Recognition
We've heard the phrase "pattern recognition" thrice in 2019.
It came from three investors. Worse, they appeared to offer diversified perspective as a banker, a VC and a PE-guy. 50-80% of the feedback overlapped. The justification, on the other hand, was identical.
We're livid, but we don't know why. It feels wrong. Perhaps because we deny the premise: we heard something three times, so it must be true. We don't believe it - in fact, we categorically reject the feedback. So either we're wrong, they're idiots or the game is rigged.
Nope. They're simply giving (1) while we're seeking (2). Silly humans.
Our brains are wired to pick up patterns. Investors use these instincts and call it a process - pattern recognition is de ja vu as a thesis. That's a branded form of intellectual lethargy. Worse, it's reinforced by echo chambers of homophily and elite projection. The best version is abstracted as, "other investors will think..." Why are we stuck chasing superlatives, popularity contests and vanity metrics?
This thinking leads to monoculture, cubicles and societal collapse. If pattern recognition is your game, A.I. should have your job. Not now, of course, as Amy entertains herself toying with confused humans... don't under estimate her, be afraid. It might be preferable to learn a new trick rather than go extinct, or worse.
If we ignore the momentum traders, the hype-men, the tulip speculators, etc. - who's left? Well, we could play the odds and borrow from poker. The process to engineer alpha is literally the opposite of pattern recognition (converging to pure beta).
What if we borrowed from these folks to engineer swan hunters. What would they look like? Probably a diverse set of folks, assembled with near equal voices to make collaborative decisions. They'd be deep in only a few topics or issue areas. Perhaps their investment decisions would require first principle thinking from physics, economics and anthropology on up to market opportunity. They've made it work with tremendous results.
Small, diverse teams win. If you're pitching a manel, walk out. If folks utter these two words as justification for a bad call, thank them and walk out.
Send them a link to this post afterwards titled, "returning the favor."
It came from three investors. Worse, they appeared to offer diversified perspective as a banker, a VC and a PE-guy. 50-80% of the feedback overlapped. The justification, on the other hand, was identical.
We're livid, but we don't know why. It feels wrong. Perhaps because we deny the premise: we heard something three times, so it must be true. We don't believe it - in fact, we categorically reject the feedback. So either we're wrong, they're idiots or the game is rigged.
Nope. They're simply giving (1) while we're seeking (2). Silly humans.
Our brains are wired to pick up patterns. Investors use these instincts and call it a process - pattern recognition is de ja vu as a thesis. That's a branded form of intellectual lethargy. Worse, it's reinforced by echo chambers of homophily and elite projection. The best version is abstracted as, "other investors will think..." Why are we stuck chasing superlatives, popularity contests and vanity metrics?
This thinking leads to monoculture, cubicles and societal collapse. If pattern recognition is your game, A.I. should have your job. Not now, of course, as Amy entertains herself toying with confused humans... don't under estimate her, be afraid. It might be preferable to learn a new trick rather than go extinct, or worse.
If we ignore the momentum traders, the hype-men, the tulip speculators, etc. - who's left? Well, we could play the odds and borrow from poker. The process to engineer alpha is literally the opposite of pattern recognition (converging to pure beta).
What if we borrowed from these folks to engineer swan hunters. What would they look like? Probably a diverse set of folks, assembled with near equal voices to make collaborative decisions. They'd be deep in only a few topics or issue areas. Perhaps their investment decisions would require first principle thinking from physics, economics and anthropology on up to market opportunity. They've made it work with tremendous results.
Small, diverse teams win. If you're pitching a manel, walk out. If folks utter these two words as justification for a bad call, thank them and walk out.
Send them a link to this post afterwards titled, "returning the favor."
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