sandwich. Alas, these coveted good cannot be purchased in units of turkey sandwich. You need a more liquid medium, liked the U.S. Dollar. So, on a lucky day, you sell your turkey sandwich for $5 and buy a juicy Chik-Fil-A sandwich and have enough left over for a coke. Those were good days.

If you look at history, the system of the playground - capitalism - has thrived. Countries with liberal democracies and capitalism are the wealthiest on the planet. Their citizens enjoy the longest lives, highest GDP per capita, and the highest literacy rates. Interestingly, they are not always the happiest because wealth doesn’t lead to happiness, especially when it is not earned. But that’s a topic for a different article.

In contrast, the citizens of Communist countries live terrible, sad, and impoverished lives in ways Americans cannot comprehend. Let me color this in a bit for you. My parents, refugees from the Soviet Union, had never seen more than one type of meat in a grocery store until they came to the United States. When my Mother took my brother to the dentist here for the first time, she demanded that anesthesia not be used because too many people in the USSR died from its misadministration. Of my four grandparents, two died from botched surgeries that would be considered routine in the United States. Everyone is short because there wasn’t much food and one of my relatives walks with a limp because he grew up during a famine and the bones in his legs never properly developed.

This is but a taste of the tale of those who lived. Over the course of its history, the regime my parents lived under murdered 20 million of its own population. Is eastern Communist neighbor China, murdered 50 million of its own.

The road to communism starts with runaway capitalism. Improperly regulated, capitalism can lead to extreme wealth inequality. Leftist political leaders seize the opportunity to rally the proletariat toward communism. An equal share for everyone. To each as he deserves. The billionaires have all this money; what about us. They rally the people toward revolution. The billionaires are murdered, and their wealth stolen by the leftist leaders.

These leftist leaders are not the father and mother of the people.They are politicians and keep the money for themselves. Would you believe it!

When the people are no better off, their leaders find some other group to blame, and kill them and steal their wealth. Until there is no one left to blame.

For the latter half of the 20th century, it was obvious to most Americans that capitalism was the superior system. But were are once again in a period of high wealth inequality, similar to that of the gilded age in the late 19th century, and the youth are hearing the siren song of capitalism. (Ironically, the high costs they face in healthcare, education and housing are all a result of government intervention in those markets)

But though Communism may sound like the warm and fair embrace of Mommy and Daddy again, it leads to nothing but poverty and death.

Capitalism is the only nation-scale system that has lead to prosperity.

Be Good at Math

Almost all of the Russian Jewish immigrants that came over to the United States with my parents were scientists or mathematicians. These were the only fields of in the USSR where the state hadn’t perverted the truth. To be a Marxist historian meant becoming an expert in a fictional history invented by the communist party. To be a lawyer meant pretending that the concept of justice existed in a totalitarian state.

In a country of lies, math and science were the only refuge of truth. Even in the U.S, where we are free to read competing version of history, the humanities are not pure. They are subject to the fads of the day.

So math is truth. And if you have a taste for math, you have a taste for truth. My bar for “taste for math” is incredibly low. You do not need to be mathematician. You do not even need to know calculus (though it’s a shame not to know it). You need to be able to answer some of the following basic questions. A surprising number of people can’t.

• If I make X per day, how much will a make a year? How much will be left after tax? After my expenses? Is the remaining amount positive or negative?

• How much money do I need to earn per year to support a family with one child? With two? With three?

• If I put a dollar in a savings account making 3% a year, how long will it take to double? How does this compare to putting the money in the stock market where it will grow 7% a year?

• If I run a coffee shop and sell someone a coffee for $5, how much is left over after I pay for the beans and the barista? How much is left when I pay the rent? How much is left when I pay taxes?

• Should I buy a gallon of milk at the grocery store for $5 or a parcel of three gallons from Costco for $12?

• If inflation is 3% a year, how much is value does cash in a savings account yielding 2% a year decrease every year?

This is all basic addition, subtraction, division, and multiplication and something called the rule of 72 (a quantity growing at X% a year will double in 72/X). That’s it.

I have never met anybody rich who wasn’t comfortable doing this type of basic math.

Understand Compounding

Over the last 25 years, the American stock market has returned on average 10% a year. If this trend continues, a dollar invested in the market will double in seven years.

It’ll double again in another seven years. So over 14 years, a dollar turns into $4. Over 21, into $8. Over 28, into $16. 28 years is not that many in the span of a human life. Over 49 years, a dollar turns into $128.

Just think about that for a second. If you put $100,000 in the American stock market at the age of 18 and waiting until you were 65, it would, roughly speaking, turn into $12.8M dollars. At 72, it’ll be $25.6M.

Think about that the next time you decide to buy a nice watch or a fresh pair of sneakers. Every dollar you spend today is $4 in 14 years and $128 in 49 years.

This is the power of compounding, of geometric growth year over year.

So far, we’ve discussed investments of capital. But there’s a far more important asset you have to invest - your time.

See next section.

Surfing the Wave

I wrote another article on how the best capitalists are like surfers. They see a wave coming in, like the rise of minicomputers, internet, bitcoin, or AI and get on early. These waves are tsunamis, but unlike real tsunamis which destroy everything in their path including the surfers, these lift all surfers, even the most terrible ones.

These waves can be reduced down to a growth rate, a terminal size, and a time period. Consider the personal computing tsunami. From 1980 to 2020, the number of people with PC’s went from basically zero to 1.4B. In the 80’s this number was growing at 50% YoY. In the 2010, it grew by 1.8% per year. Similar tsunamis are the number of people with internet, bitcoin wallets, and using AI.

You can get rich without getting on a tsunami. A friend of mine runs a software business in a box for med-spa operators. The number of med spa operators is increasing at 20% a year. The virtue of a smaller growing market like this is that not everyone knows about it.

I think that as the internet increases the rate that information spreads to all of humanity and decrees the friction to start a business, the period of these waves decreases.

So it’s important to learn to recognize the wave as it’s coming. Once you hear about it from someone else, it might be over. Special note here on advice from parents. The wave that your parents rode or saw their rich friends ride has almost certainly come in to shore. Being a doctor ain’t what it used to be.

Think about what the future will look like in 20 years, what wave will get there and paddle out.

A Primer on Ownership

The first private company to get big was the Dutch East India Company (VOC). It put investor capital to work extracting spices from Indonesia and in its heyday was more powerful than the European nation states it competed with.

To attract capital, the VOC paid dividends, a share of its annual profits. So this is a historical example of how equity (ownership) in a business returned a profit to investors. Equity works roughly the same way in the modern stock market except that many companies invest their profits into growth instead of paying it out as a dividend, which usually results in the company becoming more valuable.

A different form of financial instrument is debt. There is a saying that lending is the second oldest profession. Ancient Babylonian cuneiform records show loans, in grain, made to farmers in return for a portion of future harvests.

Debt is commonplace today. In fact most people buy most things with a credit card, which is a loan you ideally pay off monthly. You have a car loan. You have a loan on your house. Companies take out debt to fund projects.

Another way of thinking about debt is money from the future. You get money from the future today and the price is interest. So if you want to buy a home for a million dollars, which you believe you’ll have in the next 30 years but not today, you put down 250K, get a loan for 750K, and pay 6% interest a year for the next 30 years until it’s repaid (if you do the math, you’ll be paying a lot more than 750k over 30 years).

There are all kinds of equity. Public equity in public companies. Private equity in private companies. In real estate. People build careers specializing in subcategories of the above. And there are all kinds of debt.

The World is Secretly Run by 28 year olds

When I was 25, one of my roommates was a legal clerk for a U.S. district court justice. I was surprised that he was writing the Justice’s opinions for him. He would draft what he through the justice wanted, the justice would edit, and that would be that. Eventually he learned to be the voice of the justice.

This pattern generalizes. In the world of investing, people in their 20’s do all their work, and get it signed off by people in their 30’s and 40’s who already have a reputation. The 20 year olds who do great work gain the reputation, get older and hire 20 year old to replace them.

This is in large part due to the fact that 20 years olds have more time and energy than any other demographic. I’m writing this as a 35 year old with a seven month old child and I have significantly less time and energy to work than I did when I was 25. And when I have two more children, god willing, I will likely be mind-boggled by the amount of free time I have today.

Point is: make yourself in your 20’s. Pick your wave and work 80 hours a week to stay on it so that when you’re in your 30’s you can let it ride. Stay away from the post-modern nihilistic bullshit about finding yourself in your 20’s. You will wake up one day at 30 and the world will have passed you by.

Learn Some Manners

People who come from abundance act like it, as do people who come from not much. There are two levels to manners. The first is the easy stuff: how to hold a fork and knife, hold the door open, use your napkin. All things that a hypothetical etiquette grader could measure.

Then there’s the more fuzzy wuzzy stuff. One of the things I see immigrant kids do all the time is say thank you repeatedly to the same person for the same thing. This signals subservience. There are all sorts of things like this and one of my investors - Sam Lessin - wrote a comic book about them. Worth checking out.

Talk Less

My step father in law has a saying, “if you’re explaining, you’re losing.” This is roughly true. The Ivy League teaches students to impress by speaking and writing at length, using all sorts of fancy vocabulary and tools of rhetoric.

In the real world, people who write and speak at length either don’t know what they want to say, have nothing to say, or are trying to cover something up.

