"Not Even Wrong" Podcast
Investing in fundamentally new concepts and engineering practices with large impact.

Episode March 1, 2021

Treasury market turmoil is caused by plumbing issues in the treasury market. Discussing podcast "Macro Musings" episode with Pat Parkinson. There are too many treasury securities going through the system and brokers cannot take that much paper due to balance sheet constraints. This is reminiscent of March 2020. However, there is a deeper problem in the financial markets caused by too much borrowing and repoing by hedge funds.

Episode February 28 , 2021

Value investing is a concept with constraints. One is, you only invest in companies with predictable cash flows. The second is, you want the intrinsic value to be above market value. This implies that humans are better at judging future cash flows than the market. It also makes it impossible to invest in companies with non linear  cash flows and rapid growth in outer years. Both constraints are limits to wealth creation.

Episode February 26 , 2021

Podcast discussion. Bio Eats World by a16z, conversation between Vijay Pande and Jeniffer Doudna. Two key take aways. Doudna says that delivery is still unsolved in Crispr tech. Pande says, focussing on regenerative solutions where biology follows biology to solve problems in areas like health, energy or material science.Two new focus areas. Quantum computing and blockchain technology.

Episode February 25 , 2021II

Blockchain technology is the building block of internet 2.0 with trust and identity embedded in underlying protocols of the network. Today Christie's is auctioning a piece of digital art that is tied to an NFT, a non fungible token. That is a smart contract within the Etherum blockchain network that proves uniqueness, proof of origin and identity. Great example of application of smart contract within decentralized trust network that offers real value to real world users. Identity + Trust = Internet 2.0

 

Episode February 25 , 2021

Largest drawdown in history of fund. Bond market jitters create havoc. We attribute the bond selloff to mal functioning of the primary dealer treasury market. It will be fixed. That's a good thing. Short term volatility is to be expected. Our goal is to hold as many shares of our portfolio companies a possible.

Episode February 24 , 2021

The ARK Invest effect. One player with too much marketing and leverage over stocks. It's a nuisance. You never walk alone, or in more formal terms, the Modigliani–Miller theorem states that the volatility of a stock eventually depends on the behavior of investors, not the company and not the capital structure of the company. We certainly feel that with Tesla and the Crispr stocks. Should we adapt our mission statement to reflect opportunities in macro?

Episode February 23 , 2021

Podcast discussion Michael Levin at Sean Carroll's Mindscape. Living organisms are a collection of information processing individual agents with individual goal seeking autonomy. They are orchestrated by top down bioelectric signaling.  What is a robot? What is a machine? What is a machine equipped with human brain cells? When new innovations take hold we lack words to describe. Same applies to Crispr and Tesla.

Episode February 22 , 2021

Large drawdown. Growth stocks yield do oil stocks. Steeper US yield curve signals recovery. Focus shifts from PE to E. Long USD against emerging markets currencies. Fed is being tested by markets, how much inflation will they really tolerate?

Episode February 21 , 2021

We decided to work on a new investment theme. Etherum protocol as base for a new kind of social internet with identity and trust embedded in the protocol and getting better with usage. Applications in finance and accreditation in education come to mind, since identity and trust are key. This is internet 2.0 with Etherum as base protocol.

Episode February 12 , 2021

Book discussion "Brave New World" by Aldous Huxley. Contrast with Orwell's 1984. Both books paint a dystopian picture of society. Huxley's description of a monopolistic scientific dictatorship forging consumerism and addiction to instant gratification and psychedelics is closer to today's reality. But both authors miss the mark. They neglect the pursuit of knowledge and creativity inherent in Western society and the innate rebellion against authority.

Episode February 11 , 2021

The anatomy of disruption. Pacific Bioscience and Twist Bioscience. Create new markets where there is no demand yet, because the markets don't even exist. Then grow and conquer existing markets. Long-read genome sequencing in case of PacBio and antibody engineering at scale for Twist.

