Dear Friends,
Growing up, I associated Thanksgiving with stress and conflict. And so now, even as a card-carrying adult, I struggle to associate it with gratitude and good vibes.
Fortunately, one of the great perks of traveling is to return to the little things that I too often take for granted: my favorite coffee mug, looking up from the newspaper at my wife’s loving eyes, snuggling with my dog, catching up with an old friend while running alongside the glassy water of the Berkeley marina under the soft winter sun. With or without Thanksgiving, there is much to fill me with gratitude, including the kind responses and fun conversations that have emerged from this newsletter. So, thank you.
💸 A calculated risk
On Saturday, I sold my remaining bitcoin, suffering a loss of around $600. The same day, I purchased a new winter cycling jersey for $150. It’s a bummer to drop $150 when you just lost $600. Then again, I was extraordinarily lucky with my bitcoin investments. I invested $14k in bitcoin in 2020 and easily could have lost it all. Instead, I sold most of it in late 2021 when it felt like the hype machine was going into overdrive, and ended up making $24k.
In retrospect, it’s always tempting to claim credit for lucky investments. Like, I must have had some special intuition that crypto was reaching peak hype and so sold it off at just the right time. I can guarantee you, I had no such special intuition. It was pure luck. As you can see in the chart below, for the majority of the past two years, my stock investments (the purple line) were underperforming the Nasdaq index. Then the tech bubble burst and now my investments are outperforming. But let’s revisit this graph in a couple of years and I bet that I’ll be underperforming once again. If you give it enough time, we almost all underperform the market.
There have been many winners and losers in the burst of the “everything bubble” over the past year. Zuckerberg lost $90 billion. Elon and Bezos each lost $66B. But no one made and lost more money more quickly than Sam Bankman-Fried, who was worth $26B in March, $16B at the start of the month, and $0B today.
Investing is, ultimately, a game of risk, reward, and probability. The bigger the risk you’re willing to take, the bigger the potential reward, and the higher the chance that you lose it all. Sam Bankman-Fried’s life philosophy is that most people are too risk-averse. One of his favorite examples from interviews is that if most people were offered a 100% chance of $1 million, or a 10% chance of $15 million, they would choose the former. But not Sam. He bases his decisions on so-called “expected value” — the probability of the reward multiplied by the amount of the reward. 100% of $1M is $1M while 10% of $15M is $1.5M. So Sam would choose the latter. It’s a rational way to invest, especially in boom times. It is what made his fortune. And probably what caused it to disappear.
One of the more interesting debates in my field is whether philanthropy ought to be utilitarian. Do values, intentions, and principles matter, or does it simply matter what you accomplish — no matter how you accomplish it? On one side of the debate are Sam Bankman-Fried and the consequentialists, who argue that only results matter. On the other side of the debate is Tom Wein, who is admirably obsessed with ethical approaches to development, which leads him to focus on the squishy metric of “dignity” instead of more typical development measurements like life expectancy, income, and crop yields. At the extremes, the effective altruists want to blow up asteroids while the “dignity” folks want everyone to be nicer to one another, even if an asteroid is fast-approaching.
For me, this episode reinforces the value of pluralism and not becoming overly seduced by any one philosophy or ideology. Rules matter. Principles matter. Results matter. We ought to embrace them all, even when they are in tension. Especially when they are in tension.
One final thought: the reaction to FTX’s bankruptcy has largely been “we thought we could trust Sam Bankman-Fried and never guessed he would turn out to be a fraud and liar.” But if you re-listen to interviews from earlier this year, as Jacob Goldstein did this week, losing everything with the hope of trying to do as much good as possible doesn’t seem like such an unexpected outcome from Sam. Perhaps the greatest irony of all is that the very people trying to convince us to spend billions on long-term existential risk never considered the very real risk that their patron would go bankrupt by making risky investments.
For a smart look at “How the Crypto Craze Corrupted Politics,” especially for the Democratic party, head over to
by my friend Micah.🎨 When not selling out mattered more than making it
I’m 42 years old. I work in an office, wear khakis, and invest in stocks. If I could go back in time and tell 22-year-old me that this was how it would turn out, I can only imagine his disbelief and disappointment. 22-year-old me wanted nothing to do with 42-year-old me.
On my flight home from Kenya, I scrolled through dozens of movies and settled on Reality Bites, which I hadn’t seen since I was in high school in the mid-90s. I remember relating so much to Ethan Hawke’s character. I, too, was far more concerned with “not selling out” than “making it.” Authenticity meant everything and commercial success was for losers.
Of course, the film also pokes fun at the narcissism and avoidance that usually go along with obsessing over authenticity.
How Reality Bites came to be made against all odds is a fascinating story, as told by Soraya Roberts in The Atlantic. Apparently, a TV series adaptation is in the works for Peacock, which is fine, but I’d much rather watch a genuine, unconventional piece of independent cinema portraying Gen Z rather than yet another nostalgia-infused adaptation. Any recs?
Damn, I miss the 90s. My friend Mario and I were discussing what a special decade it was this morning — on the cusp of the Internet and globalization, but without the surveillance, information overload, and constant social comparison. If I could give any gift to young people today it would be that they could live through the 90s in all its glory.
🎧 Speaking of nostalgia
I failed to link to the latest episode of the Twelve Inquiries podcast with Luis. In the most recent edition, we spoke with technology critic Sara M Watson and Grafton Tanner, author of The Hours Have Lost Their Clock: The Politics of Nostalgia. It was a fun, thought-provoking conversation that we edited down to a snappy 20 minutes. Next in the queue is a highly personal episode about our experiences with therapy. 😬 I’m happy with how it came out thanks to Luis’ excellent editing, but I know I’ll also suffer a bit of a vulnerability hangover once it goes up on the feed.
🇺🇳 Love an immigrant
Last week in Nairobi, I met Arnav Kapur of the excellent Development Dilemma podcast, which should be required listening for anyone working in global development or philanthropy. And for those who have lived in another country, I especially recommend this episode with Conor Walsh and Alexandria Syagga Njenga about “Whats going wrong with Kenyan-Expat relationships: social, romantic and more.”
Both Conor and Alexandria were forceful in their insistence that immigrants living in Kenya need to make more of an effort to learn the local culture and customs. I agree. But I was also happy to hear some gentle push-back from a member of the audience, urging her fellow Kenyans to offer grace and show curiosity about the cultures and perspectives of immigrants. I wish more Americans would show that kind of curiosity to my wife and other immigrants living in the U.S. And I hope that I am given the same grace when we move to another country.
Have a wonderful Thanksgiving. And truly, thanks, as always, for reading and sharing your reactions.
David
Your comment about the 90’s is something I’ve been repeatedly telling my students that this is the one thing that i wished they could experience.