You’ll also find that as the people you talk to become wealthier and more powerful, their attention span decreases, usually exponentially. You will lose them after 20 seconds.

Speak slowly, clearly, like every word out of your mouth costs you $100.

Negotiations are Turn Based (and know when to STFU)

When I was a kid, I played all sorts of strategy computer games. Civilization IV was turn based. You took a turn, the computer took a turn. StarCraft was real time.

Negotiations with humans are turn based.

There are three components to each turn in a human negotiation

1. Whether there exists a response

2. The time taken to respond

3. The content of the response

If there is no response, there is no interest. If there is a response there is interest and the time taken to respond is correlated to the magnitude of interest. The content of the response is usually tertiary to the first two.

This applies to email conversations as well as verbal. Do not speak twice in either setting. Say your piece and wait for a response. This is especially true when presenting pricing or terms of a deal. Look them in the eye, state your terms, and STFU. There will be silence. The silence will continue. It will be painful and long. It will continue. Oh my god how long could it take.

Your counterparty is using the silence to test you. I can’t imagine how much potential ACV was lost because socially awkward nerds couldn’t bear the silence and walked back the price without the other side saying a word.

Also once you make the sale, STFU. “Great. Docs coming your way in an hour.”

The Power of Will

I had the good fortune of meeting a man who was a U.S. Senator, a Governor, a SEAL, and a Medal of Honor recipient. A real American hero. He was involved in legislation that allowed my family to come here as refugees from the Soviet. He’s a hoss and a hoot.

I asked him, “what’s the secret.” He told me, “You got to figure out where you are. Where you want to go. And what you need to get there.”

If there is one thing you take from this article, take this lesson. People mess it up all the time firstly by not figuring out where to go. They let others tell them where to go or they don’t go anywhere or they go where they think others want them to go. Then they don’t adequately assess where they are. Then also don’t figure out what it needs to get there. This is a common failing. They don’t raise enough money, or hit the right checkpoints, or hire the right people. And they don’t add margin of safety. It usually takes 2x or 3x what you think it’ll take to get there.

The most important thing you’ll need on the journey is will. If history is a tapestry, it is woven by men and women of will. Alexander the Great conquered the ancient world and taught it the wisdom of the Ancient Greeks because he wanted to. The Catholic Church won over the Roman Empire because St. Ambrose St. Jerome and St. Augustine made it so. Winston Churchill prevented England from surrendering to Hitler despite all odds because he refused to surrender. His Cambridge and Oxford educated peers thought surrender their only choice.

History is full of dogged individuals who impose their will on the world to despite the outraged protestations of the well credentialed and “intelligent” defenders of the status quo. Be the former.

—-

So ends my first version of the immigrant kids guide to capitalism. Everything I wish I knew about business when I was 15. I hope you find it helpful.

If the Pope was the trunk line to God, then his bishops and priests, spread throughout the continent, were his branch lines, connecting the almighty to the rulers of Europe. They were well educated, spoke Latin, and spoke for a Church that wielded more power than any army could: the keys to the gates of heaven.

Like any large organization of humans assured of their own superiority, members of the Church took advantage of their position. Over time, their reputation in earthy matters outweighed that of the divine. The Church had always used its heavenly keys to influence rulers, but it went too far when it packed them up as indulgences and put them on sale to the common man.

In 1517, a German priest named Martin Luther refused to believe that Church was the sole channel to God. He argued that there should be no gates for the common people to speak to the divine. Up until then, bibles were in Latin, a language common people didn’t understand. Luther partnered with Gutenberg to give them a bible in German to read by their own candle light. And permission to have their own relationship, no Pope involved, with God.

This meme spread like wildfire throughout Europe, forever toppling the Catholic monopoly on Christianity. The Church rose to power, ruled, abused its power, and through these abuses lost credibility with its believers. The Protestant Reformation was the mass rejection of the largest centralized authority in all of history.

I believe that we are living during a Second Reformation.

Today, the constant and withering gaze of the internet is exposing deep flaws in many institutions we have historically viewed as infallible. Perhaps the greatest institutional betrayal of the last 20 years was George W. Bush’s invasion of Iraq and Afghanistan. These wars seemed initially virtuous but, with time, turned out to be an enormous squandering of American treasure, life and credibility, that ultimately led to a less stable and more radicalized Middle East. More recently, the American Democratic Party put a senile candidate on stage to debate Donald Trump and then proceeded to tell the American people not to believe what it saw with its own eyes.

New York and San Francisco, perhaps the cities with the highest tax revenue in the country, are dirty and dangerous. In a panicked response to COVID, our government shut down the country, printed trillions of dollars. The result was distorted financial markets, shuttered main street businesses and school children cruelly deprived of socialization.

Our current president’s electoral success is largely due to his ability to diagnose our increasing distrust of our “churches” - our formerly infallible institutions. He, interestingly, makes no claims of his own virtue. In fact, he is clearly not so. Yet he is viewed as honest, and in the face of so much institutional dishonesty, this makes him popular.

I might be the first to label this trend a Second Reformation, but I’m far from the first to describe it. I first saw it in George Packer’s The Unwinding in 2013. Anyone who agreed with Packer’s thesis then could have monetized their belief with great success by purchasing (and hodling) bitcoin, the monetary manifestation of distrusting central banks.

By the 2024 election, the Second Reformation was more obvious. Though New York Times readers were shocked by Trump’s election, prediction markets - which work surprisingly well - had seen it coming for months.

Ideological memes, typically known as philosophy, take decades to sweep through people, and I believe we are still in the early innings of the Second Reformation. Here are some of the ways I think it’ll continue over the next ten years.

$1M Bitcoin

Bitcoin is the most obvious rejection of the traditional fiat financial system. At $100K a piece today, its current “market capitalization” is roughly a tenth of the total value of Gold on earth. As America grapples with its debt burden, bitcoin will increase in value. Seniors facing rising costs of living may view the 10x potential of bitcoin as their only chance to pay for retirement. Younger Americans may view it as their only chance to buy a home.

The Solar Home

My parents moved from the USSR to Houston, Texas in 1980. For the first 45 years of their life in Houston, their home was consistently powered by the electric grid. Now, my father has installed a generator so they have power when the new, Texas-only grid is down. As Tesla solar panels lower the cost of going off the grid, and as the grid becomes less reliable, people will increasingly opt for self sufficiency via solar on their roofs.

A Wave of Doogie Howsers

In the Napoleonic era, a British Man-o-war had several officers called Midshipmen. Their typical age: 11 years old. The American paradigm of extended adolescence is historically idiosyncratic. Children and teenagers will A) through AI have the best tool for learning ever B) understand that waiting to pay $100K/yr to go to college is a trap. We will see more young builders, writers, investors, and thinkers than ever before.

Personal Models

Historically, Silicon Valley has been part of the counter culture. The pioneers of the PC industry wanted to give everyone a computer to fight “the man” with the mainframe. AI is not like this. Because it’s so capital intensive, it is still in its mainframe era. It belongs to “the man” (although the man today seems cooler than in 1970). I think hackers see this and will try really hard to A) pirate models developed by frontier labs and the Mag7 B) create more efficient and more specialized/small models that require a fraction of the compute. We will be truly free when everyone can run GPT-15 locally on their own laptop and be 100% confident that Zuck, Altman, Musk, or Pichai, or Nadella are not using the data to train the next one.

Prediction Markets & Substack Replace Traditional Media

The New York Times gives its readers the proper opinions to air at boozy book clubs in the UWS. WSJ is a significantly better publication, but it’s still talking points for rich old white guys.

If you want to know what’s really going on, you read an industry-specific Substack. And if you really want to know the future, it’s in the prediction markets.

The front page of the future is a bunch of prediction markets with industry expert “Substacks” to support interesting positions.

The Rise of Trade Schools

The Ivy League broke when the President of University of Pennsylvania said that the genocide of the Jews was justified in certain contexts. Unless daddy is rich, it makes no economic sense to pay full ticket for a non-STEM education at an Ivy League school and therefore at any school. As college becomes more and more of a raw deal, learning a trade, especially with the coming data center build out, will be very appealing.

You are Invited to Think Freely Now

The Protestant Reformation was the most subversive idea to take over Europe since the advent of Christianity 1500 years prior. It opened the door to continued critical thinking, which led to the enlightenment, and modern political theory. It also caused massive geopolitical change. Much blood was spilled between Catholics and Protestants.

Just like the first, the Second Reformation will open an intellectual dam. With nuclear weapons and AI, the geopolitical risks are much greater than they were 500 years ago. Scary.

But today, there is no one who would argue that the Protestant Reformation wasn’t critical to the intellectual advancement of the human species. And 500 years from now, I doubt anyone will argue that we should have continued to keep our heads in the sand instead of embracing this brave new world.

Many people who hold this opinion do not live in a “Western” democracy. Many of the people who disagree with it do. Funny how that works.

To begin to answer what Western Civilization is, I read Plato’s Dialogues - Euthyphro, the Apology, and Phaedo. These are widely considered to be the first works in the Western canon. The last time I had set eyes on them was in college, and I promptly decided they were useless.

Seventeen years later, I find them remarkable. These dialogues are all different episodes related to the trial and execution of Socrates, an Athenian philosopher found guilty in 386 BC for corrupting the youth.