Episode February 10 , 2021 II

Book discussion. "Something Deeply Hidden" by Sean Carroll. The key insight is that reality can be derived from the theory of quantum mechanics. If you stick with the Schroedinger equation and its predictions you can derive things like spacetime, space and super position. The key is to follow the theory and not fit the theory to what we perceive. This is first principles thinking from a first principles kind of guy.

Episode February 10 , 2021

If you wrote a software to create a company that maximizes wealth, would you include the financial markets as a relevant variable? No. Capital is part of the supply chain, like steal, labor or electricity. Investors, like other suppliers, grow with the company at the rate of compound real sales growth, that is, sales growth minus inflation.

Episode February 9 , 2021

Principles are most useful when they are easiest to ignore. This is our answer to why we did not invest in BTC, even though there was money to be made. We stick to our principle stack by investing in companies that apply fundamentally new concepts and engineering practices with large impact. BTC does not fit that.

Episode February 8 , 2021

Rapid innovation depends on the cost of iteration. The lower the cost of iteration, the faster companies can innovate. Tesla is iterating on FSP MIC Battery and jeopardizing its European brand value. Cost of iteration depends on competitive pressure. The more competition the higher the cost of iteration. That's why Tesla has to ward off competition.

 

Episode February 7 , 2021 II

Rapid innovation depends on the cost of iteration. The lower the cost of iteration, the faster companies can innovate. Tesla is iterating on FSP MIC Battery and jeopardizing its European brand value. Cost of iteration depends on competitive pressure. The more competition the higher the cost of iteration. That's why Tesla has to ward off competition.

Episode February 7 , 2021

How to organize a company to optimize for wealth generation? 1/3 Build an innovation stack to enable compound knowledge and rapid iteration 2/3 Decentralize problem solving to the most relevant levels of the organization and 3/3 Formulate a relevant and exciting mission with large impact.

Episode February 5 , 2021

Tesla update. Discussing questions on 1/5 What does it mean to reach industry leading margins, which industry? 2/5 What are you doing about Chinese competition 3/5 What does it mean to "get solar cost structure right" 4/5 Is Quantumscape a threat and 5/5 How will you transition into the 4680 architecture?

Episode February 4 , 2021

Accion Systems applies fundamentally new concepts and engineering practices in space propulsion. They're building an innovations stack that could one day lead to Mars. This kind of impact and potential wealth generation matches our purpose.

 

Episode February 3 , 2021

New ideas in space and quantum computing. We are looking for the convergence of academic achievements, advances in engineering and entrepreneurial ingenuity. Example Accion Systems in the area of space mobility. Carbon sequestration for oxygen production in space. 

Episode February 1 , 2021

Elon Musk appearance @Clubhouse was shallow. Three questions we'd like to ask next time 1/3 Why is Space X not going public 2/3 What are you going to do about Chinese EV disruptors and 3/3 Why do you let VW CEO troll you and spread misleading information about EV sales in Europe? Get a degree in material science.

Episode January 31, 2021

Book discussion "My Year of Rest and Relaxation" by Ottessa Moshfegh. A novel about existential forces driving humans towards purpose or death. Witty, creative and fun. Ottessa is a verbal Black Belt JiuJitsu.

Episode January 30, 2021

Social train wreck $GME. Algorithmically driven behavior in financial markets coupled with archaic short selling rules and eat or be eaten behavior by hedge funds and/or market makers result in bad pricing. This is just another evolution of algorithmic trading. The results are distorted short term pricing and volume information in equity markets.

Episode January 29, 2021

Markets are in turmoil due to technical difficulties in the retail brokerage sector. The problem is leverage. It will wash out and create volatility. Our portfolio companies have strong fundamentals. Key in times like this is to manage leverage and make sure we continue to reap the results of compound growth.