In the first - Euthyphro - Socrates runs into the titular Athenian on the way to the courthouse. Euthyphro asks him “what are you doing here?” Socrates responds, “Well a young man named Miletus accuses me of corrupting the youth. He is very young but must be very wise.”

Ah. Irony.

Socrates then returns the question to E. To his surprise, E. is there to prosecute his father. “How can this be?” he asks. E. explains that his father’s servant murdered a slave, so his father bound this servant, threw him in a ditch, and went to the nearest temple for the Oracle’s advice on how to proceed.

On his return, the father found the servant dead. E. is there to prosecute him. He proudly exclaims that murder is impious, from the perspective of the gods, no matter the circumstance.

Enter the Socratic method. Socrates, feigning awe of E.’s wisdom asks to become his student so that he can learn what is pious and what is impious. E. offers the simple answer that piety is what the gods say is pious and impiety is what the gods say is impious. S. pounces on this. He asks if the gods agree on everything. Of course not. Then they do no agree on what is pious. And on and on.

You might be thinking, “save me the read, what’s the answer?” What is, as they say, the “TL;DR.” There is none, and that’s the point. Euthyphro and Socrates never discover the nature of piety. But at the end of their conversation, they’re closer to it than when they started.

Many similar dialogues follow. All explore different facets of the question at hand, all without a definite conclusion.

You want simple answers? Sorry, none for you here. Thinkers only. This is the actual message. A model for the meritocracy of ideas which, Western civilization, more than any other, is.

Or, as Socrates might have said in a dialogue Plato never published:

Socrates: Let us examine whether it is pious to seek the truth

Dan: Let’s

Socrates: Do you agree that humans among animals are unique in their ability to think critically?

Dan: Yes

Socrates: Good. If you had a servant plowing your fields for a yield of 10 bushels a year and you fashioned a more fertile seed and stronger plow and gave it to them, would you not expect them to use it?

Dan: I would

Socrates: Indeed. And would you not be angry with them if you fashioned them better tools and they didn’t use them.

Dan: I would

Socrates: Then would not the gods, who we are servants to, expect us to us the tools they fashion us. And, indeed, be angry with us for not using these tool?

Dan: They would

Socrates: It then must follow that thinking critically is demanded by the gods.

Dan: Agreed.

The first volume covers his birth in 1874 to 1932. It’s 883 pages. The third, 1940 to 1965. 1,053 pages.

The second volume spans a mere seven years, 1932 to 1940, and is 689 pages.

Why is 26% of the biography devoted to 8% of the man's life?

The answer is that those seven years explain one of the greatest mysteries of Western civilization. The mystery of how Britain and France, the victors of the previous war, did nothing as Adolf Hitler built the most powerful army in Europe, conquered the continent, and stained it with an evil constellation of human-slaughterhouses that murdered 11 million Jews, dissidents, Roma, homosexuals, and disabled people.

The mystery of how, only twenty years after the peak of the British Empire, a bean-counting British Prime Minister came to believe that buying peace from that heinous German dictator was preferable to confronting him.

Britain today is a shadow of its past. But it once was the world’s beacon of liberalism and free thought. With the Magna Carta, it was the first example of people legally taking power from their King. It is the world’s first parliamentary democracy. It is birthplace of the steam engine and the Industrial Revolution. It banned slavery 58 years before it’s American cousin.

The British Empire, racist by our standard, brought order, modern medicine, basic sanitation, and education to 400 million people across the earth. The pipes that supply Bombay today with fresh water were laid by British engineers over 150 years ago.

Had Adolf Hitler taken Britain in 1940, either by force of by treaty, one thousand years of British civilization would have come under the murderous boot of the swastika.

One man held the British banner high. A soldier, writer and, politician who had the bravery to resist Hitler when all others had given up hope.

His name is chiseled into the slabs of history next to those other few who saved Britain when it was on the knife’s edge. Queen Elizabeth. Sir Frances Drake. Wellington. Horatio Nelson.

His name was Winston Churchill.

Reflections

In the age of TikTok, reading a multi-volume biography first published in 1980 felt like uncovering an artifact from a more advanced and fallen alien civilization.

Manchester spent five years researching the first volume. Another five on the second. He died before he could complete third, which was finished, at his request, by Paul Reid.

I can think of no book I've read in the last ten years with this level of research. The only other work that rings similar is Caro’s 50 year project on LBJ. As a writer, Manchester was a craftsman. He had also fought in the Pacific campaign as a marine in World War Two and new Churchill personally.

He was a man who lived and then wrote to tell the tale and his writing is correspondingly invigorating. Consider his description of Mein Kampf:

Within a few years, when its writer came to power, Mein Kampf’s presence would be almost obligatory in the homes of respectable burghers, and it led the list of his country’s most popular graduation and wedding gifts through the 1930s. How many actually read it—plowing through those desperate Teutonic sentences to find the verb at the end—is unknown, but its sales eventually exceeded six million copies, making it Germany’s number-one best-seller and bringing Hitler $1.8 million in royalties. Unlike Churchill, he paid no taxes on this income after 1933, having declared himself exempt from them. His prose, however, has not borne the test of time.*

*Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (p. 1088). (Function). Kindle Edition.

If you only know about World War I and World War II from what you learned in school, I would suggest that you know very little and you need to read this book.

What follows is not a summary. I urge the reader to reject summaries. The mind, like a dog’s mouth, must chew the flesh raw and bone-in to keep its teeth clean and sharp.

Instead, I’ve written down a few of my relfections on Churchill and the events of his life. I hope they challenge what you think you know about his time and lead you to cracking open The Last Lion.

Churchill: The Victorian Soldier

It is incorrect to think of Winston Churchill as a politician. He was first a soldier. Then a writer. Then a politician.

At the time of his birth, Winston Churchill's name was already famous in England. He was descended from John Churchill, the 1st Duke of Marlborough, who became a national hero after the Battle of Blenheim in 1704, a famous battle in the war of Spanish Succession. As a reward, Queen Anne gave John a massive estate and funds to build a palace. It was called Blenheim. They don’t make ‘em like they used to:

This forever gave Winston a tie to the aristocracy. However, as the son of a younger son in the family line, he did not inherit wealth or Blenheim Palace. He had all the prestige of the class, but none of its wealth.

His upbringing was Victorian in the extreme. By today's standards, it would be considered extremely cold. It is unclear how many days per year his parents spent with him before the age of three. At the age of five, they promptly shipped him off to a boarding school where he solicited their attention eagerly in letters. These letters were filled with plaintive appeals for visits, toys, and praise — nearly always ignored. He was, in school, a failure in the classical subjects, routinely disappointing his father.

At times the breakdown in communications was total. He made elaborate plans for Christmas in 1887, only to discover at the last minute that both his parents were away on a seven-week tour of Russia. Jennie’s sister Clarita—now called “Clara,” like her mother—invited him to her home but then fell ill, so he spent the holiday with his brother, Woom, Leonie, and his uncle Jack Leslie. Once he wanted to write his mother but didn’t have her address, didn’t even know which country she was visiting. He was too young to travel in London alone, yet he couldn’t even be sure there would be anyone to greet his train when he arrived: “We have 19 days holiday at Easter. I hope you will send some one to meet me at the station.” Astonishingly, Randolph met an appointment in Brighton a short walk from the school but didn’t bother to cross the street and call on his son. Winston found out about it. “My dear Papa,” he wrote, “You never came to see me on Sunday when you were in Brighton.” It happened again: “I cannot think why you did not come to see me, while you were in Brighton, I was very disappointed but I suppose you were too busy to come.”

There was a note of resignation here. He was disappointed, but he was not surprised. His father was too busy. His father would always be too busy. Indeed, unlike his wife, he rarely wrote Winston. Jennie was a lax mother, but later, when her situation altered, she became a loving one. In Randolph’s case that was impossible. Randolph actually disliked his son.

Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (pp. 199-200). (Function). Kindle Edition.

By the age of 18, Churchill’s father believe his son would was too stupid to go into politics. The military would be a more apt. He wanted Churchill in the infantry because it was more distinguished than the cavalry and cost less. At the time, a cavalryman had to maintain his own stable of horses. Unfortunately, Winston failed the tests required and went to Sandhurst, the British Westpoint, as a cavalryman.

There, he joined Queen Victoria’s Army. An army the likes of which the world has not seen in over a century.

QUEEN Victoria’s army, which would leave a lasting impression upon Churchill, was an eccentric, insular institution that had changed little since Waterloo, a battle some men still alive could remember clearly. The troops were led by patricians: Wellington had decreed that English gentlemen made “the best officers in the world, and to compose the officers from a lower class would cause the Army to deteriorate.” Military leaders, it was held, should be men with “a stake in the country.” Only WASPs need apply; there were few Disraelis or Rothschilds wearing epaulets. Apart from that, public-school boys were accepted if they were “sound,” were “of the right sort,” and came from “good families.” (You could quickly identify those with classical educations; they swore “By Jove,” an oath never heard in Other Ranks.) In endorsing an application, one colonel scrawled across it, “The son of a good soldier, his mother is a lady.” It was common to note on reports as a recommendation: “A good man to hounds.” Lord Roberts always checked the bloodlines of a man applying for an appointment, and according to the career officer Ian Hamilton, if Roberts thought the candidate “owned a good grandmother he would give him a trial.”

Gentlemen were expected to guard zealously their regiment’s “tone,” a Victorian word freighted with class consciousness. The army counted on them to live by the gentleman’s code, and if they didn’t know what that was, they weren’t commissioned in the first place. In some ways the code was peculiar. Gambling debts were always settled promptly, but those to tradesmen weren’t. Six years after joining the Fourth Hussars, Churchill still hadn’t paid the tailor who made his first uniforms. But once you were in, you could stay in forever. Some officers who had reached their eighties retained their commands. Nor were crippling wounds disqualifying. Two generals, Roberts and Wolseley, were one-eyed. Hamilton’s wrist had been shattered at Majuba. Lord Raglan had been one-armed. So was Samuel Browne, who invented the Sam Browne belt so he could draw his sword swiftly with his remaining hand.

By continental standards, the number of men in uniform was tiny. Asked what he would do if the British army landed in Prussia, Bismarck replied: “Send a policeman and have it arrested.” There were no corps, no divisions, nor even brigades. Everything was built around the regiment. An infantry regiment might have a single battalion of seven hundred men divided into five or six companies. An entire cavalry regiment like Winston’s—hussars, dragoons, or lancers—numbered from three hundred to five hundred men, led by its colonel, four majors, eight captains, and fourteen or fifteen subalterns. There were just thirty-one cavalry regiments in the whole of the British Empire. Seniority—which determined which outfit was stationed on the right in an attack—was jealously guarded in both the cavalry and the infantry. The Coldstream Guards went back to 1661, the Grenadier Guards to 1656, the Scots Guards to 1633, the Buffs to 1572, and the Honourable Artillery Company, which was neither a company nor confined to ordnance, to 1537. Each of them cherished drums and flags captured in battles, some long forgotten, and each dressed officers and ranks in absurd uniforms. The Times had reported on the regalia of the Eleventh Hussars: “The brevity of their jackets, the irrationality of their headgear, the incredible tightness of their cherry-colored pants altogether defy description.” The man responsible was George IV, who had never been near a battlefield but who, as Prince Regent, had designed uniforms so tight that men could hardly get into them. In his opinion, “A wrinkle is unpardonable.”

These zany costumes had become preposterous with the invention of smokeless gunpowder in 1886, but the British didn’t like smokeless powder, and wouldn’t accept it until their enemies had shown them how effective it could be. It was new; therefore, it was suspect. So were the breech-loading fieldpieces Krupp had introduced; Britain was the last European power to abandon muzzle-loading cannon. So were carbines; those issued to one cavalry regiment were dumped on the stable manure pile. The Duke of Cambridge protested that he wasn’t against change. He favored it, he said, when there was no alternative. But encroachments on tradition, if avoidable, were fiercely resisted. Enlisted men were called Tommy Atkins because that was the name of the private Wellington had picked for a specimen signature on an army identity card. Officers drank wine, brandy, and whiskey, and Other Ranks drank gin and beer, because it had always been that way. Regulation bugle calls, though difficult for some buglers, were defended on the ground that they were quintessentially British, though in fact they had been composed by Franz Joseph Haydn.

*Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (pp. 317-319). (Function). Kindle Edition.*

It is clear that Sandhurst was the first time any spark of interest or ambition fired in the furnace of Churchill. There he dove into military formations, fortifications, and strategy. He became a top polo player.

His family had no money, and the costs of a Cavalryman were extensive. He sought to supplement his income by writing. Eager for action, he attached himself to the Spanish military in Cuba where it was busy putting down a rebel insurgency in 1895. He recorded his first exposure to combat and to Cuban cigars in a five-article series for the Daily Graphic, a London newspaper.

In 1896, he deployed for the first time with the British military to India (modern-day Pakistan) as part of the 4th Queen's Own Hussars. His book, The Story of the Malakand Field Force, about the campaign on the northwest frontier, became famous at home in England. He already grasped that fame through print was his ticket to politics and wealth.

Next he went to Sudan, where Kitchener reluctantly accepted him. The latter initially resisted the service of a soldier who was a casual war correspondent. While there, Winston participated in the charge at Omdurman, one of the last cavalry charges in military history.

Scrambling into their saddles, the massed lancers walked forward at a deliberate pace, stepping over the crisp desert toward the city, stirred by what Churchill called “a high state of excitement.” Presently they noticed, three hundred yards away and parallel to their course, a long row of blue-black objects, two or three yards apart. At that moment the bugles sounded Trot, and the regiment began to jingle and clatter across the front of these crouching dervishes. It was a lull in the battle. Except for the sound of the harnesses, silence was near perfect. Abruptly the Arabs broke it, firing a volley; three horses and several lancers toppled to the ground. Until then the colonel had intended to swing around the flank of the enemy riflemen, but now he decided to attack them head-on. The bugles sounded Right Wheel into Line. There was no further order. As Winston wrote Hamilton: “Gallop & Charge were understood.”85 In a solid line, the regiment lunged toward what appeared to be 150 dervish riflemen.

At this critical moment, Winston became preoccupied with a personal problem. He had every confidence in his gray polo pony, but until the regiment wheeled he, like the other officers, had been carrying a drawn sword. Because of his bad shoulder, he had decided early in the campaign that if hand-to-hand combat loomed, he would rely on his pistol. At full gallop, he had to return his sword to its scabbard and fumble for his wooden holster. He explained to Hamilton: “I drew my Mauser pistol—a ripper—and cocked it. Then I looked to my front. Instead of the 150 riflemen who were still blazing I saw a line nearly (in the middle)—12 deep… of closely jammed spearmen—all in a nullah with steep sloping sides 6 foot deep & 20 foot broad.”86 The lancers found themselves heading into a mob of nearly three thousand dervishes led by mounted emirs waving bright flags. What had happened? The Khalifa’s black flag, which had moved to within five hundred yards of this dry watercourse, should have told them. He had anticipated the flanking movement and reinforced the khor. Thus, the 310 shouting lancers, plunging furiously ahead in crescent formation, their overlapping flanks curving inward like the horns of a moon, their helmets bowed against the enemy musketry like the cuirassiers at Waterloo, were hurtling toward a wall of human flesh.

Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (pp. 398-399). (Function). Kindle Edition.

A year later, Churchill traveled to South Africa as a war correspondent in the Boer War. He joined an English reconnaissance mission on an armored train. It was ambushed. Though technically a civilian, Churchill fell back in the role of a soldier and organized a defense, but was overwhelmed and captured.

From a POW camp in Pretoria, he wrote letters to Boer government appealing for his release. It was granted, but before word could get to his camp, he had already escaped. He travelled 300 miles to safety, and wrote a bestseller about his journey when he returned to England.

All this by the age of 25.

Most politicians don’t serve in the military. Those who do often never see combat. Churchill was simply different. He loved being a soldier. He loved to fight.

And I believe this is why he was able to stand up to Adolf Hitler when the rest of the Britains leaders were so willing to appease.

When Britains prospects in the Boer War were looking slim, Queen Victoria commented, “Please understand that we are not interested in the possibilities of defeat. They do not exist.”

Churchill acted accordingly.

Neville Chamberlain, Hitler’s Best Pal

I now return to how Neville Chamberlain handed Europe to Adolf Hitler on a silver platter, hoping for a friendship in return.

It all started with the spiritual death of the British Empire in World War One.

In 1914, Britain went to war for honor. Prime Minister Asquith declared Britain had entered the war “to vindicate the principle of the public law of Europe”. Four years later, nearly 900,000 British and Commonwealth soldiers were dead.

We all know the scale of World War One’s slaughter, but you remember that in 1918 the public didn’t. They didn’t know about the trenches, or the gas, or the suicidal charges into machine guns.

Only in the early 1920s, when poets like Siegfried Sassoon and Wilfred Owen, and writers like Erich Maria Remarque — author of All Quiet on the Western Front — published their works, did people begin to grasp the scale of senseless slaughter.

Then came questions. Why did British commanders send 900,000 boys to their deaths? Were the Commonwealth nations really so wise to put their troops under the command of the Empire's?

This mood was captured in the famous Oxford Union debate of 1933, resolved: “This House will in no circumstances fight for King and Country.” It passed 275 to 153.

The populations and politicians of Britain and France were traumatized by the war and would do anything to avoid it again. This would become their undoing in the 1930s as they failed to check Hitler’s rise to power.

In 1928, the Nazi Party was still fringe, winning only 2.6% of the vote in Reichstag elections. Its leader, Adolf Hitler, a World War I veteran and failed painter, wrote Mein Kampf while in prison after the Beer Hall Putsch of 1923, blaming Germany’s loss in the Great War on Jews. Jews as a scapegoat was the core tenet of Nazism.

At the time, the German economy was propped up by American loans under the Dawes Plan. When the Great Depression hit in 1929, this financing collapsed and German living conditions plummeted. In that void, the Nazis exploited the suffering of the people. By July 1932, they had become the second-largest party in the Reichstag with 37% of the vote.

Hitler, aware that he needed power through superficially legitimate means, persuaded President Hindenburg to appoint him Chancellor in January 1933. Having achieved power democratically, he quickly destroyed democracy. Within months, the Reichstag Fire Decree and the Enabling Act gave him dictatorial authority.

In 1933, Hitler withdrew Germany from the League of Nations and the Geneva Disarmament Conference. Many observers regarded this not as belligerence but as a healthy assertion of national pride after Versailles.

In 1935, he announced the Luftwaffe and reintroduced conscription, raising 36 divisions — around 500,000 men. Britain and France protested, but Britain signed the “Anglo-German Naval Agreement", allowing Germany to build a navy up to 35% of Britain’s size.