Episode January 28, 2021 II

Short Squeeze on several stocks creates havoc in financial markets. Lesson for professional short sellers is, don't shit where you eat. Short selling has become a game of narratives and persuasion, very much like politics or art. It shouldn't be like that. This is the backlash.

Episode January 28, 2021

Tesla earnings for Q4 2020. Automotive Gross Margin is soft. CFO explains why. One discrepancy in the company communication is they talk about industry leading margins. What industry? Are they an industrial company or a tech company?

Episode January 25, 2021

Why do so few Americans own Amazon shares worth 1Mio. or more while they're happy customers? It's because we are not good at understanding compound interest. It's something that only recently happened. For millions of years humans have grown little if anything at all. For the past 300 years exponential growth has become possible.

Episode January 24, 2021

Book discussion "Coffeeland" by Augustine Sedgewick. A history of coffee and its world economic significance through the lens of a coffee planter in El Salvador. Perils of monocultures. This doesn't just apply to coffee. It also applies to Silicon Valley.

Episode January 22, 2021 II

Why do some companies succeed with difficult engineering projects, such as Tesla? Why do some fail, such as Google X with Loon and others? The answer lies in the mechanics of progress. It's the combination of creativity with Popperian criticism or constant iteration. The lack of self criticism impedes progress.

Episode January 22, 2021 I

Taxing wealth is like taking out the soul of the American Dream. Longterm wealth creation is what this country was built on. President Biden must not impede this mission with short term thinking.Please do the right thing.

 

Episode January 21, 2021

Some market participants are blaming the Fed for missing out on the market rally. Too much risk appetite due to high liquidity in the markt. This is precisely what the Fed wanted. Blaming the Fed is pointing at "Them" instead of taking responsibility for own strategy. We focus on fundamental prospects of portfolio companies.

Episode January 20, 2021

How should a hedge fund be paid? Take a percentage of profits. The concept of carry goes way back to the whaling industry and works because it allows for skin in the game. This conversation goes much further as it relates to the alignment problem.

Episode January 19, 2021

The mechanics of wealth generation. Creative solutions to new problems coupled with Popperian criticism. Replace concepts and engineering practices with better ones. The same applies to science and society at large. This is one of the key principles we derive from "The Beginning of Infinity".

Episode January 17, 2021

Discussing the book "Ask your Developer" by Jeff Lawson, CEO and founder of Twillio. Software is big business because the supply chain of software is built out. Developers are work horses of the software economy. Focus on them and you have better success. How is Tesla doing with their developer focus?

Episode January 14, 2021

Why philosophy of investing matters. It's because you need to answer the question, "what should I do next". In our case we focus on new concepts and engineering practices. Best place to start is with academia. Another interesting idea is that the value of resources is a function of knowledge. You can analyze the value of companies by the type of resources they are using.

Episode January 13, 2021

Intel appoints new CEO Pat Gelsinger. We like the replacement of Bob Swan, but we don't like the choice of the board. Gelsinger is an acronym CEO and lacks clarity and direction. VMW has done worse than INTC in the past 2 years, so how will he be the person for the turnaround? INTC is stuck in inertia and denial.

Episode January 12, 2021 II

An interview with Paul Dabrowski, CEO of Synthego on why Crispr technology is poised for a productive future and what the implications are for healthcare, pharmaceuticals and medicine. Key is the merger of software engineering with life sciences.

 

Episode January 12, 2021

Why do we accept clients. Other than commercial reasons, the main argument for customers is to retain sharpness, accountability and focus.

 

Episode January 11, 2021 II

Our two contrarian calls for 2021. 1/2 US is going to have moderate inflation in coming 5-8 years. 2/2 China is not nearly as far advanced in AI as many in the West think. Implications for Tesla and Chinese competition. Tesla is far ahead in AI.

Episode January 11, 2021

What happens when a key employee leaves the company. In short, nothing. It's even a good sign, since a fast growing disruptor should be adjusting the talent base frequently. The challenge is to balance agility with stability. Example Editas, CSO leaving.