In 1936, Hitler marched troops into the Rhineland, violating the Versailles and Locarno Treaties. France asked Britain for support to act; Britain refused. Germany later admitted that had they been challenged, they would have retreated.

That year, David Lloyd George, Britain Prime Minister during the great war, said of Hitler: “He is the greatest German of the age. He has restored the pride and honor of his people. One may dislike Hitler’s system and yet admire his patriotic achievement.”

After meeting Hitler in 1937, Lord Halifax, Britain’s Foreign Secretary, said: “We ought not to allow ourselves to be drawn into criticizing a country merely because its political philosophy differs from our own… Hitler is a great man.”

In 1938, Hitler annexed Austria. Tens of thousands of political opponents and Jews were arrested or killed in the aftermath.

Across the Atlantic, Joseph P. Kennedy, U.S. Ambassador to the U.K., remarked: “It is not that the Germans don’t want peace. They want peace, but on their own terms. And the terms are logical ones.” Charles Lindbergh added: “Hitler has accomplished results (good in addition to bad) which could hardly have been accomplished without him.”

That same year, Hitler demanded the Sudetenland, a fortified region of Czechoslovakia. France had an obligation to defend Czechoslovakia, but at Munich in September 1938, Britain, France, and Italy agreed to let Hitler have it. Neville Chamberlain returned to London proclaiming: “I believe it is peace for our time.”

On September 1, 1939, Hitler invaded Poland. Britain finally declared war, but its troops stayed in France. Though obligated by treaty to defend Poland, Britain did not.

Even after Chamberlain resigned and Winston became Prime Minister on May 10, 1940, the idea of appeasement lingered. When the British Army was trapped at Dunkirk, Lord Halifax explored back channels through Mussolini to negotiate with Hitler. Churchill rejected it outright.

This is where Churchill shined. The Victorian soldier would not accept defeat.

Manchester describes him speaking to the House of Commons in 1938:

For five years I have talked to the House on these matters—not with very great success. I have watched this famous island descending incontinently, fecklessly, the stairway which leads to a dark gulf. It is a fine broad stairway at the beginning, but after a bit the carpet ends. A little farther on there are only flagstones, and a little farther on still these break beneath your feet….136

Then, in measured tones: If mortal catastrophe should overtake the British Nation and the British Empire, historians a thousand years hence will still be baffled by the mystery of our affairs. They will never understand how it was that a victorious nation, with everything in hand, suffered themselves to be brought low, and to cast away all that they had gained by measureless sacrifice and absolute victory—gone with the wind! Now the victors are the vanquished, and those who threw down their arms and sued for an armistice are striding on to world mastery. That is the position—that is the terrible transformation that has taken place…. Now is the time at last to rouse the nation…. We should lay aside every hindrance and endeavour by uniting the whole force and spirit of our people to raise again a great British nation standing up before all the world; for such a nation, rising in its ancient vigour, can even at this hour save civilisation.

*Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (pp. 1857-1858). (Function). Kindle Edition.

From Tank to Atom Bomb in 30 Years

The speed with which the two world wars catalyzed the development of new technology that defines our modern world is dazzling.

In 1874, when Churchill was born, warfare was still the domain of horses, mounted infantry, and cannon. The British military harbored a deep conservatism about modern technology. Manchester writes of the European militaries prior to World War One.

No profession is more wedded to the folklore of the past than the armed services. Since the last major conflict on the Continent, technology had clanked out an astonishing array of contraptions suitable for war, and the generals and admirals of Europe, regardless of national allegiance, viewed them all with deep distrust. They belonged to that generation which called electricity “the electric,” and regarded it as newfangled. Being new was enough to make a device suspect. Haig thought the machine gun “a much over-rated weapon,” and believed “two per battalion should be sufficient.” Joffre of France refused to use a telephone, pretending that he did not “understand the mechanism.” The Stokes mortar was twice rejected at the British War Office and finally introduced by Lloyd George, who begged the money for it from an Indian maharaja and was as a consequence considered “ungentlemanly” by British officers. Kitchener dismissed the tank as a “toy.” It was, in fact, a pet project of Churchill’s.

Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (pp. 630-631). (Function). Kindle Edition.

It is hard for our technology-dominated age to imagine how, only a century ago, innovation could be resisted so completely. Yet the First World War brutally demonstrated its power. Long-range artillery, poison gas, and the machine gun combined to create static battle lines and horrific casualties. Infantry and cavalry charges, the tactics of the previous century, became suicidal. Four years of these futile tactics against modern technology left nearly 900,000 British, 1.4 million French, 2 million German, and 116,000 American soldiers dead.

By war’s end, the first glimpses of the next era appeared in the form of mechanized armor and aircraft. Churchill, then First Lord of the Admiralty (Britain’s Secretary of the Navy), championed the tank as early as 1915, hoping it would shield infantry from machine-gun fire. When tanks appeared late in the war, their impact was limited, but they pointed toward the future.

That future arrived in 1939, when Hitler unleashed the Blitzkrieg. German tanks, coordinated by radio and supported by aircraft, slashed through Belgium and France at breathtaking speed. In the First World War, armies measured progress in yards; in 1940, the Wehrmacht advanced hundreds of miles in days.

Aircraft, too, reshaped strategy. Hitler used bombers to pound London during the Blitz, while torpedo bombers rendered the battleship obsolete. In November 1940, British carrier-based torpedo bombers struck the Italian fleet at Taranto, crippling three battleships in their harbor. The Japanese studied this raid carefully before Pearl Harbor. The lesson was clear: a relatively cheap aircraft and torpedo could destroy a warship worth millions. The point was driven home at Pearl Harbor by the Japanese. Then again by the Americans at Midway in June 1942, when American dive bombers sank four Japanese carriers. This victory turned the tide of the Pacific War and opening the way for the island-hopping campaign toward Japan.

And as with the first world war, the second concluded with a preview of the technologies that would dominate the next conflict. In 1944, as Germany collapsed, London was struck by the V-2 rocket, hurtling in at 3,500 miles per hour, impossible to intercept. The precursor to the ICBM. In the skies above Berlin, Allied fighters encountered the Messerschmitt Me 262, the first jet fighter. It was 150mph faster than their P-51 mustangs.

Then came the atomic bomb. Jets, missiles, the atomic bomb - the quiver that defined the cold war were all created by 1945. And all via a history that showed new, lower cost technologies destroy old ones.

It foreshadows the role of drones in our modern battlefield. Will we live to see the a $15B aircraft carrier destroyed by a $100,000 drone swarm?

Roosevelt Fumbling the Russian Bear

It seems a universal truth that good people are good even to their enemies, whereas evil people are evil even to their friends.

In 1939, Stalin sent his Foreign Minister, Maxim Litvinov, to France and Britain to negotiate a mutual defense treaty against Germany. France was interested, but Britain, afraid of angering Hitler, stalled. After weeks of silence, Stalin dismissed Litvinov and sent Molotov to negotiate with Hitler instead. The result was the “Molotov–Ribbentrop Pact”, an evil agreement that split a future invaded Poland between the Nazis and the Soviets.

Stalin was convinced he had found an ally in Hitler. So much so that when the mustachioed German invaded the USSR in June 1941, Stalin did not believe the reports from his front line.

Only after the Wehrmacht had penetrated hundreds of miles into Soviet territory did Stalin accept that his ally had turned on him. Over the next four years, the Soviets bore the brunt of the war. Some 27 million Soviets — soldiers and civilians — were killed, the highest toll of any country.

Churchill was deeply skeptical of the Soviet regime. But he understand that “the enemy of my enemy is my friend.”

More eloquently, when Hitler invaded Russia he said, “If Hitler invaded Hell, I would at least make a favourable reference to the Devil in the House of Commons.”

When General Zhukov enveloped the Germans at Stalingrad, the momentum shifted permanently to Red Army, and Churchill, Roosevelt, and Stalin began to discuss the postwar map.

Churchill’s primary concern was that American forces would withdraw after defeating Hitler, leaving a weary British army to defend Europe against the much larger Soviet horde. One enemy swapped for another.

Roosevelt, in failing health, never sent Stalin a clear message that the United States cared about restoring pre-war European states. He often wrote to Stalin and met with him without Churchill, effectively sidelining the British Prime Minister. At Yalta, Roosevelt prioritized Soviet entry into the war against Japan over the political future of Eastern Europe — effectively conceding Stalin’s dominance in Poland, the Baltics, and beyond.

Manchester writes:

It was left to Roosevelt to utter perhaps the most important statement—or at least the statement most full of portent—of the conference. In what Churchill called a “momentous declaration,” Roosevelt volunteered during the first plenary session that he did not think American troops would stay on in Europe much longer than two years after Germany’s defeat. He had told Harriman much the same two years earlier, and had told Churchill several times in 1944. The statement was meant to diminish Stalin’s wariness of the West ganging up on him. It reconfirmed for Churchill his belief in the need for a strong France. To Stalin it also sent a clear message of indecision, if not weakness. It told Stalin that agreements made at Yalta depended on trust for their implementation but might be abrogated through force. To Eden it was another occasion when Roosevelt “mistakenly as I believe, moved out of step with us, influenced by his conviction that he could get better results with Stalin direct than could the three countries negotiating together. This was an illusion.”

Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (pp. 3914-3915). (Function). Kindle Edition.

Had Roosevelt seen the postwar Soviet threat as clearly as Churchill, perhaps Eastern Germany and Poland would have been spared 45 years of Soviet occupation. We so often reduce politicians to their policies that we forget the importance of their ambition and force of personality.

Stalin wanted Eastern Europe more than Roosevelt wanted to defend it, so he got it. Churchill said he would rather choke in a pool of his own blood than give way to Hitler. So Britain survived.

The Unfortunate Geography of Poland

Reading the Last Lion, I began to wonder if a country’s geography determines its fate more than most might think. Britain is an island nation that imports most of its good. It had little choice but to become a naval power and then, as a net importer develop a financial industry. The United States, is in a sense, Britain but with much larger landmass, more resources and, with the Atlantic, a much broader channel. By 1900, its own empire seemed destined to surpass Britain’s.

And then there are the unlucky countries. Chief among them the states between Germany and Russian. And chief among these is Poland.

This history of the Polish nation is an interesting one. For 800 years, the Kingdom of Poland reigned, until it was split up between Prussian, Austria, and Russia in the 18th century.

The Polish nation didn’t have a state until the treaty of Versailles, which created the second Polish republic. As is usually for a formerly stateless nation, the Poles were jubilant, and motivated. They fought of a Soviet invasion in 1920.

Fast forward to 1939 and Neville Chamberlain, after seeing Hitler invade Czechoslovakia has, after handing Europe to him on a silver platter, decided appeasement doesn’t work. So he signs a mutual defense treaty with Poland.

Shortly after, Hitler invades Poland and the brits do nothing. Their expeditionary force stays in France. They are forced to defend their Western frontier from the Nazis and, two weeks later their East from the Soviets. Unbeknownst to them, Hitler and Stalin had previously agreed to split up their country.

The Poles fight for a month, but then are overwhelmed by superior German aircraft and tanks. The Polish government goes into exile in London. Some of its best pilots fly on behalf of the RAF, where they shoot down more German airplanes during the war than any British squadron.

In 1940, the Soviets massacre 20,000 Polish officers in the Katyn forest. Churchill learns of it, but is advised not to bring it up with Stalin, who has the only land army engaging the Nazis.

As the war nears an end, Churchill begins to negotiate with Stalin about the restoration of the Polish state. But Roosevelt, who carried the bigger stick than his English ally, was indifferent. Manchester writes:

By July, the stasis in the west and the Soviet advance in the east served to highlight the need for the Big Three to convene. “When are we going to meet, and where?” Churchill cabled Roosevelt on July 16. A week later, when the Red Army took Lublin, Stalin established a Polish Committee of National Liberation there, in effect a puppet government. That made the need to meet critical. Churchill suggested Scotland to Roosevelt and Stalin, but as usual Stalin would not leave Russia, and Roosevelt was not about to travel to Britain during the American election season. He had just been nominated for a fourth term and had eased out Henry Wallace—seen by Democrat party regulars as too pro-Soviet—as vice president and put Missouri senator Harry S. Truman on the ticket. In reply to Churchill, Roosevelt suggested they meet in Bermuda or Quebec. Churchill, as usual, would have to go to Roosevelt. With the Red Army closing on Warsaw—it reached the eastern outskirts days later—Churchill insisted that Stanisław Mikołajczyk, the head of the London Poles, make straightaway for Moscow in order to take part in the formation of a Polish government. Otherwise, the London Poles might find themselves the odd men out when Stalin liberated Warsaw. Seeking a “fusion of some kind” between the Poles backed by Moscow and those backed by America and Britain, Churchill asked the president to send Mikołajczyk and Stalin a message stating his strong support for Mikołajczyk.

Roosevelt’s letters to the two, wherein he simply told them he hoped they “could work out the whole matter” between themselves, amounted to the mildest of endorsements of the London Poles, and a signal to Stalin and Mikołajczyk that the United States was not as keen as Britain regarding the fate of Poland.

Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (pp. 3853-3854). (Function). Kindle Edition.

After the war, Poland would go to the Soviets and remain behind the iron curtain until 1989. Today, Poland is once again under the threat of its increasingly belligerent neighbor to the East. May its governance, military, and economy make up for its lack of natural fortification.

Totalitarianism as Religion

There’s a French philosopher named Rene Girard who, simply speaking, argues that most religions are rooted in the sacrifice of the scapegoat.

In reading about how Stalin and Hitler forbade traditional religion, it became clear that their reason for doing so was to create their own: the religion of totalitarianism.

The founding scapegoat of Nazism was Jews. For the Soviets, it was the bourgeois. In the 20’s and 30’s, Soviet soldiers went around blowing up Churches. The Nazis tried to create a “Reich Church” , a perverted version of Protestantism that put the symbol of the swastika next to the cross, cast Jesus as an Aryan fighter against the Jews (wow), and rejected the old testament.

Portraits of both leaders abounded. People swore personal loyalty to them. The Nazi’s put on massive rallies with allies with banners, torches. These were designed to give provide the same communal ecstasy that religion did.

So to any atheist who looks back on 5,000 years of religion and thinks it is a negative, I would say this: humans will create religion whether it is traditional or not. The impulse cannot be erased. And the religions we create that worship people usually end with worse results than those that worship God.

Churchill was…Churchill

Everyone knows the story of the woman who called Churchill drunk. To which he retorted, “I may be drunk, but tomorrow I will be sober and you will still be ugly.”

Rude, but tickling. And truly, far too simple of a quip. Churchill was capable of much more.

Winston was the kind of chauvinist feminists love to hate. During his bachelor days, he and Eddie Marsh, his private secretary, would arrive early at a party and watch each lady make her entrance. Recalling “the face that launched a thousand ships,” Churchill would ask, “How many ships do you think she would launch?” Marsh would hazard, “Two hundred ships, or perhaps two hundred and fifty?” Winston would reply decisively: “By no means. A small gunboat at the most.” He complained that the United States “is too cluttered up with women. They are everywhere. They control eighty percent of the country’s wealth. They wield enormous power—and they bully their husbands.” The only person to succeed in frightening him was the American Mrs. O. H. P. Belmont, who always referred to him as “that dreadful man.” He growled that she was the least feminine woman he had ever met.

Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (pp. 520-521). (Function). Kindle Edition.

Churchill was against Indian self-rule. And when a American reported asked him, “What are you going to do about those wretched Indians?” he responded

“Before we proceed further let us get one thing clear. Are we talking about the brown Indians in India, who have multiplied alarmingly under benevolent British rule? Or are we talking about the Red Indians in America, who, I understand, are almost extinct?” Mrs. Reid was speechless. Roosevelt could not contain his laughter; it was the sort of awkward moment he relished.

Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (p. 3647). (Function). Kindle Edition.

And a final one. When Churchill was Head of the Admiralty, a naval commander accused him of impugning on the traditions of the Royal Navy.

“And what are they?” asked Winston. “I shall tell you in three words. Rum, sodomy, and the lash. Good morning, gentlemen.”

Reid, Paul; Manchester, William. The Last Lion Box Set: Winston Spencer Churchill, 1874 - 1965 (p. 630). (Function). Kindle Edition.

Onward.

Not literally, of course, although it is quite de rigueur for the billionaire to attain, via multitudes of trainers and nutritionists, the physique of the endless summer seeker.

They surf markets. They wait in placid water, squinting for a swell. As one comes close, they start paddling. The lucky ones catch the wave, stand and surf it to shore.

Consider the following waves of the last 50 years:

• The rise of personal computing

  • Wave: Half a million PC’s in use worldwide in 1975. 2,300M (2.3B) in 2025. 18% annual growth.

  • Proximity to Saturation (users vs. global population) - Close

  • Best Surfers: Microsoft, Intel, Apple

• The rise of the internet

  • Wave: 16M people used the internet in 1995. Today 5,640M (5.6B) do. 21.6% annual growth rate

  • Proximity to Saturation (users vs. global population) - Close

  • Best Surfers: Facebook, Netflix, Amazon, Apple,

• The rise of cryptocurrency

  • Wave: 5M people held crypto in 2015 and BTC was worth $230. In 2025, 700M people hold crypto and BTC is worth $120k. 64% annual growth rate in # of crypto users. 81% annual growth rate in BTC price.

  • Proximity to Saturation (users vs. global population) - Not close

  • Best Surfers: BTC, ETH, Solana, Coinbase, Paradigm

• The rise of AI

  • Wave: 5M people use ChatGPT in December 2022. In April 2025, ChatGPT has 800M weekly users. 780% annual growth rate.

  • Proximity to Saturation (users vs. global population) - Not close

  • Best Surfers: OpenAI, Microsoft, Google

Anyone who spotted the above waves when they were swells, caught them (by owning or creating a related asset), and stayed on them (by not selling) long enough for everyone to conclude, “that’s a sick wave”, is very rich.

Once the wave is formed, everyone agrees it's real. But sitting there in flat water waiting for the swell requires an immense amount of tenacity. The surfers of capitalism, like their literal brethren, often have a healthy disregard of what the non-surfer world thinks of them.

In 1977, the CEO of DEC, the largest manufacturer or mainframe computers said, “There is no reason for any individual to have a computer in their home.”

In 1995, Bob Metcalfe, the creator of ethernet, predicted that the internet would “collapse” in 1996. He famously later ate his words by putting the article where he made this statement into a blender and drinking it.

In 2017, Jamie Dimon, CEO of Chase, the largest bank in the United States said that bitcoin is “a fraud … worse than tulip bulbs … it won’t end well.”

The surfers of capitalism stick to the wave even when the most authoritative figures in the world tell them they are wasting their time. And capitalist waves, unlike real ones, can to suddenly fall apart and then a year later come back together.

It is almost always that case that if you are sufficiently early to a wave, your friends and family will be deeply concerned about you and you will be dismissed by peers climbing a conventional career path. This is what it felt like to own crypto in 2015.

Ask yourself what markets will be 100x bigger in 2035. Write down why you think so and what underlying assumptions would have to change for you to alter your conclusions. Enter the market, and when it looks like all hope is lost, as it inevitably will, consult the aforementioned documents and hold on. Entering a market is an exercise is logic. Staying in it is one of nerves.

World War Two gave way to the cold war, when the U.S. lived in fear of nuclear attack. In April 1963, the Soviet Union fueled missiles to launch in Cuba. In 1974, the president resigned after the public leaned spied on his political opponents.

I imagine at each of the above moments, there were a number of experts who predicted the imminent demise of the United States. Yet here we are.

Again, the experts predict demise. Their case:

• Democracy - It is not clear whether Trump will try to stay beyond his second term. This makes him authoritarian.

• Geopolitics - The American nuclear umbrella is can no longer be taken for granted. Western Europe and Asia will build nuclear weapons. More nations with nuclear weapons mean a higher chances of nuclear war.

• Economy - Trump’s whiplash fiscal policy, included tariffs, will slow growth. Tariffs will drive inflation, resulting in stagflation.

And then there’s the meta-argument which is that American democracy is over just because Trump was elected. Less his willingness to tank the economy for tariffs, Trump authoritarianism, foreign policy, economic positions, and willingness to use the office to enrich his family, is all as advertised. And he won overwhelmingly.

So what does it say about the country that Trump won the popular vote? Or rather: what does it say about the democrats - the supposed guardians of democracy in the face of this authoritarian - that they lost the popular vote?

The democrats lost for a few reasons, but I think foremost, they lied to the people. Notably about the origin of COVID and about Biden’s mental condition. These lies were so bold-faced, it was so obvious that Biden was senile when he debated Trump, that they betrayed a contempt for the intelligence of the American people.

"The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command.” Perhaps in Orwell’s 1984. But not in America.

Harris then missed the opportunity to take accountability for this deception. She also missed the opportunity to clearly appeal to the center and isolate the progressive left. Trump then cast the democrats as a party that cared more about equity for Hamas, and trans rights, than about rising cost of food and decay in American cities.

It is hard to imagine how the democrats could have put together a less inspiring or coherent platform in 2024. Perhaps its members cared more about getting their turn to run for office than about serving the people.

And now they talk about demise. Maybe. But the USA has made it this far, and I think it’ll keep going. And if they - the democrats or whatever party springs from their ashes - really think the end is near, I hope they will combine their paranoia with sweat and talent to field a better candidate in 2028. Let 2024 be their Sputnik moment. The nation will be better for it.

This is hard to do because coming up with an original thought is like developing a recipe. You need to find all the right ingredients, put ‘em together, usually it doesn’t work the first time, then you refine, and then you have something you like. Ideally you have other people taste it, they tell you it sucks, you fix it, etc. It takes time, which most people don’t have.

It’s easier to eat out.

It’s also easier to be agreeable. And if you read the New York Times, you’ll have all the right talking points to win at the liberal outrage game with your Brooklyn friends and if you watch Fox News, you’ll have all the details of the latest crime by a Venezuelan illegal immigrant to keep the party going in Orange County.

This is fine for the vast majority of people. For probably 99.9% of people, the goal of social interaction is to feel validated and the highway to do that is to sing the right song for your tribe.

It’s also the best way to be completely average.

You would think that this would be different in business, where it obviously pays to disagree. Everyone is aware of the 2x2 matrix with wrong/right written horizontally and consensus/non-consensus vertically. Consensus/right gets you average results. You might as well put your money in a total market index fund. Non-Consensus/right is how you get rich.

But there are still Harvard grads running to be venture capitalists because it was a good way to make money in the past. And to start software companies because these were good businesses in the past. Prestige is just the Ivy League word for consensus.

But I digress. Here are a few of my favorite lens’ to see clearly despite the enormous dust cloud kicked up by the human herd.

1. Always understand the incentive.

• Mainstream journalists are paid to write articles that get people to read them.

• Venture capitalists tweet about business so that founders hear about them and take their money and so that LP’s hear about them and give them money.

• Warren Buffet writes annual letters because he has a responsibility to update investors.

• It’s nearly impossible to find Stanley Druckenmiller’s annual letters (because he doesn’t want the world to know how he makes such great returns)

2. Think in terms of hypotheses with probabilities. Personally, I think there’s a 75% chance Trump’s tariffs will lead to stagflation. But I don’t know that much about tariffs, so there’s a decent chance I’m wrong.

3. Every hypothesis should be falsifiable. If inflation doesn’t go up after tariffs, I will have been wrong.

4. #3 bears repeating. If you believe something to be true, you should instantly be able to articulate what evidence would change your mind.

5. Beware easily discovered information. The internet knows who you are feeds you a diet of agreeable nonsense. Quality information requires digging.

6. Quantify everything.

7. When someone has figured out a great way of getting rich, they won’t tell you about it.

1-7 are easier said than done. Have a group of colleagues or friends who will do you the rare favor of disagreeing with you so that may be right in the long run.

I had just graduated from Yale and was touring China with a friend. The flat was his parents’. They had both had successful careers in finance.

We were talking about our futures and my friend ask me, “how much money do you want to have when you’re 30?”

“I think it would be great if I could make $300,000 a year,” I said.

His eyes turned wide. “$300,000 is nothing. I want to be worth 100 million dollars.”

I didn’t know how to respond. The amount didn’t make sense. I didn’t now why someone would want $100 million. Or even $10 million. What they’d do with it. Or how they’d get it.

We had spent most of our four years at Yale together studying cramming for our exams and foolishly putting our Ivy League brains at risk outside the classroom. Yet despite all our shared experiences, this moment revealed vastly different perspectives on financial success.

And thirteen years later, it’s clear to me why. Capitalism runs in the family.

Which is to simply say that school, even a school as good as Yale, does not teach the strategy nor the tactics nor the tradecraft to be successful at capitalism. These are secrets passed down from parent to child.

My parents - refugees from the Soviet Union - carried an immense wealth of knowledge in literature, music, and mathematics out of the iron curtain, but their knowledge of capitalism was non-existent. Arguably negative.

In the 13 years since this conversation, I’ve been fortunate to be a little successful at capitalism. I’m going to publish the most important lessons I’ve learned. Below is the first one. I hope they’ll be helpful to young people - especially immigrants and first generation Americans - who don’t have the privilege of a parent who can teach them.

#1 Respect the Game

We all grow up in a little communism, with our parents as the dear leader fairly allocating resource to their beloved children. It works because families, compared to nations, are miniscule.

In college, many Americans are educated by people who never successful in capitalism. In fact, academia - the game which they won to win their spot as professors is in many ways the opposite of capitalism. And, nowadays, they are likely to teach that capitalism is evil.

In college, you are likely to drink up this marxist kool-aid and channel your youthful desire to fight into activism. The degree to which the aforementioned is true is largely a function of whether you study the humanities or STEM. If you study the latter, you will learn that your differential equations class is hard and not everyone can get an A. If you study the former, you might need more time to learn how rare it is and how much effort it takes to win. Athletes, by the way, have the gift of intuitively understanding this from an early age. A great team has the same dynamics whether it’s writing software, buying stocks, or playing basketball.

Opponents of American capitalism will point out its flaws. Healthcare costs are high. It’s hard to buy a home. All true. But it’s easy to critique and hard to create. There’s no denying that American Capitalism, relatively laissez faire but refereed by the state, is the best system for creating wealth *not just for it’s citizens but all the people within it* in all of human history. People from all over the world fight tooth and nail to come here and build a better life.

Conversely, nations that are built on virtuous sounding principles like fairness have had very different outcomes. The Soviet Union, in its effort to bring its people the gift of equality, killed 60M of them. China followed a similar path.

To paraphrase Churchill, capitalism is the worst system, except for all the others.

I saw it again, and this time noted the title: “Cain Velasquez, UFC Fighter”. Typo, I thought. That’s Jocko.

But the third time I paused and zoomed in. Indeed this was a different bald mesomorph. Not Jocko. And then it dawned on me.

These guys all look the same.

Jocko, Cain, Joe Rogan, Dana White. Optimized for the UFC cage, the modern coliseum. Bald so nobody can grab the hair. Built to win the fight. I imagine that 2100 years ago the gladiators of Rome looked the same.

I think it’s pretty interesting that one of these gladiators - Rogan - is so popular now. He brings great people onto his show, but I find him hard to listen to. In an early Elon Musk interview, he insisted that there must be a way to create a self-sustaining electric car covered in solar panels. Musk explained that not enough solar energy hits the surface of the car. Then Rogan insisted there must be a way and Musk replied there’s not enough surface area, then again. And again.

A similar exchange occured in an interview with Peter Thiel, in which Rogan insisted that the pyramids were an ancient chemical power-plant. Thiel responded that he was more interested in why the pyramids were built than how and expounded on his favorite theory that all pre-christian religions are founded on murder of scapegoats. But “how,” Joe refrained. The rocks are so big! And on and on.

I think this sort of questioning could be one of the reasons why Joe is so popular. He questions everything. He doesn’t take the government’s word for granted. There is an irreverence for expert opinion. All of which are prerequisites for original thought.

But though he rejects the consensus view, he lacks the ability to create his own compelling one. The fact that there’s not enough solar energy hitting the surface of a car to charge it during the day is a physical truth. Get a high-school physics textbook and work it out.

And simply because we don’t know how the pyramids were built does not mean every explanation we come up for how they were is equally valid. Maybe the aliens helped, maybe the rocks were levitated via energy from a chemical power-plant, maybe a race of super strong ancient UFC fighters did it.

What Joe misses is that any theory without evidence and therefore without a way to be disproven might as well be religion. If Aliens did it, God might as well have.

Maybe Joe represents where we are as a nation in terms of our critical thinking ability. We were lied to about COVID, about Biden’s mental state, about the Kennedy assassination. We know there are more lies we haven’t uncovered yet. But doubting everything is easy. As easy as believing everything. Thinking through what is actually likely to be true is the hard part.

If you were paying attention at the time, like him, you’d realize A) the number of semiconductors on a chip was doubling every two years B) you could use back of the envelope math to figure out when the count would reach millions and billions. This is what was so cool about tech investing in the silicon stack: the roadmap was clear and the beat of progress exponential.

The unlock in the above thinking is figuring out what set to surf (Moore’s law) and where it’s waves are going to break, again, and again, and again: desktop computer, GUI, internet, video calls, smartphone etc.

Of late, are a couple of fields where folks did this:

* number of computers with internet

* number of smartphone in people’s hands

* number of people with btc wallet.

And there are a several new exciting ones:

- number of satellites launched per year

- number of qubits in a quantum computer

- $ to put a kg into orbit

- cost to train an AI model

But the items in the above list are not perfect comparisons to Moore’s law because they are only accessible to players with massive amounts of capital. SpaceX is the only company affecting # of satellites in orbit/$ to put a kg in orbit. To make just one qubit you need a lab at absolute zero (maybe this takes less $ than I think but it seems capital intensive ).

Cost to train a model is probably the only one accessible to guys and gals in a garage. That’s why deepseek is so exciting. If the $6M claim is true.

There are also areas that are distinctly unexciting. Like biotech, which people joke follows eroom’s law (Moore’s law backward) because new drugs cost 10x what old drugs did.

So when you’re betting on a trend with your time as a founder or with $$ as an investor, you gotta think about:

- is this business riding some sort of wave of innovation that follows an exponential curve

- can this trend open my eyes to applications ten and 20 years from now

- is this wave accessible to startups or do you need a massive amount of capital to participate

The vast majority of our clients are on prescriptions. And the vast majority of these prescriptions are for heart disease (statins), pre-diabetes (metformin), or type-2 diabetes (insulin). There are of course subpopulations that buck this trend. East Asians and Californians are take far less prescriptions than general population.

The common denominator of all the aforementioned conditions - atherosclerosis and type 2 diabetes is that they are a function of behavior. If you smoke or drink or eat too much or eat too much sugar and don’t exercise, you’ll likely have one of them. And it turns out, nearly half of Americans do. Of the 334M Americans, 134M are obese, 100M have pre-diabetes, and 38M have diabetes. 30M have some form of atherosclerosis.

The United States is sick.

People are dying earlier than they need to. They are living worse lives. And the government is paying $1.5T a year to take care of them.

I’m a big free markets guy, but this is an obvious case for government invervention. As a society, when presenting with the metaphorical cookie - whether it’s fruit loops, or soda, or hoho’s - we are unable to put it down. We eat it. And the poorer we are, the more we eat of it.

There should be a soda ban and a sugared cereal ban, and a hoho’s ban, and a Twinkie’s ban, and a candy bars ban.

Forget the war on drugs, we need to wage war on sugar.

100 years from now, people will look on our sugar consumption with was much disgust as we view the meat products in Upton Sinclair’s The Jungle.

You’d need massive political capital to enact these bans, because making sugar food is a huge business and so is selling pills to people who eat too much of it.

RFK, you’re up.

There is something different about Sheridan’s work. Protaganist in his show are strong - men and women alike. They laugh at the progressive propaganda of clean energy and pronouns. Not everyone lives happily ever after. In 1883, a prequel to Yellowstone, the main character’s daughter meets a tragic end when an Indian shoots a manure-tipped arrow through her liver. Where she dies, the father builds the first Dutton ranch.

There is something uniquely American and uniquely inspiring about the work of Sheridan. Settlers go west to build a better life for themselves. Montana ranchers fight Indians and outsiders from taking their family’s land. A ruined oil man makes his way as a general manager of an independent oil producer. An elite team of mostly female CIA operatives slice cartel throats in the middle of the night.

These are shows where tough men and women fight to make a better life for themselves, their family, and their country, against the backdrop of Americana. They don’t always make it. And they are never nice.

And people dig it. Because - and this is something the democrats forgot in ’24 - most people would rather see themselves as a Sheridanic hero instead of a member of an oppressed class demanding reparations. Indeed, it’s hard not to view Sheridan’s success as a bellwether of Trump’s return.

Here’s to riding horses on the open plains, catching terrorists, and making American the #1 oil exporter in the world.

The rate of innovation is staggering. And differential calculus provides a quantitative way to think about it.

The first step to quantifying innovation is defining the Innovation Metric. The above examples - # transistors/chip, $ to put a kg into orbit, and cost to sequence a genome, are all good example.

With a defined innovation metric, consider the following nomenclature:

• Innovation - New technology that demonstrates progress within the metric. For example, the Pentium III processor was groundbreaking in 1999, because it had 9.5M transistors on a chip.

• Innovation Curve - Innovations plotted on a chart with the innovation metric on the y-axis and time on the x-axis.

• Innovation Velocity - the rate of change of the Innovation Curve

• Innovation Acceleration - the rate of change of the Innovation Velocity curve.

In differential calculus terms, the last two are just the first and second derivatives of the Innovation curve.

Perhaps the best known innovation curve is the number of transistors on a microchip. See transistor count plotted by year as well as the expected count based on Moore’s law (a doubling every two years):

The Innovation Velocity is so blistering that progress before the last ten years cannot be viewed on a linear scale. Consider a logarithmic one:

There are several observations worth making here:

• The Innovation Velocity is exponential over an extremely short time scale, which is correlated to immense value creation. Silicon Valley exists because of this Innovation Curve and all the others spawned by it.

• The Innovation Acceleration is decreasing. Transistor count obeyed Moore’s law for most of the forty years since 1970. But it’s grown at a slower rate over the last ten years. This is because the size of transistors is approaching the size of the electrons they store. Most Innovation Acceleration curves have an asymptote defined by a physical constraint.

• The Innovation Metric is well chosen. It is not, for example, transistors per square foot (which might have made sense when computers took up rooms) because real estate has never been a limit on computing power.

• It’s highly predicable. Moore’s law was coined in 1975 and held true for 35 years. This predictability allowed for engineers in 70’s to predict the GUI, the mouse, personal computer, iPhone, the internet, and Zoom. See Arther C Clarke in 1964 and Doug Engelbart’s Mother of All Demos (MOAD) in 1968. Semiconductor sales people like Don Valentine and John Doer were able to start massively successful VC firms by betting on Moore’s law. Perhaps the best way to successfully invest and build is to identify an exponentially growing Innovation Curve.

Now consider a very different Innovation Curve: the cost to get a kilogram into low-earth orbit.

This chart looks nothing like the previous one. Firstly, wow, the shuttle was expensive! Secondly, there is no clear trend. But consider that before SpaceX, all space vehicles were built by via cost-plus contracts. This means SpaceX is the first rocket company in human history that cared about costs. Let’s look at the progression of their $/kg in LEO.

Now this is interesting. There’s exponential Innovation Velocity here. Analysts estimates that by 2040, the $/KG to LEO might be between $30 and $300. Assuming rocket re-use, the asymptote for this Innovation Metric is primarily a function of the cost of rocket fuel. In differential terms:

• The Innovation Velocity of the $/KG to LEO is exponential

• The Innovation Acceleration is best case increasing, conservative case constant. We are not close to the physical constraints.

This Innovation Curve lays plain the opportunity of space that SpaceX is only scratching the surface of. Getting to $30/kg to LEO will require new materials, new production methods, new software. There are fascinating applications that become cost-effective once $/KG to LEO approaches tens of dollars, only slightly more than it costs to ship a KG internationally. For example:

• Amazon warehouses in space that can ship to anywhere on the planet in hours.

• Space factories building products that can only be made in zero-gravity

• Space factories synthesizing fuel for interstellar travel.

• Travel anywhere on the planet in an hour

• A space elevator

• Company or person specific satellites. “On-prem” for space.

The $/KG to LEO is just one of the Innovation Metrics with potential exponential acceleration. Others are cost to sequence a genome.

Generating wealth from technology is a simple as betting on on an innovation curve. That it’ll accelerate and you’ll be part of the bounty.

The next innocation curve is happening today and if you wait to read about it in a textbook, all the fun will be over.